US inflation data shows the US moving further away from the Fed’s 2% target as Trump prepares to re-enter the Oval Office: US inflation saw a slight increase in October to 2.6%, in line with expectations and 0.2 percentage points above the 2.4% recorded in September, according to the US Bureau of Labor Statistics. Core inflation, which excludes food and energy, remained steady at 3.3% but showed a third consecutive monthly increase of 0.3%, signaling persistent underlying price pressures. October’s data comes at a critical point for the US economy, as the Fed weighs its next move ahead of President-elect Donald Trump taking office early next year.

But traders don’t see the rise in inflation hampering the Fed’s road to monetary easing: Traders are pricing in an 80% chance of another rate cut when the Fed meets next to decide interest rates in mid-December, Bloomberg reports. During its last meeting earlier this month, the Federal Reserve cut rates by 25bps, after having kicked off its easing cycle in September with a half a percentage point cut.

Some are already warning that Trump’s policies could complicate the Fed’s fight against inflation: Trump’s reelection and his proposed policies — tariffs, tax cuts, and mass deportations — could potentially push inflation higher. Economists are concerned that such measures could fuel price pressures while adding uncertainty, making the Fed’s task of achieving a “soft landing” even tougher. (Financial Times | BBC | New York Times | Guardian)

Market reax: Two-year Treasury yields, which are more sensitive to Fed decisions, fell as much as 10 bps after inflation data was released.

BTC HITS ANOTHER HIGH-

Another day, another BTC peak: BTC hit a fresh high of USD 93.2k yesterday before reversing some of its gains to sit at USD 88.9k at midnight, driven by inflation concerns and a strong post-election rally. (Reuters | Bloomberg | CNBC)

The cryptocurrency has been on a Trump-driven rally since Trump was reelected to the Oval Office on 5 November. We dove deeper into the rally in a Planet Finance published earlier this week.

MARKETS THIS MORNING-

Asian markets are starting mostly in the green during early trading this morning, with Japan’s Nikkei up 0.5%, followed by Korea's Kospi at 0.4% in the green, and Hong Kong’s Hang Seng at 0.1%. China’s Shanghai index is trading in the red at -0.1%.

EGX30

31,433

-0.5% (YTD: +26.3%)

USD (CBE)

Buy 49.25

Sell 49.39

USD (CIB)

Buy 49.24

Sell 49.34

Interest rates (CBE)

27.25% deposit

28.25% lending

Tadawul

11,930

-1.0% (YTD: -0.3%)

ADX

9,372

-0.5% (YTD: -2.2%)

DFM

4,733

+0.7% (YTD: +16.6%)

S&P 500

5,985

+0.02% (YTD: +25.5%)

FTSE 100

8,030

+0.1% (YTD: +3.8%)

Euro Stoxx 50

4,740

-0.1% (YTD: +4.8%)

Brent crude

USD 72.28

+0.5%

Natural gas (Nymex)

USD 2.98

-0.3%

Gold

USD 2,586.50

-0.8%

BTC

USD 88,897.70

+0.7% (YTD: +110.4%)

THE CLOSING BELL-

The EGX30 fell 0.5% at yesterday’s close on turnover of EGP 3.9 bn (8.2% below the 90-day average). International investors were the sole net buyers. The index is up 26.3% YTD.

In the green: Mopco (+2.1%), Alexandria Containers and Cargo Handling (+1.3%), and CIB (+0.6%).

In the red: Oriental Weavers (-2.6%), Heliopolis Housing (-2.4%), and Emaar Misr (-2.3%).

CORPORATE ACTIONS-

Eipico shareholders will vote on the company’s planned capital increase at an extraordinary general assembly on 14 December, according to an EGX disclosure (pdf). Eipico’s board voted last week to increase the company’s capital to EGP 6 bn from EGP 1.5 bn and its issued and paid-up capital by EGP 200 mn to around EGP 1.7 bn, distributed over 20 mn shares at a fair value of EGP 50 per share.

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