So of course Treasuries rallied, with 10s down 9bp and 2s 10bp in the wake of the conference and a bit more in Asia. Next targets are the Jan lows at 3.321% and 4.04%. Fed funds partied by pricing in more rate cuts with Fed funds seen at 4.40% by end 2023 and 3.0% by the close of 2024. The euro jumped to a 10-month peak of $1.1034 and could go further if ECB chief Christine Lagarde sounds as hawkish as everyone seems to expect after today's policy meeting. The market is almost fully priced for a hike of 50bp and the promise of more to come, though it was notable that Euribor rallied overnight to imply deeper cuts next year. The ECB is also set to reveal how exactly it plans to reduce the multi-trillion euro stock of bonds on its balance sheet. Across the Channel, the Bank of England is also seen hiking 50bp today, though with some outside risk of 25bp. The following media conference by Governor Andrew Bailey and colleagues is likely to be a tough one, assuming they can even get to it given all the strikes.
The IMF, and many others, are predicting recession but inflation is at 10.5% and wage growth running red hot - good luck squaring that circle. For Wall Street, it's a massive earnings day and Meta helped overnight by announcing a $40 billion buy-back that sent its shares up 18%. Healthcare companies BristolMeyers-Squibb Co , Eli Lilly and Co and Merck & Co are due to report before trading commences on Wall Street.
The heavy-hitting trifecta of Apple Inc , Amazon.com and Alphabet Inc are after the bell. Key developments that could influence markets on Thursday: - BoE rate decision is at 1200 GMT and the ECB at 1315 GMT. BoE Gov Bailey speaks to reporters at 1230 GMT and ECB President Lagarde at 1345 GMT
(Wayne Cole)
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