Morning Call Script - 11 Oct 2023
Overnight asset drivers & the impending data calendar
Softer Fed message has led to a drift lower in USD, lower US FI (now just a 30% chance of a Fed hike this yr) and higher equities... but after the initial momentum post nfp, the correction has waned.
There has not been a huge dislocation in prices overnight as we consolidate the aforementioned position squeeze. The market is finding a new clearing price (EUR$ 1.06, $JPY 148.85, GBP$ 1.2293 and AUD$ 0.6420) as we await the key inflation data from the US in the coming days ... PPI / CPI
Asia stocks followed the positive tone set by the US aided by the hope of fresh China stimulus (Bloomberg)
Bostic sung from the same hymn sheet as Logan/Daly/Jefferson and the market is excited again that we may have finally reached "peak fed rates" ... NickiLEAKS agrees (WSJ)
Nordstream 2.0? Finland have indicated that 'outside activity' likely damaged gas pipeline ... (Reuters). European Gas prices have hit a 7month high but this (for now) has done little to dent the positive sentiment in asset prices.
Have a great day, and keep smiling!
Morgan Stanley Thoughts on the Market - Keith Weiss: How Generative AI Could Affect Jobs
GER (07:00): Final CPI
USD (12:00): MBA
USD (13:30): PPI
USD (18:00): 10yr auction
USD (19:00): Fed minutes
Fed Speak: Bowman (09:15), Waller (15:15), Bostic (17:15)
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