News that all major categories of US CPI decreased in October was greeted warmly by markets, as expectations grew that the Federal Reserve would not have to raise interest rates again.
The price of US treasury bonds jumped, pushing the yield on those bonds down to 4.4% from 4.6%. Sovereign bond yields move in inverse correlation to their price, this move therefore indicating increased confidence in the American economy.
Yesterday was also a good day for Wall Street, where major indexes rallied off the back of developments, and news of another averted government shutdown is sure to put a spring in many steps.
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USD/GBP: the past year
