Dollar and Bond Yields Mixed Equities Mostly Gain – Currency Thoughts
Dollar and Bond Yields Mixed Equities Mostly Gain
November 12, 2025
The U.S. stock market weathered the record long federal shutdown with surprising resilience and is now rising as the shutdown’s end approaches. The House of Representatives is expected to approve the funding extension today, after which the bill will go to the president to be signed. In pre-open futures trading, the SPX, DOW, Nasdaq and Russell 2000 show slight further gains after yesterday’s sharp rally. In the Asian Pacific, stock markets rose 1.1% in South Korea, 0.7% in India, 0.6% in Taiwan and Singapore, 0.5% in New Zealand, and 0.4% in Japan. Even biggest advances today have so far occurred in Germany, France, Italy and Spain.
Whereas the 10-year U.S. Treasury yield has declined four basis points following yesterday’s bank closure, comparable 10-year sovereign debt yields have risen three basis points in the U.K. and a basis point each in Germany, Italy and Spain.
The dollar in overnight trading climbed 0.7% against the South Korean won and 0.4% versus the yen and sterling, it also has dipped by 0.2% relative to the Swiss franc and 09.1% vis-a-vis the peso and both the Aussie and New Zealand currencies.
Whereas Bitcoin and gold prices have risen 1.9% and 0.6%, West Texas Intermediate oil is down by 1.1%.
India reported a record low consumer price inflation rate of just 0.25% in October, half as much as analysts had been expecting and down from 1.44% in September, 6.2% at end-2024 and a peak of 7.8% in April of 2022. The latest reading is far below the Reserve Bank of India’s medium-term target.
The preliminary measure of German CPI inflation last month (a price rise of 0.3% from September and 12-month increase of 2.3%) has been confirmed unrevised. The food price component slowed to a 9-month low of 1.3% from 2.1% in September and 2.5% in August, but service sector consumer prices ticked up 0.1 percentage point to 3.5%. CPI inflation got as low as 1.6% in September 2024 after previously cresting at 8.8% in October and November of 2022. A 0.3% monthly rise of German wholesale prices last month was also reported today, resulting in a 2-month low 1.1% year-on-year increase.
Portugal’s second estimate of October consumer prices (unchanged from September and up 2.3% from October 2024) also matched the earlier, less complete measure for last month. Portuguese inflation was down from 2.4% in the prior month, representing its lowest reading since May and well below the late 2022 peak of 10.1%.
Serbian CPI inflation receded further last month to a 54-month low of 2.8% compared to a prior cyclical peak of 16.2% in March 2023.
Romanian consumer prices got yanked sharply this past summer by higher VAT taxes. A year-on-year increase of 9.8% in October followed a 27-month high 9.9% reading in September and was the third straight reading just south of double-digit territory. Under these circumstances, a decision today to leave the central bank interest rate unchanged after the National Bank of Romania’s monetary policy review came as no surprise. The rate has been at 6.5% since a pair of small cuts in July and August of last year and before that had been at 7.0% since a hike in January 2023. Officials at NBR agree that the current policy stance is an appropriate one in order to preserve medium-term price stability while also promoting financial stability.
Federal Reserve watchers continue to attach about a one in three chance to there being another interest rate cut of 25 basis points at December’s last scheduled review of 2025. U.S. government-compiled data continues to be MIA, but most recent signals from private sources such as the ADP’s estimate of an 11.2k drop last month in private sector workers is consistent with the view that the Fed’s employment mandate is in danger of deviating further from target than the inflation mandate. Likewise, mortgage approvals last week only reversed a third of their drop during the final week of October.
Other data highlights today include
- Italian industrial production rose 2.8% in September (most in 37 months) and was 1.5% greater than a year earlier (most in 32 months).
- Turkey posted a smaller $1.11 billion current account surplus in September than in either August or September 2024. The deficit of $14.9 billion accrued over the first three quarters of this year was 2.9 times wider than a year earlier.
- Machine tool orders in Japan were 16.8% higher than a year earlier in October, a much bigger jump than forecast.
- Germany’s current account surplus in September of EUR 18.6 billion was almost twice as large as in the prior month but still 14% narrower than in September 2024. Relative to GDP, the German CA surplus in 2024 had reached almost 6%, but tariffs and the ongoing war between Ukraine and Russia have fostered a more difficult environment this year.
Copyright 2025, Larry Greenberg. All rights reserved.
Tags: German CPI and WPI, Indian consumer prices, National Bank of Romania
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