5 Things You Need to Know to Start Your Day: Americas

Good morning. Debate resumes on the size of the Fed cut, gold and the yen bounce and Boeing workers are on strike. Here’s what’s moving mark [View in browser]( [Bloomberg]( Good morning. Debate resumes on the size of the Fed cut, gold and the yen bounce and Boeing workers are on strike. Here’s what’s moving markets. — [Sam Unsted]( Want to receive this newsletter in Spanish? [Sign up to get the Five Things: Spanish Edition newsletter](. Fed debate [Treasuries are higher and the dollar is weakening]( as investors continue to [debate what size of interest-rate cut]( the Federal Reserve is likely to deliver next week. Another batch of mixed data on Thursday kept the guessing going, with US producer prices picking up slightly and applications for unemployment benefits also ticking higher. US stock futures are little changed, with the S&P 500 already up 3.5% this week. Glittering gold The impact on the dollar from the expectations of a Fed rate cut have continued to rattle through gold markets, with the [precious metal hitting another record high](. It’s rallied by about 25% so far this year, supported by the Fed rate-cut bets, central bank buying and renewed interest from retail investors. Read more from Ven Ram on gold and, more pertinently, silver below. Yen surge The [resurgence in bets on a 50 basis-point cut by the Fed]( also sparked a rally for the yen, making it the best-performing currency against the dollar this quarter. Some hedge funds are [adding to bullish wagers on the Japanese currency too]( placing long bets against the Australian dollar, Swiss franc and offshore Chinese yuan. [Just over half the economists surveyed by Bloomberg]( think the next hike from the Bank of Japan will come in December, with no change when it meets next week. Boeing strike Boeing shares are sinking in premarket trading after factory workers for the airplane maker [downed tools for the first time since 2008]( crippling manufacturing at its commercial jet hub. Members of its largest union rejected a contract offer from the company and voted overwhelmingly to strike. The move adds to the pressure on Boeing, already reeling from the fallout over quality issues which have sparked investigations and an executive shake-up. Software fortunes Adobe shares are sliding after the [absence of any AI-related uplift]( to sales in its outlook, which failed to quell investor impatience. On the flipside, Oracle shares are bouncing after a [bullish longer-term sales forecast]( underpinned by the expansion of its cloud business. Meanwhile, the economic data and corporate earnings agenda is fairly light today. What We’ve Been Reading This is what’s caught our eye over the past 24 hours. - The [ugly truth about payment deals]( for college football players. - New OpenAI model has [reasoning capabilities](. - Elon Musk [calls Australian officials “fascists”]( over social media laws. - China raises its retirement age for the [first time since 1978](. - What we know about how [Covid impacts your brain](. And finally, here's what Ven’s interested in this morning Never mind all the excitement over another record for gold, it's silver that will be the bigger winner if the Federal Reserve delivers the policy easing in 2025 that markets are pricing. A previous scenario analysis by Bloomberg outlined why gold should trade above $3,000 an ounce (from around $2,570 today) if we get more than 200 basis points of interest rate cuts, which futures markets are pricing to occur by May next year. Correlation analysis between the two precious metals suggests that would equate to a move above $37 an ounce for silver -- a cool 23% return on spot prices -- and the ratio of gold to silver would decline to 81 from 85 now. The trade is starting to gain traction as silver-backed ETFs are higher year-to-date, unlike those for gold. However, speculative positioning is nowhere near the scale that was seen in 2016 and 2017, according to CFTC data — suggesting that there's scope for plenty of further buying. Ven Ram is a cross-asset strategist for Bloomberg’s Markets Live. [Bloomberg Markets Wrap: The latest on what's moving global markets. Tap to read.]( Follow Us Stay updated by saving our new email address Our email address is changing, which means you’ll be receiving this newsletter from noreply@news.bloomberg.com. 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