FICC Strategy Reports

Global equities sold off overnight, as global yields are broadly higher. China sensitive assets such as industrial metals, Chinese equities, and AUD/USD are weaker as Michael Waltz and Marco Rubio were appointed National Security Advisor and Secretary of State, implying a tough China stance from the new administration.

Despite the combination of holidays and a sparse data calendar we head into the new week against the backdrop of moderate risk impetus. US equity futures are testing higher as bitcoin trades fresh highs beyond 82,000. Conversely, oil has retreated below the 50Day MAV, currently at US$70.62p/b, amidst expectations of additional (US) capacity coming on stream.

Global equities, commodities and yields are lower this morning amid disappointing China stimulus news. Chinese equities, industrial metals, and AUD are the underperformers as one would expect.

Given large market moves seen in the past few sessions, there is some near term fatigue in the Trump trade.

It seems that every market is moving off of idiosyncratic or fundamental factors this morning, with the broader macro story largely stepping aside ahead of big US risk events to come.

Markets are being driven by the disappointing Chinese economic planning briefing post Golden Week, in which only 200 billion yuan in spending was announced vs expectations for trillions

Global equities are slightly lower while front end rates have continued to sell off as the market reassess the pace of easing in the wake of September payrolls and rising oil prices.

Global equities are rangebound to slightly lower overnight, while oil is slightly higher as geopolitical tensions simmer but have yet to escalate.

Chinese equities have continued to rally in the wake of the recently announced stimulus program; elsewhere global equities are broadly rangebound to slightly lower.

Overnight EUR/USD and GBP/USD are lower on weaker than anticipated PMI data (Eurozone Manufacturing at 44.8 vs. consensus at 45.7, UK manufacturing at 51.5 vs. consensus at 52.2).

While Powell’s press conference veered on the more hawkish side (in context of the outsized rate cut delivered), we are seeing a strong rally in the equity market (S&P futures +1.5%) in anticipation of further cuts to come.

Ahead of the widely anticipated start of the Fed’s easing cycle, US equity futures head into the open slightly bid, and the USD is widely offered against other G10 currencies.

Into the Start: Risk is bid with US equity futures extend gains from yesterday absent any overnight catalyst to shift market momentum.

Most major assets are rebounding post-NFP, with global equities, rates, and the USD higher.

US equity futures hit the red into nonfarm payrolls this morning; though depending on the outcome things could rapidly shift. Both oil and gold trade higher.

Most major assets are rangebound overnight as the market awaits payrolls on Friday. ADP is likely to spur some volatility today, but we’re not taking any signal from it.