- Biden to float a windfall tax on energy producers but it will be tough to pass it
- Dallas Fed October manufacturing index -19.4 vs -17.2 prior
- August US monthly oil demand revised higher in another sign of elasticity
- Deutsche Bank argues the pound needs to fall to 1.08 by year end
- Germany's Scholz: We will implement the main framework on gas prices this week
- Now isn't the time for over-confidence in election polls
- This week's Fed meeting is critical and a pivot is likely sooner rather than later - MS
- Vitol's CEO - "absolutely" see significantly lower demand for oil products
Markets:
- Gold down $9 to $1632
- US 10-year yields down 8 bps to 4.09%
- WTI crude oil down $1.67 to $86.23
- S&P 500 down 28 points to 3872
- USD leads, GBP lags
Newsflow was light in US trade and the market started to feel some jitters ahead of the Fed. A big reason for that was a Timiraos article highlighting that the Fed might go higher and stay there for longer. Is this one a leak? Or is his dovish article 9 days earlier the leak? Place your bets.
In any case, the bet today was on dollar strength in sterling in particular struggled as reports of tax hikes begin to do the rounds and the market frets more about economic growth rather than fiscal sustainability. It's a tight-rope walk right now for Sunak.
The euro got no benefit from high inflation data today or on Friday and that highlights that the market is expecting a recession anyway and prefering to make bets on which region can weather it best.
Next up is the RBA decision with market pricing putting 25 bps at 75% and the remainder at 50 bps. The trend last week was for dovish surprises from the BOC and ECB. Some of that is already priced into the Aussie curve but officials will need to confirm it. AUD finished the day largely flat in a chop sideways just below 0.6400.
The calendar now turns to November as the year zips by. Happy Halloween.
