Gilt Yields Spike As Budget Jitters Mount

Economic

Bond

Summary:

Gilt yields surged to 1-year highs as UK fiscal concerns mount, while stocks endured a chunky tech-led sell-off on Thursday. Today, the October US labour market report stands as the calendar highlight.

WHERE WE STAND

It’s not exactly Truss-esque yet, but the market’s verdict on Chancellor Reeves’ first Budget, delivered on Wednesday, became increasingly clear yesterday.

In short, the high tax, high borrowing, high spending, high inflation, low growth combination that Reeves delivered at the despatch box has gone down like a lead balloon with Gilt participants. Benchmark 2-year yields rose over 20bp yesterday, rising to the highest level since May, while the 10-year yield has now risen over 25bp since Reeves stood up in the Commons, to the highest yield since last November.

Clearly, participants are highly concerned about the sizeable amount of borrowing unveiled in the Budget, with borrowing on average set to be around £35bln higher every year for the next five years. Furthermore, the lack of fiscal headroom, at just £16bln, leaves it highly likely that Reeves will have to come back for more revenue raising tax measures, or unveil an even greater amount of borrowing, in the event of even the most minor economic shock, or if the economy fails to achieve the growth expected in the OBR’s latest forecasts. Forecasts, which, of course, see GDP growth remaining below 2% for the next five years.

On the subject of headroom, it’s worth remembering that a 1.3pp rise in gilt yields across the OBR’s forecast horizon would entirely wipe out any headroom, and see the Government’s fiscal rules being breached.

It wasn’t only the move in gilts which caught the eye, but also the fact that the GBP moved in the opposite direction, with cable sliding beneath the 1.29 handle, to its lowest level since August. FX moving in the opposite direction to rates is a classic telltale sign of a market highly concerned over the unstable fiscal outlook.

Does anyone have Kwasi Kwarteng on speed dial? A penny for his thoughts! If September 2022 was the ‘Kami-kwasi Budget’, then this is starting to look like a spooky and unwelcome Halloween surprise from the pumpkin now in Number 11.

Away from the UK, markets were volatile elsewhere, taking on a distinct risk-off vibe, as fallout from disappointing Meta and Microsoft earnings on Wednesday cast a shadow over sentiment.

The S&P 500 ended the day just shy of 2% lower, the biggest one-day decline since early-September, while the Nasdaq 100 slumped over 2.4%, also the biggest one-day loss since the start of last month. While I remain bullish in the medium-, and longer-term, it’s clear that participants need little-to-no excuse to take risk off the table, ahead of the election next week. Choppy trade, with a downside bias, seems likely to continue until then, as traders square up positions ahead of polling day.

Earnings, though, it must be said, were considerably better than a day prior yesterday. Amazon delivered top- and bottom-line beats, albeit with somewhat soft guidance, sending shares 6% higher after hours. Intel, meanwhile, traded as much as 15% higher in the post-market session, as participants cheered a solid earnings slate, and upbeat guidance. Finally, Apple, also delivered beats on revenue and profitability, albeit while showing some weakness in the services rev line, though earnings growth remained strong.

Elsewhere, yesterday marked the second straight day of better than expected eurozone data – I haven’t seen any pigs flying yet, but will be sure to check!

Unemployment fell to a fresh record low 6.3% in September, though the data was accompanied by hotter than expected inflation data, with headline CPI rising to 2.0% YoY, and core CPI holding steady at 2.7% on an annual basis. Together, the data kills the chances of a 50bp ECB cut in December stone dead, in turn helping the EUR to notch a 4th straight daily gain, although the $1.09 figure remains a bridge too far for now.

In fact, broadly, yesterday was a day of notable dollar softness, even if the move had little by way of explicit catalyst, and was more of a slow but steady grind lower. Perhaps this was driven to some extent by profit taking after recent gains, though a firmer JPY after a marginally more hawkish than expected decision from the BoJ would also have applied some pressure. Still, I remain bullish on the buck, amid the ongoing ‘US exceptionalism’ theme, with growth stateside continuing to vastly outperform that of DM peers. Electoral noise, however, is likely to overtake growth considerations in the short-term.

