- US September ISM manufacturing 50.9 vs 52.5 expected
- Kwarteng: Economic deal will be backed by iron-clad commitment to fiscal discipline
- Fed's Williams: Fed is cooling inflation but underlying pressures still strong
- BOE's Mann: I am concerned about upward drift in inflation expectations
- US S&P Global September final manufacturing PMI 52.0 vs 51.8 prior
- UK to rush forward debt-cutting plan
- Atlanta Fed GDPNow Q3 growth targeted at 2.3% versus 2.4% last
- Bank of England says it stands ready to buy GBP5 billion of gilts at each reverse auction
- OPEC+ cancels tomorrow's technical meeting - report
- US construction spending for August -0.7% vs. -0.3% estimate
- S&P Global Canada manufacturing PMI 49.8 vs 48.7 prior
- Bank of Israel hikes rates by 75 bps
Markets:
- Gold up $40 to $1699
- WTI crude oil up $3.79 to $83.26
- US 10-year yields down 15 bps to 3.65%
- S&P 500 up 93 points, or 2.6%, to 3678
- NZD leads, JPY lags
Q4 certainly started off much better than Q3. The market did a great job of shaking off the Credit Suisse rumors as futures were higher and the US dollar lower coming into New York trade but after a good start, there was a quick stumble in stocks. That changed after a softer ISM manufacturing report.
The dollar fell in the aftermath and equities soared. In bonds, a 4% risk free yield is suddenly looking like a memory with 10s quickly down to 3.65%.
The commodity currencies were particularly strong along with GBP. That group has had the tightest correlation with the risk trade so that's not surprising but it was a nice turn as the commodity group erased Friday's declines and GBP continued its rebound.
The euro didn't get much of a lift as the market contemplates what's next from the ECB and in the energy crisis. USD/JPY rebounded 50 pips from the lows on risk appetite. The pair remains close to 145.00 as that battle rages.
