My macro view today is that financial conditions remain tight. Markets have room to recover, but a sustained recovery will require support from inflation and interest rates.
Last night, the U.S. market saw a combination worth watching:
Brent crude rose 1.8% to close at $106.65; the Dow gained 0.4%, while the Nasdaq fell 0.4%. Energy stocks rose, while tech stocks came under pressure, and the market continued to diverge.
The dollar also remained strong. At the time of Reuters' report, the dollar index had risen to 102.59, near an 18-month high. Middle East risks and inflation concerns continued to weigh on markets.
My understanding is that rising oil prices may increase household spending and business costs; a stronger dollar may also put pressure on global risk assets. Even if prices rebound, these two constraints still warrant close attention.
On rates, the first step is to get the dates straight.
The U.S. bond market was closed on October 12 for Columbus Day. The 10-year Treasury yield was 5.24%, the level from last Friday—not a new move overnight. The market will only provide fresh confirmation once bond trading resumes tonight.
The Fed’s stance has not clearly turned more dovish either. On Monday, Hammack stressed that inflationary pressures are broad-based and said she supports timely restrictive policy. This is her personal policy view, but it reminds us to take price pressures beyond energy seriously as well.
The most important test this week is September’s CPI report tomorrow evening.
Release time: October 14 at 20:30 Beijing time. PPI will follow on October 15 at 20:30.
Monthly core CPI is currently expected to come in at 0.2%, versus 0.3% previously. That is the forecast; the result has not yet been released.
Two things need to be watched together: whether energy pushes up headline prices, and whether core inflation—excluding food and energy—cools.
If monthly core inflation falls to 0.2% or lower, and the dollar and Treasury yields also retreat, I’ll give more weight to the view that risk assets can continue to recover.
If the figure is still 0.3% or higher, and the dollar and rates rise, I’ll put more weight on a defensive stance.
If the data is mild but the dollar and rates don’t fall, that suggests the market is still worried about other pressures. Don’t judge the market based on a single number.
Here’s how this translates to assets:
In crypto, BTC remains an important anchor for CORE6. When BTC’s structure strengthens, I’ll pay closer attention to recoveries in other coins and then assess their relative strength. Ongoing macro pressure doesn’t mean every rally should be shorted.
For gold, safe-haven demand may provide support, while a strong dollar and high real interest rates may weigh on it. The key is to see which force prevails.
For technology and semiconductors, easing rate pressure can support a valuation recovery. Whether it lasts will also depend on earnings reports, profitability, and sector demand.
Today, first watch the direction of rates after bond trading resumes; tomorrow evening, watch how the CPI, the dollar, and Treasuries react together.
For intraday opportunities, follow confirmed price-action structures; for trend calls, wait for more evidence of persistence.
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