- Kremlin to annex four regions in Ukraine tomorrow and Putin will deliver a speech
- ECB's Lane: European economy seen stalling due to energy shock
- Mexican central bank hikes rates by 75 basis points, as expected
- Putin calls Nord Stream sabotage an 'act of international terrorism'
- Latest US sanctions on Iran target 10 entities including Chinese firms
- BOE's Pill: Hard to avoid conclusion that fiscal easing necessitates a response
- ECB policymakers see no need to activate emergency bond program for Italy - report
- Fed's Bullard: Jobless claims were 'super low'. It's imperative to avoid 70s inflation
- Fed's Bullard: We're determined to get to the right level on rates
- More from Bullard: I pay attention to market-based measure of inflation expectations
- Germany rolls out 200B energy subsidy plan
- US initial jobless claims 193K versus 215K estimate
- US Q2 2022 GDP (final reading) -0.6% vs -0.6% expected
- Canada July GDP +0.1% vs -0.1% expected
- Fed's Mester: We're not at the point where we should think about stopping rate hikes
- BOE's Ramsden: We are on alert for further signs of strain
- Fed's Mester: There are good reasons for what the BOE had to do
- Germany September preliminary CPI +10.0% vs +9.4% y/y expected
Markets:
- Gold up $1 to $1660
- WTI crude oil down $0.60 to $81.55
- US 10-year yields up 6 bps to 3.76%
- S&P 500 down 2.1% to 3640
- GBP leads, CAD lags
Tomorrow is the end of Q3 and it was a particularly-volatile quarter. That's why so few of the market moves today make sense. Copper was 1.8% higher and stocks 2% lower and that was just the tip of the iceberg when it comes to divergences today.
There was some fundamental basis for the selling as the inflation numbers in Q2 GDP were revised higher and initial jobless claims continued to show a tight jobs market. After the open in stocks, the market took a further hard turn lower and didn't bounce until very late in the day.
Despite all that, the FX market and bonds were relatively sanguine. Cable held a huge bid even as expectations for an ultra-aggressive BOE hike in November cooled. The euro also made some solid gains, which has been rare on ugly days for equities.
Even the ECB downplaying the chance of an emergencey move to prop up Italian bonds hardly wobbled fixed income or broad sentiment.
Commodity currencies weakened but remain well-within yesterday's ranges.
In terms of headlines, I've highlighted Putin's speech tomorrow as it will come early in New York around the time of the PCE report. Those two have the potential to set the stage for Q4 in a big way, though I wouldn't rule out another day of skattered flows.
