US dollar rallies to 11-month high

As long as there are no unforeseen economic or global calamities in the next 30 days, Donald Trump’s surprise victory in the presidential campaign is unlikely to sway the Federal Reserve from a December rate hike.

According to Markus Allenspach, head of fixed-income research at Swiss private bank Julius Baer, Mr. Trump’s concessions to the Republican Party’s establishment – like the selection of Republican National Committee Chairman Reince Priebus a s his chief of staff – and stimulatory policies by central banks in Europe and Japan are likely to limit how low bonds can go.

Reflecting a substantial increase in fuel prices, the Labor Department released a report on Tuesday showing a slightly bigger than expected increase in US import prices in the month of October.

He said with unemployment at 4.9 percent in October, the labor market is close to full employment.

Meanwhile, eurozone construction output fell 0.9% month-on-month in September, reversing a 0.1% rise in August, which was revised from a 0.9% drop reported earlier.

Tokyo’s Nikkei ended up 1.7 percent, with exporters rallying on the back of the weakened yen.

NY manufacturing activity has stabilized in the month of November, the Federal Reserve Bank of NY revealed in a report on Tuesday.

The president-elect’s idea to spend more to upgrade roads, bridges and airports, though, in general mirrors Yellen’s frequent point that Congress should act to supplement what the Fed has done through low rates to encourage spending and spur growth. Import and Export Prices are also on today’s calendar, as is Business Inventories. Germany’s DAX shed 0.1 percent. The trade surplus increased to a seasonally adjusted Euro 24.9 billion from Euro 23.4 billion in August. Quarterly growth was forecast to ease slightly to 0.3 percent.

The jump in the US dollar and government bond yields since last week’s election remained within the range of the a year ago, he said, and rising in inflation expectations had eased some of the Fed’s concerns about overly low inflation.

A gauge of expectations for USA consumer prices this week climbed to the highest level since April 2015.

The British pound has recovered to multi-week highs against the greenback – largely in part because of expectations of a strong trade relationship with a Trump-led government. Economists expect the Fed’s October report to show a modest 0.2% increase.

However, Hong Kong sank 1.4 percent, extending a heavy loss on Friday, while Seoul and Sydney each shed 0.5 percent and Singapore fell 0.9 percent. The stock gave up $1.85, or 5.9 percent, to $29.72. The two assets tend to have an inverse price relationship. Boston Fed President Eric Rosengren, a historically dovish policymaker who surprised some in September when he joined the minority in advocating a rate rise, said the U.S. economy should hit its inflation goal next year and could well go too far in driving unemployment lower.