Last week’s trading highlight was once again the strong pace of the S&P 500 equities index, hitting 6,044 points, its all-time high levels, with a positive weekly gain of +1.06%. The rally produced the index’s strongest month of the year.

Treasury bonds yields had the biggest weekly retracement this year, with the 10Y bond 23bps lower, closing at 4.17%. Meanwhile, credit spreads followed the better tone and closed 2bps to 5bps tighter on the week. The dollar index (DXY) had its first week of depreciation since early October, down 1.69%.

The driver for this performance was the economic data in the US coming in line with market expectations, with third quarter GDP at 2.8%, showing resilience of consumer spending, while jobless claims posted the lowest levels since April of this year. The Fed’s favorite inflation gauge, the core PCE index, came also in line with expectations.

The economic data brought a relief to markets and increased the probability of a 25bps rate cut in December to 65%.

Among global events in focus this week, Fed Chair Jerome Powell participates in a moderated discussion on Wednesday. Most importantly, we have payroll data due Friday, offering an assessment of the US jobs market.

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Mauricio GarretHead of International Sales and Trading

With a career spanning almost 20 years on the trading desks of BTG Pactual, Morgan Stanley and C6 Bank, Mauricio holds a degree in Economics from PUC in Rio de Janeiro and holds Series 7 and Series 63 certificates.

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