Market Update – Markets prepare for US CPI & Harris-Trump high-stake debate

Asia & European Sessions:

• Wall Street recovered slightly from Friday’s dip. Dip buying got the ball rolling and short covering has added to the bullish momentum.
• Expectations for a soft, rather than hard landing, with the FOMC expected to cut rates by only -25 bps rather than -50 bps have supported as well. The advent of the Treasury’s $119 bln in auctions, along with a heavy corporate calendar also weighed.
• Nvidia and Tesla have paced the strength in big tech. The Dow advanced 1.2%, with the S&P500 and NASDAQ climbing 1.16%. Strength was broadbased. Five of the 11 S&P 500 sectors posted gains of better than 1%, led by consumer discretionary and IT.
• Sights are on today’s presidential debate and then CPI Wednesday. 
• European stock markets are narrowly mixed in early trade, with the FTSE 100 underperforming, after a drop in the ILO unemployment rate. The overall labor market report was not as clear-cut, but the data will add to the arguments against back to back cuts and another move from the BoE this month.
• German HICP inflation was confirmed at 2.0% y/y. The data will add to the arguments in favor of a cautious cut from the ECB on Thursday.

Financial Markets Performance:

• The USDindex found its footing and rose to 101.68 from an overnight low of 101.14.
• The USDJPY lifted to 143.21. The Yen corrected, which helped to limit the slide in the Nikkei.
• Oil returned to $67.60 after Monday’s gain, driven by the return of a risk-on tone to wider markets.
• Gold edged up 0.36% to $2506.38 ahead of US Inflation tomorrow.

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Andria Pichidi

Market Analyst

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