- Missiles have been launched from Iran toward Israel. Missiles entering airspace in TelAviv
- Iran says its response to Israel has been carried out
- IDF spokesperson: We will respond to Iranian missiles at the appropriate time and place
- US September ISM manufacturing index 47.2 vs 47.5 expected
- US August construction spending -0.1% vs +0.1% expected
- US Sept S&P Global final manufacturing PMI 47.3 vs 47.0 prelim
- JOLTS job openings 8.040M vs 7.660M estimate
- Canada September S&P Global manufacturing PMI 50.4 vs 49.5 prior
- ECBs Kazaks: Very much agree with market pricing on ECB's o October interest-rate decision
- Israeli assassinates commander in charge of the weapons transfer from Iran to Hezbollah
- Iran informed 'international parties' of the size and timing of its strike
- Atlanta Fed Q3 GDPNow cut to 2.5% from 3.1%
- SNB's Schlegel: Reason for last week's rate cut was lower inflationary pressure
- New Zealand GDT price index +1.2%
- Fed's Cook predicts AI-fueled productivity gains
- Dallas Fed September service sector outlook index -2.6 vs -7.7 prior
- New Japan PM Ishiba: Japan on the cusp of making complete exit from deflation
- France's Barnier: I plan to reduce deficit to 5% of GDP in 2025
Markets:
- Gold up $24 to $2685
- WTI crude oil up $2.15 to $70.32
- US 10-year yields down 6.3 bps to 3.73%
- CAD leads, NZD lags
- S&P 500 down 53 points to 5708, or 0.9%
Economic data wasn't the driver of market moves on Tuesday but rather a missile strike by Iran in Israel. Reports so far don't suggest casualties or damage but it's early. Israel is also talking about a response so the market is waiting for that but fearing damage to Iran's oil infrastructure.
The attack was either leaked by Iran or picked up by US/Israeli intelligence beforehand so the market moves came on the first warnings with strong bids in the yen and dollar. Gold and oil also benefited while US stocks went from modest losses to a 2% decline in the Nasdaq.
Layered into that was a strong JOLTS report that suggests the Fed won't need to cut 50 bps in November. Still, we have some major data coming in the remainder of the week that will overshadow that data point, including Friday's non-farm payrolls.
After the dust settled on the attacks, there was some dip buying that helped to lift commodity currencies and the pound but they remained below pre-attack levels, with the exception of CAD.
It was also the first day of the quarter so flows were a factor, particularly in fixed income.
