Which macro data boosted sentiment?

TLDR

Macro sentiment improved on rising odds of a December Fed rate cut, supported by softer US data and easing inflation expectations per recent reports on rate?cut hopes.

1. Retail sales and producer inflation came in soft (retail +0.2%, PPI +0.3% MoM, +2.7% YoY), reinforcing disinflation. See the market update.
2. Consumer inflation expectations eased (year?ahead to 4.5%, long?term to 3.4%) in the University of Michigan survey per coverage.
3. Fed signals helped. New York Feds John Williams said cuts could be near term, lifting cut odds per the report.

Deep Dive

1. Rate Cut Odds

The biggest sentiment boost came from rising market-implied odds of a December Fed cut. Reports cited a move toward roughly 60% probability after dovish commentary from Fed officials, including John Williams, who said cuts could be near term per the morning note.

• Growing rate?cut expectations tend to lift risk assets by lowering discount rates and easing financial conditions. This tone shift was captured across equities and crypto headlines as markets reassessed policy risk per the same note.

2. Cooling Inflation And Demand

Fresh US prints were modestly soft, reinforcing a disinflation narrative. Retail sales rose 0.2% versus 0.4% expected, while PPI increased 0.3% month?over?month and 2.7% year?over?year, per the market update.

• Softer demand and easing producer prices reduce pressure on the Fed to stay restrictive, aligning with rising cut expectations noted above in the update.

3. Inflation Expectations Eased

Consumer inflation expectations fell in the November University of Michigan survey. Year?ahead expectations ticked down to 4.5%, and long?term dropped to 3.4%, per the survey coverage.

• Expectations are a key policy input. Lower readings improve the odds that inflation continues to cool, supporting the case for easing per the coverage.

Conclusion

Sentiment strengthened because evidence across Fed signals, softer activity, and easing inflation expectations all point to an earlier policy pivot. If upcoming prints stay benign and officials maintain a dovish tone, the supportive backdrop for risk assets could persist. Monitor incoming data and Fed commentary for confirmation and any reversal signals.