Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
EXECUTIVE SUMMARY
- HARRIS HOLDS RAZOR-THIN LEAD ACROSS SWING STATES IN TIGHT RACE
- ISRAEL SOFTENS STANCE ON US-LED CEASE-FIRE PROPOSAL FOR LEBANON
- ISHIBA WINS LDP LEADERSHIP, SEEN AS SUPPORTIVE OF BOJ POLICY
- EUROZONE INFLATION DATA SUGGESTS DOWNSIDE SURPRISE FOR ECB
Figure 1: Eurozone inflation expectations edge lower in latest ECB survey
Source: MNI/ECB
NEWS
US (BBG): Harris Holds Razor-Thin Lead Across Swing States in Tight Race
Vice President Kamala Harris has all but neutralized Donald Trump’s advantage on economic issues, fueling an upbeat showing for the Democrat in battleground states where she and the former president are locked in a tight race about 40 days until the election. A Bloomberg News/Morning Consult poll of swing states shows Harris now leading among likely voters by 7 percentage points in Nevada, 5 points in Pennsylvania, 3 points in Arizona, Michigan and Wisconsin, and 2 points in North Carolina. The two are tied in Georgia.
US (BBG): Trump Says He’ll Meet Zelenskiy Friday After Slinging Insults
Former President Donald Trump said he will meet with Volodymyr Zelenskiy Friday morning, after stepping up his criticism of the Ukrainian president in recent days. “President Zelenskiy has asked to meet with me, and I will be meeting with him tomorrow morning at around 9:45 in Trump Tower,” Trump said at a press conference Thursday in New York. “It’s a shame what’s happening in Ukraine. So many deaths, so much destruction.”
US (NYT): Harris Meets With Zelensky, Anticipating a Handover of Global Crises
The meeting signaled that the White House was preparing her to take over a thorny diplomatic relationship should she win the election in November. Vice President Kamala Harris met with President Volodymyr Zelensky of Ukraine on Thursday at the White House, a sign that President Biden’s administration is positioning her to take over a politically fraught diplomatic relationship if she wins the election in November.
US (WaPo): Growing Number of New York Democrats Call on Mayor Eric Adams to Resign
A growing number of New York Democrats are calling on Mayor Eric Adams (D) to resign, broadly stating that his federal criminal indictment will hinder his ability to run the city. A federal indictment unsealed Thursday states that Adams has been charged with bribery, wire fraud and seeking illegal campaign donations. The 57-page indictment accuses the mayor of having "sought and accepted improper valuable benefits, such as luxury international travel, including from wealthy foreign businesspeople and at least one Turkish government official seeking to gain influence over him." The indictment followed several high-profile resignations within his administration in recent weeks.
US (BBG): Hurricane Helene Slams Florida With Powerful Winds and Rain
Hurricane Helene barreled into the western coast of Florida with dangerous winds, knocking out power for more than a million customers and threatening to unleash deadly flooding across several states. Helene made landfall near Perry with top sustained winds of 140 miles (225 kilometers) per hour, according to an advisory from the US National Hurricane Center, making it a Category 4 on the five-step Saffir-Simpson scale. The hurricane’s massive size means it’s expected to bring torrential rain and flooding to cities hundreds of miles away, including Atlanta and Asheville, North Carolina. Prior to making landfall, its outer winds extended out 310 miles, with storm causing widespread disruptions to ground and air travel.
JAPAN (MNI): Ishiba Win Sees Focus Shift to Foreign Policy & Security Stance
Victory for veteran contender Shigeru Ishiba (67) in the Liberal Democratic Party (LDP) leadership contest - winning at his fifth attempt - is set to maintain policy continuity in some areas while spurring a shift in others. Ishiba's win is viewed as a strong indicator of continuity with regards to not interfering with the BoJ's rate-setting decisions as well as in maintaining outgoing PM Fumio Kishida's fiscal plans. Ishiba won the run-off election by 215 to 194 votes, defeating hardline conservative and 'Abenomies' advocate Sanae Takaichi (63). Takaichi won the first round, winning 181 votes to Ishiba's 154, but was short of an overall majority. Former Environment Minister Shinjiro Koizumi (43) picked up the most votes from LDP lawmakers, but recieved little backing from grassroots party members with his 136 votes seeing him eliminated in the first round.
