Morning 10-31


  • China’s Bond market again seeing sellers as yields climb  for a second day.10’s +6.8 Bps,5’s +7.5 Bps
  • Bank of Japan left Policy Unchanged as expected but the vote for such action was 8-1.The lone dissenter was in favor of more stimulus as the BOJ trimmed Inflation Forecasts. NKY closed little changed .After chopping around post Decision the Yen is steady to lower as I type
  • Germany’s celebrating unification day it is a Public holiday, volumes a little lighter in Europe. Dax closed
  • Next Fed chair appears will be Jerome Powell. His odds of nomination are at 83% according to Trump Will make announcement on Thursday.
  • Catalonia Government accepts central rule and new elections (Reuters). Germany /Spain yield spread tighter by 1.7 Bps.
  • According to the IMF Saudi Arabia needs Oil to trade > $70 barrel in 2018 to break even on spending plans (Bloomberg)
  • Positive comments regarding apple overnight, ahead of earnings on Thursday see Stock higher this morning by 1%
  • Republicans say Nothing will derail tax plans, Senator Collins of Maine has some concerns with Current republican Plan
  • Two day Fed meeting starts today


Data Recap:

  • China manufacturing PMI  6 vs. F/C 52. Copper Traded lower on release.
  • French CPI, GDP and PPi were all in line or a slightly higher than expectations. Per Bloomberg the Run of higher GDP, fifth consecutive quarter of gains is best run in 6 years.
  • Eurozone GDP and Unemployment rate a beat. CPI missed consensus core .9 vs. f/c 1.1 and headline 1.4 vs f/c 1.5



 Theme overnight: Risk On

  • Euro trading a little bit lower on the disappointing CPI but has very narrow range overnight of 30 Pips.
  • Bunds -15 ticks, Bonds -5 ticks Gold -$4 and Dollar steady to higher. Oil little changed overnight.
  • Spoos +5, NASDAQ +21 handles, Stoxx+ 20 ticks, Nickel trading higher again as it trades above 50 d MA for 16 Th consecutive day (BB).Electric car boom the cause for the Love.

Markets leaning risk on and Why not, nothing seems to derail the stock market Euphoria Right Now .Manafort investigation/indictments are more of a distraction then anything. The focus should be on the official tax plan to be released later this week and what if any Changes are in the final disclosure. Month end activity could dominate flows today as the Economic calendar even though light has the Employment cost index at 7:30 which could cause some excitement in the Trade. Chicago PMI at 8:42 and then Consumer confidence at 9:00.Weaker European CPI data has had a very short lived impact on European markets but it is important to remember that Inflation did disappoint overnight.

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