Markets:
- Gold up $26 to $2655
- US 10-year yields down 1 bps to 4.08%
- WTI crude down 30 cents to $75.56
- NZD leads, JPY lags
- S&P 500 up 0.7%, touches recent file
Friday become a traditional risk-on day however it’s not solely clear why. Inventory futures have been adverse and the US greenback was regular in pre-market buying and selling however large bids hit on the US fairness open and FX adopted the identical sample, with Treasury yields falling led by the entrance finish.
Information was combined with PPI following CPI barely increased whereas UMich sentiment missed to the draw back barely. A more-likely offender was financial institution earnings, together with feedback from J.P. Morgan that shopper spending was regular and never deteriorating. Earnings at JPM and Wells Fargo have been additionally good, boosting monetary shares broadly.
There’s anticipation of bulletins of additional Chinese language fiscal stimulus at press occasions on Saturday and Monday so that might dictate early-week buying and selling.
Total strikes have been small however the yen was a notable underperformer. That is most-likely a product of the danger commerce however there may be some place squaring as we depend all the way down to the US and Japanese elections. The S&P 500 rose to file intraday and shutting highs with small caps significantly sturdy at the moment and the Russell 2000 up 2%.
The loone was a notable underperformer as soon as once more. The session excessive got here earlier than the sturdy jobs information and that led to a 50 pip decline initially. Nevertheless that drop did not solely final as consumers stepped in shortly after which more-strongly after the BOC enterprise outlook survey. The Oct 23 BOC resolution is prone to grow to be a litmus check for world central financial institution easing. Present pricing is 50/50 for 25 bps or 50 bps. The loonie has now declined for eight straight days, which is ominous given the backdrop in oil and shares in that point interval.
Notice that US bonds and Canadian markets are closed Monday for a vacation.
Have an amazing weekend.