Morning Call Script - 02 Nov 2023
Overnight asset drivers & the impending data calendar
What’s Moved Overnight
A US fixed income rally led by 4 elements yesterday.. US10s @ 4.73%, 5s @ 4.66% and 2s @ 4.97%.
The Atlanta Fed GDPNow forecast dropping to 1.2% for Q4,
The Treasury refunding announcement was not as "stark" as feared
A wave of soft / mixed activity data ... ISM Mfg 46.7 vs exp 49.
JPow delivered what was expected, missed some opportunities to be overtly hawkish on growth but left Dec live, enough flexibility that hikes could still come if the data delivered (Nordea FOMC Review - Unsure, Westpac - FOMC strong on optionality)
As a result it feels like a position squeeze after the mid Oct pronouncements of 10s hitting 6% etc etc as well as a mechanical unwind of cta shorts in equities.
Less vol in FX but USD is softer along with US Fi ... EUR 1.06, JPY 150.40, AUD 0.6425 and NZD 0.5880
Have a great day, and keep smiling!
Podcast for the Commute
Morgan Stanley - What the New US Speaker Means for Markets
The Day Ahead
EUR (08:50): French PMI
EUR (08:55): German PMI
NOK (09:00): Norges
EUR (11:00): ECB Lane
GBP (12:00): BoE
USD (12:30): Initial Claims
Apple's earnings
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