Still, that exceptionalism theme was again in full effect yesterday, with initial jobless claims rising just 216k last week, well below the BBG f’cast range, while the headline PCE deflator – the Fed’s preferred inflation gauge – fell to 2.1% YoY, within touching distance of the Fed’s price target. A 25bp cut next week, followed by further such cuts at every meeting in 2025, until we reach neutral in late-summer, remains my base case.

LOOK AHEAD

It’s finally Friday! But, a busy data docket awaits as the week wraps up, highlighted by the October US labour market report.

Headline nonfarm payrolls are seen rising +105k on the month, a substantial slowing from the +254k pace seen in September, though the bulk of this is set to be driven by strikes (e.g. at Boeing, likely a -30k impact), as well as the impact of Hurricanes Helene and Milton (likely around -50k to -80k impact). Unemployment, meanwhile, is set to hold steady at 4.1%, while average hourly earnings are seen rising 0.3% MoM, though this latter figure could be skewed higher, if hurricane-linked job losses disproportionately impact those on lower salaries.

For markets, the jobs report is likely to be a relatively straightforward case of ‘good news is good news’, and vice versa, with participants set to focus on the macroeconomic picture painted by the data, as opposed to any potential dovish policy implications from a soft print. That said, there is little at this stage that could deter the FOMC from a 25bp cut next week, while the bar for another ‘jumbo’ 50bp cut is rather high.

Elsewhere, today, manufacturing PMIs are released from most major economies, excluding the eurozone, with the US ISM survey set to remain in contractionary territory, albeit ticking higher to 47.6, from a prior 47.2.

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ACY

Economic

The latest figures for Australia’s Consumer Price Index (CPI) reveal a persistent cooling of inflationary pressures, as indicated by a modest quarterly rise of just 0.22% in Q3 2024. This subdued increase has resulted in an annual CPI growth rate of 2.81%, slightly below market forecasts. Much of this reduced headline inflation can be attributed to newly introduced household electricity subsidies, which eased the CPI by approximately 0.4 percentage points, cushioning households from higher energy costs and helping to moderate overall inflation.

Easing Inflation in Australia How Lower Prices Could Lead to Rate Cuts Soon_1

The Reserve Bank of Australia’s (RBA) preferred inflation metric, the trimmed-mean CPI—which filters out highly volatile price categories—recorded a quarterly increase of 0.78%, translating to a 3.54% annual gain. This trimmed-mean figure closely aligned with RBA projections and highlights a tapering in the pace of core inflation across the year. The data marks a steady decline in underlying inflation momentum, with sequential quarterly growth easing from 1.01% in Q1 2024 to 0.78% in Q3. Consequently, the annualized trimmed-mean rate for September stands at 3.2%, inching closer to the RBA’s target inflation range of 2-3%, suggesting that inflation could be stabilizing within the bank's preferred thresholds in the coming months.

Easing Inflation in Australia How Lower Prices Could Lead to Rate Cuts Soon_2

Commodity prices during the quarter presented a mixed landscape, driven by substantial reductions in specific categories. Electricity costs, for instance, fell by 17.3%, while fuel prices dropped by 6.7%, reflecting the combined effects of governmental subsidies and recent international oil price fluctuations. Conversely, food prices experienced a modest uptick, while core goods prices—excluding the more variable categories of fuel and fresh food—saw a slight quarterly increase of 0.5%, with an annual rate now at 2.5%. Within these categories, prices of clothing, footwear, and new motor vehicles declined, while prices rose for new dwellings, tobacco, alcohol, and furniture, illustrating a nuanced inflation landscape.

Services prices saw a quarterly uptick of 1.1%, translating to a 4.6% year-over-year increase. This sector’s inflation was influenced by seasonal adjustments in property rates and a renewed demand for holiday travel, highlighting the impact of post-pandemic shifts in consumer behaviour. While rent growth has eased somewhat, costs for essential services—such as medical, financial, and hospital services—remained largely stable, indicative of a broader moderation in service-related inflation.

