investingLive Americas FX news wrap 10 Nov: US stock surge on optimism of a shutdown deal

The expectations are that the votes are there to end the government shut down and that has the stocks sharply higher (see Adam’s post here). At the end of the day: the NASDAQ index. The best session since May 27 with a gain of 2.27%. The S&P index added 1.54% and the Dow industrial average increase by 0.81%.

Gold surged and rose to its best level since October 24. The price is trading up $115 or 2.88% have 4115.605. That’s the best one day gain since May 6. Silver also moved sharply higher with a gain of 4.48%. That was its best day since June 2. After trading as low as $98,240 last week, the price bitcoin is back up at $105,355. That is still well off the $126,272 level reached back on October 6.

The U.S. Treasury sold $50 billion of 3 year notes at a high yield 5.579%. That was 1 basis point less than the WI level at the time of the auction. There was strong demand by both international and domestic investors. Yields in the US moved higher with the two-year up 3 point basis points at 3.594%. The 10 year was up 2.9 basis points at 4.121%. Tomorrow the US debt market will be closed in observance of Veterans Day. The US stock market, however, will be open.

Trump said that a deal with India was in the works and Switzerland said that tariffs may be reduced from 39% to 15% soon. Trump may be a little concerned about some of the excess tariffs with the key Supreme Court decision looming. He lamented that the cost including reimbursement tariffs and investments would be greater than $2 trillion and that would be detrimental to the US economy.

Fed speak today included San Francisco Fed Pres. Mary Daly, Fed Gov. Stephen Myron, and Fed’s Musalem.

San Francisco Fed President Mary Daly said policy is currently “in a good place,” noting that recent rate cuts have helped support the labor market while maintaining downward pressure on inflation. She emphasized that inflation remains contained in goods, and there are no signs of rising pressures in services, housing, or expectations. Daly also pointed to slower wage growth as evidence of a negative demand shock in the labor market and cautioned against keeping rates too high for too long. She added that asset valuations reflect optimism about productivity, potentially tied to AI developments, whether those gains prove transformative or not. Overall, somewhat dovish comments from Daly.

Fed Governor Miran also spoke and the Trump nominee (dove – he voted for 50 bp cut at the llast meeting) argued that inflation data is outdated and trending lower, suggesting the Fed should adopt a more dovish stance than it held in September. He noted that employment data shows some softness, and that policy should be forward-looking rather than based on backward-looking inflation metrics. Miran believes that financial conditions remain tight, particularly in housing, and that while tariff-related inflation could emerge, it would be a one-off event, not demand-driven. He expects some growth early next year and sees it as imperative for the Fed to ease policy, advocating for at least a 25 bp cut, though he views 50 bp as more appropriate. Miran also stressed that the Fed’s role is not to address inequality, and acknowledged that the unemployment rate is drifting higher as the labor market softens. He concluded by noting that the FOMC remains divided, and the Chair’s role is to reflect that diversity of opinion.

Fed’s Musalem said that economic uncertainty has plateaued, indicating a more stable outlook after recent volatility. He noted that the labor market has cooled in an orderly fashion, with conditions softening slightly but remaining broadly healthy. Consumer balance sheets are in good shape, and while some layoffs have been announced, unemployment insurance claims have stayed steady, suggesting that the job market remains resilient despite modest signs of slowing

This article was written by Greg Michalowski at investinglive.com.