RockCreek Daily Market Update


Equity Markets:
Global equities were weaker in aggregate, bookended by Australia and Brazil. ASX fell -1.7% on weakness in energy and materials, while Bovespa rose 1.2% as Petrobras gained 3.6% and banks were broadly stronger. In the U.S., markets seesawed with S&P seeing a -2.2% intraday decline from the highs at the open. Financials -1.4% and technology -1.3% weighed on the index, while momentum and volatility were sold. Shares of PG&E, California’s largest utility, tumbled -22% as the company warned of “significant liability” if it’s equipment is found to have started the California wildfires.

Bond Markets:
The Treasury curve steepened as the front-end strengthened on a soft CPI release. Moves were muted though as Fed Chair Powell is scheduled to speak this evening. Gilts yields dipped -1bp to 1.51% despite May’s cabinet approving a Brexit deal, although hurdles in the parliament remain.

Currency Markets:
The U.S. dollar index declined -0.3% on muted inflation data. British pound finished up 0.1%, retracing a -0.7% loss on news that May’s cabinet approved a Brexit deal. The strongest gains were seen in emerging markets with the JPMorgan EM FX Index up 0.5%. Russian ruble gained 1.4% as markets discount the likelihood of the U.S. passing more sanctions before yearend.

Commodity Markets:
The Bloomberg Commodity Index jumped 2.8%, driven almost entirely by the 18% jump in natural gas prices. Natural gas prices have surged this month on concerns over stockpiles paired with cold revisions to weather forecasts. WTI broke a 12-day losing streak, gaining a modest 1.0% to $56.25 per barrel.


U.S. consumer prices increased by 0.3% in October bringing the 12-month change to 2.5%, which was consistent with expectations. The core CPI increased 0.2% m/m and 2.1% y/y. While the price of gasoline contributed meaningfully to the rise in the headline number (energy sub-component rose 2.4% m/m), it should serve have a dampening effect going forward given the drop in oil prices (gasoline futures have dropped 25%). Further, continued U.S. dollar strength and modest growth in wages should put a ceiling on inflation in the near- to medium-term. 

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The information contained herein has been prepared solely for informational purposes and is not an offer to buy or sell or a solicitation of any offer to buy or sell any security or to participate in any strategy. Nothing contained herein shall be relied upon as a promise or representation as to the past or future performance.   This material represents the views of RockCreek.  This information should not be construed as investment advice. Some of the information may be provided to discuss general market activity, industry or sector trends, or other broad-based economic, market, or political conditions.  Information and opinions are as of the date of this material only and are subject to change without notice.  RockCreek has no obligation to provide any updates or changes to such information. The opinions, forecasts, assumptions, estimates, and commentary contained in this material are based on information provided to RockCreek on both a formal and informal basis.  Further, any such opinions, forecasts, assumptions, estimates, and commentary are made only as of the date of this material, are subject to change at any time without prior notice and cannot be guaranteed as accurate.


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