ISRAEL (BBG): Israel Softens Stance on US-Led Cease-Fire Proposal For Lebanon
Israeli Prime Minister Benjamin Netanyahu pledged to hold talks on a US-proposed cease-fire in Lebanon that could ease fears of a regional war, appearing to soften his stance despite domestic opposition. Israel will take part in deliberations on the plan for a three-week truce with Hezbollah in coming days, Netanyahu’s office said in an overnight statement. US Secretary of State Antony Blinken and Israeli Minister of Strategic Affairs Ron Dermer have already held talks on the matter, according to the White House. “Israel appreciates the US efforts in this regard because the US role is indispensable in advancing stability and security in the region,” the statement from Netanyahu’s office said.
UK (BBG): Starmer Dines With Trump in Bid to Ensure UK-US Relationship
UK Prime Minister Keir Starmer dined with Donald Trump for two hours as he sought to move past previous criticism of the former president to burnish personal relations ahead of a US election that may return him to power. The meal at Trump Tower in New York capped off a two-day visit by the new premier to attend the United Nations General Assembly. The two men discussed the longstanding friendship between their two nations and the importance of maintaining an enduring partnership, according to Starmer’s office.
CHINA (MNI): PBOC to Cut RRR and Key Rates From Sept 27
MNI (Beijing) The People’s Bank of China cut the reserve requirement ratio by 50bps and 7-day reverse repurchase operation rate by 20bps on Friday, according to a statement on its website. The RRR reduction, which excludes banking institutions already implementing a 5% RRR, adjusts the weighted average RRR to 6.6%.
The 7-day reverse repo rate is lowered to 1.5% from 1.7%, and remains the basis for establishing the 14-day reverse repo, temporary repo and reverse repo rates, the statement said. The Bank stressed the easing moves were part of an accommodative stance and would strengthen policy efforts to support the economy.
CHINA (BBG): China’s Market Marred by Glitches as Frenzy Grips Stocks
China’s long-awaited stimulus measures may have been too much for the markets to handle. With shares soaring and turnover reaching 710 billion yuan ($101 billion) in the first hour of trading on Friday, Shanghai’s stock exchange was marred by glitches in processing orders and delays, according to messages from brokerages seen by Bloomberg News. The Shanghai Stock Exchange is investigating reasons for delays, it said in a statement.
DATA
EUROZONE DATA (MNI): EZ Inflation Expectations Edge Lower - ECB Survey
- ECB 1-YEAR CONSUMER INFLATION EXPECTATIONS 2.7%
- ECB 3-YEAR CONSUMER INFLATION EXPECTATIONS 2.3%
Consumer inflation expectations across the eurozone fell again in August, the latest ECB survey shows. Helped by declining perceptions of current inflation -- falling to 3.9% in August from 4.1% in July, but still above the actual 2.5% y/y reported by Eurostat in August -- expectations at the one-year and three-year horizons slipped slightly below past perceptions of the inflation rate. Expectations for inflation over the next 12 months edged down to 2.7% from 2.8% previously, the lowest level since September 2021.
FRANCE DATA (MNI): French Inflation Very Soft; HICP Y/Y 0.4ppt Below Consensus
- FRANCE SEP HICP -1.2% M/M, +1.5% Y/Y
- FRANCE SEP CPI -1.2% M/M, +1.2% Y/Y
- FRANCE AUG PPI +0.2% M/M, -6.3% Y/Y
French inflation was very soft with HICP coming in at +1.52%Y/Y in September (consensus +1.9%Y/Y, prior 2.19Y/Y). On a M/M basis September HICP was -1.23% (consensus was -0.8%M/M). National (non-HICP) missed consensus by a similar amount at +1.17%Y/Y (consensus +1.6%, prior +1.17%). Looking at the national print breakdown there were notable falls in services to 2.55%Y/Y from 3.01% and energy -3.34%Y/Y from +0.44%. Manufactured products also fell by -0.30%Y/Y from -0.07% prior. Food prices fell marginally.
FRANCE AUG CONSUMER MANUF SPENDING +0.3% M/M, -0.1% Y/Y (MNI)
FRANCE AUG CONSUMER SPENDING +0.2% M/M, +0% Y/Y (MNI)
SPAIN DATA (MNI): HICP Y/Y Misses Consensus by 0.2ppt at 1.7% Y/Y
- SPAIN SEP FLASH HICP -0.1% M/M, +1.7% Y/Y
- SPAIN SEP FLASH CPI -0.6% M/M, +1.5% Y/Y
- SPAIN SEP FLASH CORE CPI +2.4% Y/Y
Spanish September preliminary HICP came in lower than expected on the yearly rate at +1.7% Y/Y (vs +1.9% cons; +2.4% prior) and the sequential reading at -0.1% M/M (+0.1% cons; 0.0% prior). There were larger misses for the national (non-HICP prints): with both headline and core missing expectations by 0.4ppt. National CPI came in at +1.5% Y/Y (vs 1.9% cons; 2.3% prior) and -0.6% M/M (vs -0.1% cons; 0.0% prior). Core CPI came in 4 tenths below expectations, at +2.4% Y/Y (vs 2.8% cons; 2.7% prior).
