Headlines:
- Markets seek shelter as Israel orders Gaza evacuation
- Oil rallies back on the week on Middle East fears
- The bond market continues to hold all the cards
- ECB's Visco: Uncertainty looms great on global economy
- BOE's Bailey: Last policy decision was a tight one
- PBOC says it still has ample room to support the economy
- France September final CPI +4.9% vs +4.9% y/y prelim
- Spain September final CPI +3.5% vs +3.5% y/y prelim
- Switzerland September producer and import prices -0.1% vs -0.2% m/m prior
- China September M2 money supply +10.3% vs +10.7% y/y expected
- German economy to show another mild decline in Q3 - economy ministry
Markets:
- CHF leads, NZD lags on the day
- European equities lower; S&P 500 futures flat
- US 10-year yields down 10 bps to 4.608%
- Gold up 1.5% to $1,897.53
- WTI crude up 4.0% to $86.26
- Bitcoin up 0.3% to $26,807
It started off with a more tentative mood but markets eventually settled on seeking shelter again - similar to Monday - as Israel threatened attacks on Gaza by ordering an evacuation within the next 24 hours.
Equities retreated as bond yields slumped hard and that is helping to underpin gold and oil prices once more today.
10-year yields in the US are down 10 bps to 4.608% while gold is jumping up by 1.5% to close in on the $1,900 mark. Meanwhile, WTI crude is over 4% on the day to above $86 as oil rallies back Monday levels again.
In FX, the reaction is more muted though but the dollar is steadying itself after some mild losses early on. USD/JPY is down 0.15% to 149.57 but not too far off its earlier high of 149.80 during the session. Meanwhile, EUR/USD is flattish at 1.0525 and GBP/USD just up 0.1% to 1.2185 on the day.
After the bond rout yesterday, caution ahead of the weekend is messing up the flows in markets and that won't make it easy until the dust settles in the Middle East.