September’s monthly CPI data continues to reinforce this narrative of softening inflation, with the headline CPI rising by only 0.1% for the month. Year-over-year, the CPI for September was up 2.1%, with declines across electricity, new car, and dwelling prices supporting the monthly trend. This ongoing deceleration provides further evidence of reduced inflationary pressures, likely signalling that the RBA's monetary policies and government interventions are working as intended to cool the economy.

Looking ahead, this inflationary cooling raises the possibility that the RBA may consider interest rate cuts by early 2025. Analysts anticipate that such cuts may occur gradually, potentially at a pace of 0.25% per quarter, ultimately reaching a projected target rate of around 3.25%. Should the trend in moderated inflation continue, driven by factors such as a stabilizing labour market and targeted subsidies, the RBA may find itself in a favourable position to adjust rates, thereby fostering sustainable economic growth while keeping inflation well within target ranges.

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Owen Li

Economic

Political

Former President Donald Trump has sued CBS News, alleging the network's "deceitful" editing of a recent 60 Minutes interview with Vice President Kamala Harris misled the public and unfairly disadvantaged him.

In a statement released Thursday, CBS News called the former president's claims "completely without merit" and said the network intended to vigorously defend against the lawsuit.

The lawsuit, which comes just days before the two candidates face off in the 2024 presidential election, centers on two clips of an October interview 60 Minutes conducted with Harris. One of the clips was edited to include a longer section of her response to a question about the conflict in the Middle East. Trump's lawsuit contends this editing decision was meant to intentionally assist his opponent and mislead the public, something CBS News has disputed.

"To paper over Kamala's 'word salad' weakness, CBS used its national platform on 60 Minutes to cross the line from the exercise of judgment in reporting to deceitful, deceptive manipulation of news," the lawsuit claims. The suit says the former president seeks a jury trial and at least $10 billion in damages.

"Former President Trump's repeated claims against 60 Minutes are false," the network statement says. "The Interview was not doctored."

Trump's legal complaint was filed Thursday in federal court in the Northern District of Texas Amarillo division, a remote venue where the lone judge is a 2019 Trump appointee. Republican-led states and special interest groups have directed at least 14 politically sensitive cases to that court since January 2021, according to progressive watchdog group Accountable.US.

The lawsuit does not claim Trump was defamed by the network, said Geoffrey R. Stone, a First Amendment scholar and law professor at the University of Chicago, who reviewed the complaint. Instead, the suit attempts a novel use of a Texas statute that is meant to prevent advertisers from misleading the public about a product being sold — the Texas Deceptive Trade Practices Consumer Protection Act.

Stone called it a "misapplication" of the law.

"That statute is about sales — a salesperson can be held liable for stating that a product has certain positive effects when he knows it doesn't," Stone said. "But CBS is not engaged in advertising here."

Harvard Law Professor Noah Feldman, a constitutional law expert, said he was mystified by the Trump claims and called the case an "outrageous violation of First Amendment principles."

"This is a complaint so ill grounded that it comes close to being sanctionable as frivolous," Feldman said.

The former president has for weeks been voicing his displeasure about the interview on the campaign trail.

"Millions of Americans, including residents of Texas and this District, were confused and misled by the two doctored Interview versions," the suit alleges.

In an earlier statement released by 60 Minutes, the network explained the two clips were edited differently because one segment, which appeared on "Face the Nation," afforded more time to accommodate a longer section of Harris's answer.

"Same question. Same answer. But a different portion of the response," the Oct. 20 statement from 60 Minutes said. "When we edit any interview, whether a politician, an athlete, or movie star, we strive to be clear, accurate and on point. The portion of her answer on 60 Minutes was more succinct, which allows time for other subjects in a wide ranging 21-minute-long segment."

Trump had been invited to sit for his own interview on 60 Minutes but declined.

The former president has previously filed several lawsuits against media organizations, including a March defamation case against ABC News over a question asked by anchor George Stephanopoulos during an interview.

He has lost prior defamation lawsuits against CNN, The Washington Post and The New York Times.

