Headlines:
Markets:
We had a pretty quiet session with no major news releases. The main highlight was the UK CPI report where the headline CPI rose to 3.5% y/y in September, up from 3.1% and slightly above the 3.4% expected, driven mainly by higher energy costs. Core CPI also accelerated to 2.8% from 2.6%, while services inflation climbed to 3.7% from 3.4%. The data sealed expectations for a 25 bps BoE rate hike in November, which markets had already priced at around 96%.
Other than that, we haven't got anything market-moving. There were some headlines about Putin signalling a willingness to improve relations with the US. He said Russia is interested in restoring economic ties and could increase fertiliser supplies to the US. He also said Moscow is ready to help resolve the Iran situation and thanked Trump for his attention to a potential settlement in Ukraine.
ECB's Kazaks said further monetary tightening may be necessary if inflation remains elevated, while noting that higher yields are already providing some additional tightening and could slow economic activity. He also said he sees no current conditions for excessive wage demands, with limited concern about wage-driven inflationary pressures.
Finally, Iran's Foreign Minister said to the Financial Times that Tehran remains open to a diplomatic solution with the US but has little trust in Washington. He added that since the US has shown no willingness to reach an understanding, there is little reason to expect progress now.
Despite such comments, markets retain some hope given the sudden increase of positive reports and the proximity to the midterm elections. Trump might want to secure at least a short-term deal to bring energy prices and Treasury yields lower, while boosting the stock market. Time will tell, but he will likely need to make some major concessions.
This article was written by Giuseppe Dellamotta at investinglive.com.
Source: Investing Live - News