SPAIN Q2 FINAL GDP +3.1% Y/Y (MNI)
SPAIN Q2 FINAL GDP +0.8% Q/Q (MNI)
GERMANY SEP UE RATE (SA) 6.0% (FCST 6.0%); AUG 6.0% (MNI)
GERMANY SEP UE TOTAL (SA) 2.823 MN; AUG 2.806 MN (MNI)
GERMANY SEP UE NET CHANGE (SA) +17K; AUG +4K (MNI)
JAPAN DATA (MNI): Japan Sept Tokyo Core CPI Rises 2.0% vs. Aug 2.4%
- JAPAN SEPT TOKYO CORE CPI +2.0% Y/Y; AUG +2.4%
- JAPAN SEPT TOKYO CORE-CORE CPI +1.6% Y/Y; AUG +1.6%
- JAPAN SEPT SERVICES PRICES +0.6% Y/Y; AUG +0.7%
Tokyo’s core inflation rate rose 2.0% y/y in September, slower than August’s 2.4%, marking the first deceleration in five months but stayed above 2% for the fourth straight month, data from the Ministry of Internal Affairs and Communications showed on Friday. September’s slowdown was driven by lower energy prices (+9.5% vs. +17.4%) and households’ durable goods (+8.1% vs. +11.2%). The September data likely eases BOJ concerns over the upside risk to prices, but bank officials are focused on October price revisions to determine the strength of the wage-price cycle.
FOREX: JPY Shoots Higher on Ishiba Victory, EUR Slips on Inflation
- JPY gained sharply on the back of Ishiba's victory in the race for the leadership of the LDP, and de-facto Prime Minister of Japan. USD/JPY's 300 pip slippage reflects the concern priced into markets that the rival, Takaichi, could take the top spot, and usher in stronger critiques of BoJ rate hikes and a preference for a weaker currency.
- The reversal lower for USD/JPY confirms the rejection of resistance that coincided with the Y146.20 50-dma as well as the uptrendline drawn off the August 5th low (146.27 today). This could heighten the importance of the Friday high at 146.49 on any rallies ahead.
- EUR is the poorest performer ahead of the NY crossover, with soft French and Spanish inflation prints setting markets up for a lower-than-forecast outcome at Tuesday's Eurozone CPI Estimate. The implications for the ECB are real - markets had solidly assumed a pace of quarterly rate cuts from the ECB, but these inflation prints have bolstered calls for further action as soon as the October meeting. This speculation has driven EUR/GBP back toward recent pullback lows and major support at 0.8317 - the late Sept low.
- Canada's GDP print for July and US personal income/spending, PCE price index data for August are the calendar highlights Friday, as well as the final UMich sentiment print. The central bank speaker schedule is topped by ECB's Nagel, Cipollone and Fed's Collins, Kugler and Bowman.
EGBS: Supported by Soft Inflation Prints, Dovish ECB Repricing
Lower-than-expected flash inflation data from France and Spain supported EGBs this morning, with the implied probability of a 25bp October ECB cut reaching a new dovish extreme of almost 80%.
- While the flash inflation prints were the only real market movers, other regional data released this morning has supported the case for more ECB cuts (ECB inflation expectations, German unemployed persons and the EC’s sentiment survey).
- Bund futures are off intraday highs of 135.19 (with participants likely taking profit ahead of today’s US PCE release) but remain +40 today at 134.89.
- The German cash curve has very lightly bull flattened, with yields 4.0 to 5.0bps lower today.
- The 10-year OAT/Bund spread has tightened 1.5bps to 78bps, with some apparent interest in fading yesterday’s move above 80bp seen.
- 5/10-year BTP supply was digested smoothly, but likely contributed to Italian paper’s underperformance this morning, with the BTP/Bund spread 0.5bps wider.
- Broader macro focus shifts to the US PCE report, alongside potential commentary from Cipollone and Nagel.
GILTS: Early Rally Fades, Cues From Overseas Eyed
Gilts follow cues provided by EGBs during early Friday trade.
- Softer-than-expected CPI data out of Spain & France drove a rally at the open, with futures peaking at 98.90 before fading back to ~98.60 at typing.