Source: yahoo finance

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SAXO

Economic

Gilt yields are rising yesterday, one day after the UK Autumn Budget, primarily because the announced budget implies a significant increase in government borrowing. Specifically, the Debt Management Office (DMO) has outlined plans for GBP300 billion in gilt issuance for 2024-25, an increase of GBP20 billion from previous estimates. This expanded borrowing requirement puts pressure on gilt prices, pushing yields higher as investors demand more return to absorb the growing supply of government debt.

Looking ahead, there are compelling reasons to anticipate that Gilt yields may continue to rise. Inflationary pressures stemming from the budget—such as higher minimum wages and increased employer National Insurance contributions—could prompt markets to expect a more cautious approach from the Bank of England concerning rate cuts. This mix of increased inflation risks and higher supply expectations is likely to exert sustained upward pressure on yields over the longer term.

Here are three key reasons why Gilt yields may continue to surge in the next few weeks:

Rising Inflationary Pressure

The budget introduces significant inflationary risks. For instance, large increases in the minimum wage and employer National Insurance costs will likely raise labor costs in many sectors, particularly low-paid service industries like hospitality. This could exacerbate wage inflation and lead to higher prices in these sectors, contributing to broader services inflation.

The planned GBP100 billion in public investment over five years, though aimed at stimulating economic growth, may further fuel inflation in the medium term. Additionally, skills mismatches could worsen, driving up wages in certain sectors. This increased public investment could crowd out private sector borrowing and put upward pressure on interest rates.

Impact on Gilt Issuance

The budget necessitates higher levels of gilt issuance, amounting to GBP300 billion for the current fiscal year and an additional GBP94.9 billion spread over the next four fiscal years. This significant increase adds to concerns about the sustainability of government borrowing.

The issuance strategy has shifted focus from short-term to medium- and long-term gilts, requiring careful management to prevent market disruptions. The DMO has planned to diversify issuance across various maturities and maintain a regular schedule of syndications and auctions, which could impact investor sentiment and the pricing of gilts.

Slower Growth and Rising Concerns Over Fiscal Sustainability:

While the budget aims for growth and investment, the Office for Budget Responsibility (OBR) has revised growth forecasts lower from 2026 onwards, suggesting limited long-term economic benefits from these measures. The fiscal rules, while providing a framework for stability, offer limited headroom, raising concerns about the government’s ability to respond to economic shocks without additional borrowing.

The upward revisions in future borrowing requirements suggest sustained high levels of gilt issuance, which could increase the cost of borrowing for the government and potentially affect the broader economy.

Key Technical Levels to Watch for 10-Year Gilt Yields

Following the UK Autumn Budget, 10-year Gilt yields have broken through resistance at 4.35%, advancing to 4.43%, a level last reached during the autumn of 2023. The overall sentiment remains bearish, with yields showing potential to test the next resistance at 4.75%. If yields manage to break above this significant level—which aligns with the 2023 peak—they could extend their upward trajectory toward the 5% mark, a level not seen since before the 2008 Global Financial Crisis.

Three Reasons to Stay Bearish on Gilts After the UK Autumn Budget_1

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Cohen

Political

Economic

Despite so many votes having been cast, it is hard to know what it means. Many more people have yet to vote, and exactly how many there will be or how they will split are unknown. But there is one measure in the early voting data that could be more suggestive about the final results: the number of new voters who have already voted.

And an NBC News Decision Desk analysis of state voter data shows that as of Oct. 30, there are signs of an influx of new female Democratic voters in Pennsylvania and new male Republican voters in Arizona, two of the most important swing states.

The early votes of new voters — voters who did not show up in 2020 — are of particular interest because they are votes that could change what happens in 2024 relative to the last presidential election. (Who voted in 2020 and doesn’t show up this time is also important, but it’s impossible to know before Election Day.)

Already, the number of new voters in many of the seven closest battleground states exceeds the 2020 margin between President Joe Biden and former President Donald Trump. In Pennsylvania, for example, Biden beat Trump in 2020 by 80,555 votes. This year, over 100,000 new voters have already cast ballots in Pennsylvania, with more to come.

