Let us start with an “attention getter “type headline Per Bloomberg “A U.K. Government report sad GDP will be as much as 10.7% lower by 2034 if there’s no orderly Brexit and Supply of Workers from Bloc dries up.” More of a scare tactic then anything as UK markets showed very little reaction to headline. Bank of England’s carney will be speaking at 10:45 CST to discuss Brexit and the annual bank Stress test results
Let move towards more fed bashing by president Trump This time from a Washington post Interview last night he said “not even a little bit happy with my selection of Jay, I’m doing deals and not and I’m not being accommodated by the Fed “. I will connect another Bloomberg piece to this story as Treasury secretary Munchin as supposedly been asking primary dealers if they prefer rate hikes or faster balance sheet reduction, This could be a way for Fed to tighten policy without “enraging trump”. Feds Powell speaking today is the highlight for Risk Events; he takes the stage in New York at 11:00.The forum he is speaking at is the Economic Club of New York; besides his prepared speech, he will take a few questions from the Audience. US Inflation breakeven is an implied inflation rate over the term of the stated maturity, a way to look at what inflation rates will be over a certain time horizon.US 10 year breakeven scored a new 2018 low today and 5 year maturities touched lowest level since October. The precipitous drop in oil is having an Impact on inflation forecasts and may cause the Fed to become less aggressive in hiking rates next year.
Dollar not acting like this will come true trading higher for fifth consecutive day, creeping closer to a new 2018 high. Euro Steady, GBP +.4% and Jpy little changed. Keep an eye on three Week GBP vol as this will encompass the Dec 11th Vote on Brexit deal, it has been creeping higher for fourth consecutive day.
Comments from Chinese’s Ambassador to US “that an al out trade war was unimaginable and hoped that weekend talks could result in a way forward “-Reuters. Optimistic tone I guess is what “risk “markets have latched onto. Spoos +11 handles NASDAQ +37; NKY closed +1.3% European bourses Steady to higher as well. Risk On theme for Now, Copper +.6%.
Crude A bit Heavy API reported a build of 3.45M if EIA confirms would be the 10th consecutive weekly build in oil stocks. Plenty of OPEC chatter about cutting production could keep a floor under prices. Natural gas on the Bid again this morning Weather mixed but December Expiration maybe causing some gyrations
7:30 Second look at Q3 GDP
10:45 Bank of England Carney talks Brexit
11:00 Fed Chairman Powell on the Economy