- Key support at 98.11 remains untested during the latest corrective pullback, leaving the bullish technical picture in play. Initial support at yesterday’s low (98.31).
- Initial resistance at the 20-day EMA (99.71).
- Yields little changed to 1.5bp lower across the curve as the rally fades.
- Light bull flattening seen.
- 10-Year gilt/Bunds set to close at the widest level since Sep ’23, spread above 185bp, with dovish ECB repricing dominating this week.
- BoE-dated OIS shows 38bp of cuts through year-end and 121.5bp of cuts through June ’25, fading some of yesterday’s late hawkish repricing.
- SONIA futures -1.5 to +1.5.
- Only lower tier UK data is due today, which will leave focus on cross-market moves & U.S. data.
EQUITIES: Bull Cycle in E-Mini S&P Firms Following Thursday's Rally
Eurostoxx 50 futures trade firmly Friday morning, having tripped the bull trigger ahead of the Thursday close. Short-term momentum is tilted higher, with 5065.38 resistance (the 0.618 proj of the Aug 5 - Sep 3 - Sep 6 price swing) cleared to open 5100 and 5114 above. On an intraday basis, 5090.47 could cap rallies, but the picture remains firm the longer prices hold above the mid-week lows. A bull cycle in S&P E-Minis firmed again Thursday with the confirmed break above both round number resistance at 5800 and the 0.50 projection for the Sep 6 - 17 - 8 minor price swing at 5818.12. This confirms a resumption of the long-term uptrend. First key support is 5635.41, the 50-day EMA. Initial support lies at 5700.77, the 20-day EMA.
- Japan's NIKKEI closed higher by 903.93 pts or +2.32% at 39829.56 and the TOPIX ended 19.82 pts higher or +0.73% at 2740.94.
- Elsewhere, in China the SHANGHAI closed higher by 86.576 pts or +2.89% at 3087.529 and the HANG SENG ended 707.72 pts higher or +3.55% at 20632.3.
- Across Europe, Germany's DAX trades higher by 75.06 pts or +0.39% at 19315.8, FTSE 100 higher by 23.11 pts or +0.28% at 8308.48, CAC 40 up 22.27 pts or +0.29% at 7764.36 and Euro Stoxx 50 up 14.26 pts or +0.28% at 5046.85.
- Dow Jones mini down 7 pts or -0.02% at 42548, S&P 500 mini down 3.75 pts or -0.06% at 5800.75, NASDAQ mini down 37.25 pts or -0.18% at 20309.25.
Time: 09:50 BST
COMMODITIES: WTI Futures Remain Soft After Reversing Large Part of Recent Gains
WTI futures remain softer, reversing a large part of recent gains. This affirms the strength of resistance at the 50-day EMA of 72.25, which remains the key upside level. This price action confirms the recovery since Sep 9 as a correction. Note that MA studies are in a bear-mode set-up, highlighting a dominant downtrend. A reversal lower would refocus attention on $64.61, the Sep 10 low and bear trigger. Gold bulls remain in the driver’s seat and the yellow metal has again traded to a fresh all-time high. The move higher confirms a resumption of the primary uptrend and maintains the bullish price sequence of higher highs and higher lows. Moving average studies are in a bull-mode set-up, highlighting a clear uptrend and positive market sentiment. The focus is on $2675.5 next, a Fibonacci projection. Firm support lies at $2577.4, the 20-day EMA.
- WTI Crude up $0.05 or +0.07% at $67.74
- Natural Gas down $0 or -0.07% at $2.751
- Gold spot down $8.65 or -0.32% at $2663.27
- Copper up $0.1 or +0.02% at $463.9
- Silver down $0.24 or -0.75% at $31.7715
- Platinum down $1.74 or -0.17% at $1009.83
Time: 09:50 BST
| Date | GMT/Local | Impact | Country | Event |
| 27/09/2024 | 1230/0830 | *** |  US | Personal Income and Consumption |
| 27/09/2024 | 1230/0830 | *** |  CA | Gross Domestic Product by Industry |
| 27/09/2024 | 1230/0830 | ** | US | Advance Trade, Advance Business Inventories |
| 27/09/2024 | 1230/0830 | *** | CA | Gross Domestic Product by Industry |
| 27/09/2024 | 1330/0930 | US | Fed's Susan Collins, Adriana Kugler | |
| 27/09/2024 | 1400/1000 | ** | US | U. Mich. Survey of Consumers |
| 27/09/2024 | 1500/1100 | CA | Finance Dept monthly Fiscal Monitor (expected) | |
| 27/09/2024 | 1715/1315 | US | Fed Governor Michelle Bowman |
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.