We can’t know how these new voters voted, but looking at who they are can provide hints about how 2024 might swing relative to 2020. Party registration does not perfectly predict a voter’s choice, but new voters who choose to register as Democrats are more likely to vote for Vice President Kamala Harris than not, and new voters who register as Republicans are more likely to vote for Trump. As a result, in the swing states where voters can formally register for a party (Arizona, Nevada, North Carolina and Pennsylvania), the new voters affiliated with a party may provide some hints about the 2024 election.

(In Georgia, Michigan and Wisconsin, where voters don’t officially register with a party, the best we can do to predict the partisanship of new voters relies on local voting patterns and demographics — data that can be quite noisy and sometimes wrong.)

The gender of new voters in these states is also public data, shining light on the relationship between gender and party registration among new voters amid an election hinging on a number of political issues related to gender, such as abortion. (Some states also offer a “nonbinary” or “other” option on their voter registration forms, with a small number of voters using that so far.)

Female Democrats dominate new voter numbers from Pennsylvania

Let’s start in Pennsylvania — not only because it is thought to be the closest state according to the polls, but also because the number of new voters who have cast ballots there has already exceeded the 2020 margin. If everyone from 2020 voted for the same candidate again, these new voters would decide the race.

The data out of Pennsylvania shows large differences in the number of votes cast by new voters, both by party registration and by gender. More new voters are registered Democrats than Republicans, and new female voters are driving this partisan gap. The new male voters are only slightly more likely to be Democrats than Republicans, but among new female voters, Democrats outnumber Republicans nearly 2 to 1.

The number of new voters who decide not to officially register with either party complicates the picture, though, as the number of new unaffiliated voters is nearly the same as the gap between the number of new Democrats and new Republicans. That means the unaffiliated vote could either erase or expand the advantage that registered Democrats currently have among new early voters.

The opposite trend in Arizona: Male Republicans lead the way

Turning to Arizona, the opposite pattern emerges. While there are fewer new voters than in Pennsylvania — in part because early voting in Arizona started later — the 2020 margin in Arizona was also much smaller: only 10,457 votes.

Already, the number of new voters (86,231 as of Tuesday) is more than eight times the Biden-Trump margin in 2020 in Arizona. And the biggest share of that group of new voters in Arizona so far are male Republicans.

New female voters are also slightly more likely to be registered Republicans than Democrats in the state, unlike in Pennsylvania. But the Republican advantage in new Arizona voters so far is being driven largely by male voters.

Still, once again, the number of new voters who chose not to affiliate with either party is considerable, and how they choose to vote could easily change the apparent Republican registration advantage among new voters who are voting early.

A mixed picture in the other swing states

Looking at the remaining five swing states reveals a variety of patterns — and no clear takeaway.

In Michigan, there is a huge apparent difference in the behavior of new male and female voters, though conclusions in Michigan are complicated by the fact that there’s no registration by party there and the difficulty of predicting partisanship of Michigan voters without that data, which has seen large errors in the past. But based on those estimates, predicted Democratic women are slightly outpacing predicted Republican women among new voters, while predicted Republican men are nearly doubling the number of new predicted Democratic men.

Wisconsin, like Michigan, also appears to suggest a strong connection between gender and partisanship among the new voters — with new female voters breaking for Democrats and new male voters breaking slightly for Republicans. However, the number of new voters who are predicted to be unaffiliated calls for exercising tremendous caution in trying to read too much into those estimates.

In the other states with actual party registration data — North Carolina and Nevada — there’s a new pattern: Voters unaffiliated with either party are the biggest group of new voters so far, among both men and women. How those independents vote is obviously critical and also unknown — again highlighting the difficulty of reaching strong conclusions using early voting data.

What the Early Voting Data Shows About New Voters — A Group that Could Swing the Election_1

That said, one thing is clear: These voters could be decisive, since the number of votes cast by new 2024 voters already exceeds the margin in many of the closest states in 2020. They are entering a polarized electorate and an election many expect to be close. And except in a couple of states where the available data starts to suggest a broader story, the number of new voters who are unaffiliated — or the lack of party registration in key states — make it hard to know exactly how the early voting will translate into this year’s election results.

