Morning Call Script - 10 Oct 2023
Overnight asset drivers & the impending data calendar
Softer USD, lower yields and higher oil... the squeeze that started post NFP (more in the Sat Hark Back) has continued over the past 24hrs... EUR 1.0560, JPY 148.75, GBP 1.2225 and AUD 0.6410. FX has been led by yields with US2s back below 5% around 4.965%, 10s 4.64% despite oil holding onto some of its weekend gains $87.70.
The message from the Fed has softened. Last week Daly mentioned the recent FCI tightening was comparable to a hike and this was reiterated by vice chair Jefferson yesterday "I will remain cognizant of the tightening in financial conditions through higher bond yields and will keep that in mind as I assess the future path of policy" (Reuters). Logan also made similar comments around term premiums...""If long-term interest rates remain elevated because of higher term premiums, there may be less need to raise the fed funds rate,"
Another timely piece from The MacroTourist - The Fed Just Paused....
In the middle east, the fallout continues with Israel deploying troops to its Lebanese border as it readies a Gaza invasion force (WSJ, FT)
UK Retail sales weaker ... 2.8% vs previous 4.3%. Warm weather delaying winter shopping and one off purchase also dropping.
Finally FT reporting China's Golden Week domestic travel returned to pre-pandemic levels
Have a great day, and keep smiling!
NOK (07:00): Inflation
EUR (13:00): ECB Lagarde
USD (15:00): Wholesale Inventories
USD (16:00): Consumer Inflation Expectations
Fed Speak: Bostic (14:30), Waller (18:30), Kashkari (20:00), Daly (23:00)
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