Bonds & Stocks
Investors are hedging against the Federal Reserve lowering borrowing costs next month even as the odds of another interest-rate cut have come down to a coin flip. Traders are looking to cash-in on the potential of a quarter-point rate cut by piling into December options linked to the Secured Overnight Financing Rate. The wave of wagers contrasts with current pricing in the interest-rate swaps market of about a 50-50 chance of a rate reduction at the Fed’s next meeting.
Economy
The US trade deficit shrank in August as a slew of global tariff rates from President Trump kicked in. The goods and services trade gap narrowed almost 24% from the prior month to $59.6 billion, the Commerce Department said. The value of US imports decreased 5.1% in August, the most in four months, while exports edged up. The slump in imports was led by a sharp drop in inbound shipments of nonmonetary gold, due to a massive increase in tariffs on Switzerland, a large exporter of gold.
World
The US formally warned South Africa against pushing for a joint statement at this weekend’s Group of 20 summit in Johannesburg that the Trump administration is boycotting. The US openly opposes South Africa’s G-20 presidency and its core agenda of solidarity, equality and sustainability — part of Ramaphosa’s push for a more inclusive world order. In the diplomatic communication delivered on Nov. 15, the US said it would neither participate in preparatory talks before the summit, nor the gathering of world leaders this weekend. It will block any outcome framed as a consensus G-20 position because South Africa’s priorities “run counter to US policy views,” according to a copy of the document.