Central banks:

 Bank of England left policy unchanged but   hinted strongly that negative rates may be coming, the bank plans to explore how a negative bank Rate could be implemented effectively “ BBG  GBP dropped .5% on news, Front End gilt yields dropped hard by ~5 bps ,further into negative territory both 2 & 5  year yields currently stand at -.12%  Not a sign of confidence in the Economy now is it?

 Bank of japan left rates unchanged, vowed to work closely with new PM and upgraded economic forecast for first time since March a sign that Economy has bottomed-(BBG)

Fed not Dovish enough? Some say for the reason for drop in stocks, my take is that market wanted a stronger signal that more QE is on the way, not just punting to hopes of Fiscal stimulus. With the Election 7 weeks away, the Fed does not want to be perceived as being partisan one reason I believe they shied away from a firm commitment for more QE.

 Markets:

 A traditional Risk Off move stocks Lower bonds higher European 10-year yields lower by 1-2 bps across board. In treasuries longer yields down a bit more then short end 30s -4.6 bps 3s -1.6bps thus flattening the curve. A bit of pessimism regarding the US economy possibly the reason. Currencies sideways outside of the GBP better then expected Aussie jobs report caused a brief spike in the currency currently trading sideways. Oil touch heavy after yesterday’s Short squeeze, OPEC tele- conference today Saudi Arabian oil minister issuing some harsh comments towards countries that do not comply with production cuts. Soybean  continue to trade above $10 as strong  Export demand continues. Lumber trade choppy last 2 days as Forest fires and possible decrease in Spot prices making the trade directionless for now.