In such cases, staring into the entrails of aggregate early voting reports in the hopes of extracting a prediction about what is to come seems like an exercise in futility. Our professional recommendation: Go take a walk and enjoy the fall weather instead.

Source: yahoo finance

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TD Securities

Economic

Personal income grew 0.3% month-on-month (m/m) in September, up slightly from July’s 0.2% gain and bang on market expectations.

Accounting for inflation and taxes, real personal disposable income grew a modest 0.1% for a fourth consecutive month.

Consumer spending was robust in September. Personal consumption expenditures grew by 0.5% m/m, above the market expectations for 0.4% growth. This was also a marked acceleration relative to the 0.3% pace in August.

Stripping out inflation, spending rose 0.4% m/m in real terms – an improvement relative to the 0.2% gain recorded in August. A gain in spending volumes was supported by much higher outlays on goods, which rose by 0.7% m/m, while services increased by 0.2% m/m.

The Fed’s preferred inflation metric, the core PCE price deflator, rose 0.3% m/m – ahead of the market expectations for 0.2% increase. Year-over-year, core PCE inflation came in at 2.7%, unchanged for the third consecutive month.

Consumers set aside less for the rainy day. The personal savings rate declined to 4.6% in September (down from 4.8% in August and 4.9% in July).

Key Implications

Today’s monthly income and spending data showed that consumers have ended Q3 on a strong note. Indeed, consumer spending has been remarkably resilient in the last two quarters. As we noted in our recent report, there are several reasons consumers may have more momentum than previously anticipated, such as a notable upgrade to personal income in H1-2024 and a larger cushion of savings.

Looking ahead to the fourth quarter, monthly spending data is expected to be distorted by the impacts of Hurricanes Helene and Milton, with clean-up and rebuilding efforts likely to boost spending in the short term. However, as these effects subside, we expect spending to moderate closer to a 2% pace throughout 2025, as the economy remains on track for a soft landing. With inflationary pressures easing and the labor market gradually softening, we expect the Fed to cut the fed funds rate by 25 basis points next week.

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Daily News

Economic

[Quick Facts]

1. Japan's factory activity declines accelerate as demand sags.

2. Oil gains extend after settlement on reports of Iran preparing Israel attack.

3. UK's Reeves seeks to calm markets after post-budget selloff.

4. Investors take money off the table ahead of the U.S. election.

5. Canada's Q3 economic growth may fall short of expectations.

[News Details]

Japan's factory activity declines accelerate as demand sags

The final au Jibun Bank Japan manufacturing purchasing managers' index (PMI) fell to 49.2 in October from 49.7 in September. It was slightly up from 49.0 reported in the flash reading. But the index remained below the 50.0 threshold that separates growth from contraction for the fourth straight month. Declines in domestic and global demand, particularly in the semiconductor and automotive sectors, dampened sales and output.

Due to weak new orders and excess inventory, the production sub-index continued to decline, reaching its lowest level since April. The new orders index also dropped, remaining below the 50.0 mark for the 17th consecutive month, indicating further declines in sales due to weak demand in the automotive and semiconductor sectors. Companies believe that subdued domestic and international demand is the reason for the deterioration in new orders.

Oil gains extend after settlement on reports of Iran preparing Israel attack

News website Axios reported on Thursday, citing two anonymous Israeli sources, that Israeli intelligence suggests Iran is preparing to launch an attack on Israel from Iraq in the coming days, possibly before the U.S. election on November 5. The anticipated attack would reportedly involve numerous drones and ballistic missiles launched from within Iraq.

The report indicates that using pro-Iranian militia groups in Iraq could be Tehran's way of avoiding further Israeli strikes on strategic targets within Iran. This news extended oil price gains on Thursday after settlement, with prices rising over $1. Additionally, the possibility of OPEC+ delaying its planned oil production increase also supported oil prices on Thursday. As the month draws to a close, multiple international events could lead to volatility in the oil market in early November.

UK's Reeves seeks to calm markets after post-budget selloff

After the budget proposal caused a sharp drop in the price of UK government bonds, Chancellor of the Exchequer Rachel Reeves worked to calm the financial markets, emphasizing that the "top priority" of the Labour government is "economic and fiscal stability."

