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What to Watch: CPI, UK Mini-Budget Chatter, Gilt Buy-Op, 30Y Sale R/O

OUTLOOK

Tsys trading narrowly mixed, bonds off recent highs on moderate volumes (TYZ2 >305k; USZ2>61k) as market awaits latest inflation metric following Wed's hawkish ("better to do too much, than too little") Sep FOMC minutes.

  • CPI at 0830ET (8.1% est vs 8.3 prior; Core 6.5% est vs. 6.3% prior), as well as weekly claims (225k from 219k; continuing (1.365M from 1.361M). European CPI measures overnight helped Tsys move off lows.
  • Market will be watching BOE Linker/Gilt buy operation size/performance ahead Fri's stated end to the temporary operation while BBC notes chatter over plans on reversing mini budget. This lending to new highs in Tsys right now - followed quickly by denial from Downing Street officials.
  • Other item that could inject unexpected volatility in markets: Westminster rumors of backbench Conservative MPs considering ways to remove PM Truss grow louder, betting markets +75% PM Out In 2022/23.
  • No scheduled Fed speakers today
  • Treasury auction: $18B 30Y Bond re-open (912810TJ7) at 1300ET.

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