Treasury Yields Mixed as Inflation-Driven Spike Recedes — Market Talk

1544 ET - Treasury yields fall from inflation-induced highs as the steep bond selloff of past weeks seems to fade away. September CPI accelerates more than expected, supporting the prospect of high interest rates for the time being. Markets still price in a Fed hold this month, but odds of a hike rise on the inflation report. The Producer Price Index tomorrow is also expected to accelerate, according to a WSJ consensus. September retail sales growth is forecast to slow and weekly jobless claims to remain rangebound. The 10-year yield slips 0.027 percentage point to 5.189%, its lowest level in nearly three weeks. The two-year is slightly up, at 4.800%. ([email protected]; @ptrevisani)1514 ET - Lean hog futures settled trading down 2.9% at 66.075 cents a pound. That brings the continuous contract to near its lowest close since early January 2024, according to data from FactSet. Pressure stemming from a hot CPI print this morning spanned commodities, including livestock. A higher USD index makes U.S. exports less attractive to buyers, while the expectation of higher interest rates to combat inflation experienced a resurgence. The conviction of markets that a rate hike is imminent faded as the day progressed, with the CME's FedWatch now showing a 66% chance of interest rates staying unchanged after the Oct. 28 Fed meeting. Live cattle settled down 0.5% to $2.2515 a pound. ([email protected])1510 ET - Bitcoin's more recent buyers are the ones capping its price lately, according to an analysis from Glassnode. Buyers from the past two years still have a cost basis that's higher than $88,000, and they've turned the price back twice this year, the analysts say. Longer-term holders, meanwhile, have largely stopped selling at a loss. Holders that are already in the black are selling more than those who are in the red, as has been seen in past recoveries, they say. Until Bitcoin is able to close above $88,000, each push higher is going to encounter those recent buyers who can finally sell near their break-even, the analysts say. ([email protected])1459 ET - Canadians continue to spend through elevated energy prices but momentum is cooling, cardholder tracking by Royal Bank of Canada indicates. The bank's estimate of core retail sales, excluding gas and autos, rose 0.4% in September on a three-month average. That is slower than the 0.6% advance in August. Cardholder spending shows discretionary services once again led, with gains across a range of categories, and purchases on essentials also remains positive if gas is stripped out. But spending on discretionary goods was roughly flat on a three-month average despite growth in September and continued outlays on clothing, economist Abbey Xu says. Expected improvements in household incomes and the labor market should provide support, yet high energy costs continue to weigh, Xu says.([email protected]; @RobbMStewart)1407 ET - Gold and silver futures settle lower after U.S. consumer price inflation for September landed above estimates, increasing market expectations for a Fed interest-rate rise this month and pushing the U.S. dollar higher. Continuing attacks in the Persian Gulf add pressure by lifting oil prices, "sustaining the risk that energy-led inflation complicates the Fed's path," Kaynat Chainwala of Kotak Neo says in a note. Front month gold settles down 1.6% in New York at $4,084.80 a troy ounce. Silver falls 6.1% to $55.55 a troy ounce, its lowest close in almost 11 months. ([email protected])1404 ET - Economic uncertainty is prompting many Americans to pull back on planned Halloween spending, according to LendingTree's 2026 Halloween spending survey. The survey shows 80% of respondents plan on making Halloween-related purchases, down from 90% in 2025. Spending is also expected to decline, dropping 16% from 2025 to an average of $162, the survey revealed. The survey also shows 38% expect to spend more than last year, while the 61% skipping purchases due to economic uncertainty are cutting back on candy, decorations, and costumes. ([email protected])1258 ET - Several of the world's advanced economies are expected to see borrowing costs rise over the next five years, even as they deal with already elevated debt, a post on the IMF blog said. "Rising Sovereign Yields Raise Financial Stakes" points out that the Group of Seven's average 10-year government bond yield rose by over 1 percentage point between February and September, to touch its highest level in over two decades. The post also said the effective average interest cost of government financing is seen rising from 2.3% in 2021 to 3.7% in 2031. The U.S., for example, is expected to see interest payments rise to 5.7% in 2031, after paying 2.8% prior to the pandemic, the post said. ([email protected])1251 ET - The national entry point to luxury housing edged down to $1,199,321 in September, Realtor.com says. That's 3.6% below a year ago and the 30th consecutive month of annual price declines. Every luxury tier is cheaper than a year ago, with the threshold for the top 5% of listings down 3.5% and the top 1% down 5.3%. Even so, luxury homes are selling faster than they were last September. Listings at the 90th percentile spent a median of 76 days on the market, three days fewer than a year ago. The luxury entry point is the lowest since January 2023, and 14.1% below its May 2023 peak of roughly $1.4 million. There are no clear signs yet of a reversal, Realtor.com says. ([email protected])1250 ET - Cryptocurrency analysts have largely shifted their views on cryptocurrency to a positive view on price movement. "Analysts have flipped from bear to bull across the five majors since July," says analysts with CryptoQuant in a research note. According to the firm, 89% of analysts surveyed on July 1 and today are now positive on bitcoin. The firm says that on ethereum, 88% of analysts are positive, while for solana 91% of analysts are positive. "The turn is deeper and faster, on a smaller price move," says CryptoQuant. Major cryptocurrencies are lower following a hotter-than-expected CPI report - with bitcoin down 2.1%, ethereum down 3.3%, XRP off 3.1% and solana down 2.8%. ([email protected])1224 ET - Bitcoin and gold are two sides of the same coin, according to Steve Neamtz of Yorkville America in a note. He says bitcoin as 'digital gold" simply doesn't have the benefit of time in the market to determine how it may behave in the course of financial stress, whereas gold has had thousands of years to "demonstrate its value as a reserve asset." But both will work for investors attempting to hedge against currency debasement. "None of this requires picking a side," he says. "Central banks are buying gold on infrastructure that already exists; institutions are buying bitcoin on infrastructure still being built--the same debasement logic, two different stages." Bitcoin falls 1.9%, while gold is off 1.6%. ([email protected])1100 ET - Dubai's residential property market faces pressure from an expected increase in housing supply over the next two years, S&P Global Ratings says. The emirate's housing stock could expand by around 20% through 2028, while Abu Dhabi could add approximately 13%, assuming construction projects proceed without delays, the ratings firm says, citing JLL estimates. The additional supply could constrain a recovery in property prices and rents. S&P also maintains negative rating outlooks on PNC Investments, associated with Sobha, and Omniyat Holding, citing their Dubai exposure and uncertainty surrounding the residential market. ([email protected])1044 ET - One of the only good features of the current run of elevated inflation is the cost-of-living adjustment for Social Security beneficiaries, Harris Financial Group's Jamie Cox says. The Social Security Administration just said benefits are set to rise by 3.6% in 2027, the biggest upward adjustment since 2023. Gasoline and energy prices are the proximate and temporary causes of the current run-up in inflation, so Social Security recipients could end up with a real, meaningful increase in benefits when the energy supply shock finally winds down, Cox says. ([email protected])