The US bond market was closed due to the Columbus Day holiday. Other government offices were closed as well. So there were no economic releases to speak of today coming out of the US (or Canada as well).

However, US stock markets were open, the forex market was of course open, and some Fed governors, one "Market Wizard" and one influential bank CEO gave their thoughts on the economy

The Fed governors who spoke were Chicago Fed Pres. Charlie Evans who is retiring in the new year and the Vice Chair of the Fed, Lael Brainard.

Evans is more of a dove and spoke more positively saying that inflation could be lowered relatively quickly without recesssion risk or higher unemployment. He spoke more to the Goldilocks scenario and with him bowing out at the end of the year, it makes sense that what he says is not to harsh.

Fed's Brainard, was also a bit less hawkish, choosing to remind the markets

  • Output has decelerated so far this year by more than anticipated, suggesting that policy tightening is having some effect.
  • The stock of excess savings held by households is about 25 percent lower, which may imply a more subdued pace of consumer spending going forward than had been projected.
  • Monetary policy will be restrictive for some time

  • Fed should move forward deliberately to assess how economy, employment, inflation are adjusting; to inform path of policy rate

The market wizard comments came from Paul Tudor Jones. He said that it will be very challenging times for the Fed. That he expects wage hikes of 5 to 10% which would make it challenging for the Fed to reach it's 2% goal. He warned that we will need to have short term pain to achieve long term gain, and that the 2020s would be a period where the focus will be on debt dynamics after the experimental period where yields were depressed. He is ok with being in cash as long as the central banks don't back out of their inflation fighting mode.

The CEO was JP Morgans Dimon who in an interview said that stocks could go another 20% and that the US was likely to enter into a recession 6-9 months from now. He sees rates moving higher than expected and the next move could be more painful for investors. He argued that QT will be an issue and the Russian war is also an issue that could upset the apple cart.

Dimons comments hurt stocks and sent the dollar modestly to the upside. Whereas Brainards comments soothed the markets a bit.

Nevertheless, the US stocks are closing lower for the 4th day in a row, led by the Nasdaq which fell by just over 1%. The S&P intraday, extended below its 200 week MA near 3600. The low reached 3588, but bounced and closse at 3612.40.

The price of gold moved further away from the $1700 to a low of $1665.78. The price is trading at 1667.60, down -$26.10 on the day.

Bitcoin is trading back below the $20000 level at $19238.

In the forex, the USD is the strongest of the majors. The AUD is the weakest as it trades to the lowest level since April 2020 (and a new 2022 low). The USDJPY inched closer to the 2022 high at 145.90 that attracted BOJ intervention a few weeks ago. The USDCHF is moving closer to its 2022 highs between 1.0049 and 1.0061. The price moved back above parity to 1.0010 before rotating back to the downside into the close. The price is trading at 0.9995.

forex
The strongest to the weakest of the major currencies