Morning Call Script - 27 Oct 2023
Overnight asset drivers & the impending data calendar
What’s Moved Overnight
Overnight Data... Tokyo Core Inflation 2.7% vs exp 2.5%, headline 3.3% vs exp 2.8% ... Ahead of next week's BoJ, this has helped cap USDJPY. As a leading indicator for national inflation, will expectations of a policy change increase for the meeting? AUD PPI also came in hotter, 1.8% QoQ vs exp 0.5%, which is a 4 quarter high.
Strong 7yr auction, mixed US data and ECB raising expectations that the majority of G10 central banks have reached their peak, yesterday's stabilisation in US yields (2s @ 5.05%, 5s @ 4.80%, 10s @ 4.86%) has taken some of the pressure off cross asset markets.
Despite a weak close on Wall Street, Asian equities traded well overnight, Nikkei and HSI up approx 1%. Amazon saw steady cloud growth and robust sales (shares +5% in after hours), whilst Intel also outperformed on high demand for AI products (+7.5%).
FX is consolidating, watching in envy the moves in Nasdaq and fixed income ... EUR 1.0570, JPY 150.18, AUD 0.6340, NZD 0.5822 and GBP 1.2140.
Oil up 1$ as we head into another weekend of uncertainty in the ME. Biden ordered two strikes on facilities in Syria whilst the new House speakers first move has been to ask Biden to split funding requests for Israel, Syria and the US border.
AP - US fighter jets strike Iran-linked sites in Syria in retaliation for attacks on US troops
Reuters - New US House speaker says Ukraine, Israel funding request should be split
Have a great day, and keep smiling!
Podcast for the Commute
Unchained - SBF takes the stand
The Day Ahead
Light European data calendar.
USD (13:30): Core PCE deflator
USD (14:00): Fed Barr
USD (15:00): Michigan Consumer Sentiment Survey
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