The dollar suffered its most spectacular fall against the euro in the space of a few hours: the single currency jumped +1.7% to 1.0875.

The Dollar Index, meanwhile, fell -1.4% to 104.15, returning to its lowest levels since September 1.

The Dollar is suffering from a spectacular fall in yields, with yields in free fall: the US '2-yr' is down 20pts at 4.841%, the '10-yr' is down 18pts at 4.455%, and the '30-yr' is down 12pts at 4.628%.

The publication of the latest inflation figures in the USA has totally dispelled fears of a tightening of US monetary policy in December, but also by May 2024.

The US consumer price index rose by 3.2% in October compared with the same month in 2022, compared with +3.7% in September.
The sequential variation is less spectacular, at -0.1% compared with September.
Excluding energy and food products, two traditionally volatile categories, the annual inflation rate stood at 4% last month, again slightly below consensus (4.1%).

However, the dollar's "gross" fall in yield is not the be-all and end-all, as it must be compared with that of the euro: the differential is not so spectacular, as OATs and Bunds are down 14 basis points and 13 basis points respectively at 3.1504% and 2.600%, while the Italian 10-year is down 16.5 basis points at 4.401%.
So, from a strictly mechanical point of view, it's a very close call.

The Pound also explodes upwards with +1.7% to $1.248, while British 10-year Gilts post -14Pts to 4.1800%... a spread very comparable to the US 10-year.

The Euro also benefited - and with a delay - from the publication of a rise in the ZEW economic sentiment index for Germany: it climbed 10.9 points in November to 9.8, returning to positive territory for the first time since April.

Increased economic expectations are accompanied by a much more optimistic outlook for the German industrial sector and for stock markets at home and abroad", stresses ZEW President Professor Achim Wambach.

He also points to the near-stability (+0.1 points) of the index assessing the economic situation in Germany, at -79.8 points, which in his view 'confirms the impression that Germany's economic development has bottomed out'.

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