"We have more headroom than the previous government left us, and that is important," Reeves said Thursday in a Bloomberg TV interview. "We have now put our public finances on a stable and solid trajectory." She also mentioned the support from the International Monetary Fund (IMF) for the UK's plans. However, the markets reacted negatively to the debt scale implied in Reeves' budget proposal on Wednesday. Her budget includes an annual increase of £70 billion in public spending and an additional £100 billion in capital project investment.

Official forecasts indicate that the UK will require an additional £142 billion in borrowing over the next five years. Since many investors view this as an inflationary budget, there is a widespread expectation that the Bank of England will keep interest rates high for a longer period.

Investors take money off the table ahead of the U.S. election

As of Thursday's close, gold plummeted by 1.8% to $2,738.30 per ounce, marking the largest single-day drop since July 25, though it remains the sixth-highest closing price of the year.

The main reason was strong U.S. data, including initial jobless claims, which dampened expectations for a rate cut by the Federal Reserve. Additionally, "good progress" was reported in ceasefire negotiations between Israel and Lebanon's Hezbollah, which reduced safe-haven demand. Also, some bulls took profits ahead of the non-farm payroll data and the U.S. election.

Gold prices still rose by 4.15% in October, marking the fourth consecutive monthly increase. Similarly, bearish "engulfing" top signals occurred on October 23, September 27, and August 22, but gold prices continued their upward trend, repeatedly hitting record highs, so bears should remain cautious about potential high-level fluctuations.

At present, gold is influenced by various factors, making it difficult to determine if this significant pullback is a brief episode in the rally or a deeper, multi-week consolidation, as many elements could impact the future direction of gold prices.

Canada's Q3 economic growth may fall short of expectations

Canada's GDP remained unchanged in August compared to the previous month, while it is projected to grow by 0.3% in September, suggesting that the Canadian economy may have fallen short of the central bank's growth expectations for the third quarter. A 1.2% contraction in manufacturing in August was the largest drag on the economy, partly due to restructuring and maintenance activities at several auto plants.

The Bank of Canada's preliminary estimate indicates a 0.3% GDP growth in September, driven by gains in the finance and insurance, construction, and retail trade sectors. Meanwhile, the GDP growth rate for July was revised down from the initially reported 0.2% to 0.1%.

When converting the monthly GDP data to an annualized growth rate, the third quarter shows a 1.0% growth, whereas the central bank had projected growth to slow to 1.5% from July to September before picking up in the fourth quarter.

In addition to manufacturing, the transportation and warehousing sectors also weighed on the economy in August. Rail transportation, which declined due to strikes at Canada's two largest rail companies, was the primary factor in the transportation sector's drop. Overall, Canada's goods-producing sector contracted by 0.4%, while the service sector grew by 0.1%.

[Today's Focus]

UTC+8 15:30: Switzerland CPI MoM (Oct)

UTC+8 20:30: U.S. Non-Farm Payrolls (Oct)

UTC+8 22:00: U.S. ISM Manufacturing PMI (Oct)

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Gilt Yields Spike As Budget Jitters Mount

WHERE WE STAND

LOOK AHEAD

Easing Inflation in Australia How Lower Prices Could Lead to Rate Cuts Soon

Trump Sues CBS News; Network Says Suit "Completely without Merit"

Source: yahoo finance

Three Reasons to Stay Bearish on Gilts After the UK Autumn Budget

Rising Inflationary Pressure

Impact on Gilt Issuance

Slower Growth and Rising Concerns Over Fiscal Sustainability:

Key Technical Levels to Watch for 10-Year Gilt Yields

Did you know that Gilts can be shorted though the purchase of the following UCIT ETFS?

What the Early Voting Data Shows About New Voters — A Group that Could Swing the Election

Female Democrats dominate new voter numbers from Pennsylvania

The opposite trend in Arizona: Male Republicans lead the way

A mixed picture in the other swing states

Source: yahoo finance

U.S. Personal Income And Spending Growth Picks Up In September

Key Implications

November 1st Financial News

[Quick Facts]

[News Details]

[Today's Focus]

Risk Disclosure