Daily Financial Breakfast 11 November 2026: 0.3% Rise in US Core CPI; WTI Rebounds Above $85

Today's Market News: The Key Figures

• 0.3% was the October rise in U.S. core consumer prices. That marked a third consecutive month at this pace, above the 0.2% forecast, as Federal Reserve officials debated additional rate increases.
• Above $85 per barrel, WTI crude rebounded following two days of declines. Wednesday brought concerns over stalled progress in Middle East peace negotiations.
• A tailored policy instrument could be an option in a future crisis, ECB presidential candidate Klaas Knot told the Financial Times, declining to rule out such a measure.
• A December ECB rate increase was “rather obvious”, according to Bundesbank President Joachim Nagel.
• Underlying inflation could climb even as cheaper energy pulled headline inflation lower, ECB Chief Economist Philip Lane cautioned.
• A 2.7% decline took Australian consumer confidence to 78.2 as the Reserve Bank of Australia tightened monetary policy.

Markets: Moves in Focus

U.S. Treasuries: Yields Climb

A 19-basis-point surge in U.S. two-year Treasury yields on Tuesday was accompanied by a 14-basis-point rise in 10-year yields, which briefly exceeded 5%, according to Rabobank. For two-year yields, Deutsche Bank said it was the biggest one-day increase since 2025.

Foreign Exchange: Dollar Advances

Around 102.20 was the level for the U.S. Dollar Index in Wednesday's Asian session, following a gain of more than 0.5% on Tuesday. From around 158.90 in Asia, USD/JPY pushed further towards 160. USD/CAD hit 1.4230 as the Canadian dollar slipped to a four-week low. A second day of gains brought USD/CHF to around 0.8260 in early European trading. Tuesday saw AUD/USD lose 0.88% to trade below 0.6900, while GBP/USD slipped to just above 1.3300 and then stabilised near 1.3350. In early trading after Tuesday's inflation release, EUR/USD stood around 1.1190, a decline of 0.28%. The pair added to those losses on Wednesday.

Gold: Recovery After the Sell-off

Around $4,050 was gold's recovery level on Wednesday. The rebound followed Tuesday's 2.67% decline after the U.S. inflation data and remarks by Federal Reserve officials. Gold had approached $4,000 during Tuesday's North American session.

U.S. Equities and Futures: Nasdaq Rebounds

Just above 27,400 marked Tuesday's session low for the Nasdaq 100, which subsequently rebounded towards 27,750. By Wednesday's European trading hours, Nasdaq 100 futures were up 1.45% at around 28,230. S&P 500 futures climbed 0.60% to around 7,590, while Dow Jones futures added 0.16% to around 52,400.

U.S. Inflation & Federal Reserve Policy

0.3% Core CPI Rise Tops Forecast as Fed Officials Weigh More Tightening

0.3% was the month-on-month increase in October's U.S. core CPI. Against a 0.2% forecast, the reading marked a third consecutive monthly gain of 0.3% as consumer inflation surpassed expectations. Headline CPI increased 0.4%, above the anticipated 0.3% but below September's 0.6% rise.

Using a more precise monthly headline figure of 0.35%, Deutsche Bank cited a three-month annualised inflation pace of 5.72%. For core inflation, its strategists calculated the equivalent annualised rate at 3.75%, the quickest since April 2024. Rabobank pointed to faster grocery and food inflation alongside persistent shelter costs. It also highlighted the lagged impact of earlier energy shocks on medical care, household furnishings and other everyday expenses.

Before the inflation figures were released, Fed Governor Christopher Waller had advocated a December rate increase of at least 25 basis points, according to Commerzbank. A monthly core reading of 0.3% or above, he said, justified considering a 50-basis-point rise. At least two more 25-basis-point increases were needed, Dallas Fed President Lorie Logan argued. With policy 50 basis points short of a “modestly restrictive level”, she said faster action remained possible this winter.

In an interview with PBS Newshour, Chicago Fed President Austan Goolsbee called the CPI figures “borderline disturbing”. Services inflation that was failing to ease was his particular concern. He characterised the labour market as steady and stable, while cautioning that inflation could become entrenched in expectations. Persistent inflation pressures and apparently firmer labour-market conditions were highlighted by Fed Vice Chair for Supervision Michelle Bowman. Monetary policy remained “fairly accommodative”, according to Kansas City Fed President Jeffrey Schmid.

Further “gradual” rate increases had the backing of Philadelphia Fed President Anna Paulson, who argued that policy should be “somewhat restrictive”. Although she put underlying inflation in a range between 2.5% and 3%, she drew a distinction between current conditions and those that would demand a faster response. Rising inflation expectations, mounting wage pressures or an increase in underlying inflation would prompt her to favour quicker action. She added: “Right now, that's not what I'm seeing.”

From the existing federal funds target range of 3.75%-4.00%, futures markets moved towards fully pricing a 25-basis-point December increase. The tightening implied for December climbed from 21.0 basis points on Monday to 27.7 basis points at Tuesday's close, then to 28.5 basis points on Wednesday morning, Deutsche Bank said. At that point, pricing indicated a 14% chance of a 50-basis-point increase. BBH cited odds as high as 15%; a subsequent Wednesday reading showed an 11.5% probability. For the September 2027 meeting, Deutsche Bank also noted that the implied rate had risen by 22.3 basis points on Tuesday.

Energy Markets & Middle East Peace Efforts

Above $85: WTI Rebounds With Middle East Peace Talks Unresolved

Around $85.60 per barrel was the level for West Texas Intermediate crude in Wednesday's Asian trading. The recovery followed two days of losses that had taken prices to two-month lows.

Hopes for reduced tensions between the United States and Iran had shaped earlier trading. Later on Wednesday, however, concerns surfaced over the absence of progress towards a Middle East peace agreement. WTI remained above $85.

European Central Bank: Policy Outlook

ECB Crisis Tools: Knot Leaves New Tailored Instrument Open

A further, more tailored policy instrument remained a possibility in a future crisis “of a different nature”, Klaas Knot told the Financial Times. Knot is the Dutch candidate to succeed ECB President Christine Lagarde.

On potential crisis support, Knot said: “If circumstances require it, we will not hesitate to take action,” His comments did not amount to a specific proposal for a new instrument or an announced policy decision.

December ECB Rate Rise: Nagel Calls the Need “Rather Obvious”

In a Bloomberg TV interview, Bundesbank President Joachim Nagel endorsed a December ECB rate increase. Nagel, who also sits on the ECB Governing Council, said: “It is rather obvious that we have to increase in December,”

Lower Energy Prices: Lane Flags Risk of Rising Underlying Inflation

Cheaper energy does not necessarily signal weaker underlying price pressures, ECB Chief Economist Philip Lane cautioned. At the Bank of England and its Watchers Conference, he said “it would be a surprise if there are no second-round effects”.

Lane separated energy costs' direct impact from wider inflation trends. Were energy prices to edge down, he said, “headline inflation could fall while underlying inflation rises”.

Australia: Economic Indicators

2.7% Drop Takes Australian Consumer Confidence to 78.2

2.7% was the fall in Australian consumer confidence. The reading declined to 78.2 as the Reserve Bank of Australia tightened monetary policy.

Key Events Ahead

• December Policy Decision: Federal Reserve (9 December 2026): 9 December is the scheduled date for the U.S. Federal Open Market Committee's December interest-rate decision.