Morning Update – 10/10/16 – by Arjun Lakhanpal

October 10, 2016 by

Morning all.. Wall St closed lower eventually after a choppy post-payrolls session with the S&P down 0.33% having rallied into the close but fears over the Trump/Clinton debate evident. Asia has been quiet with Japan and others in the region closed today but little movement since the debate on Sunday night in the US in most asset classes and Clinton was seen as winning the debate. It is a US holiday today with bond markets closed but equity markets are open later but it has been yields driving a lot of the moves in FX recently so we may be in for a quiet one today. The weekend has been very heavy for news. ECB speakers continued to attempt to shift focus from discussion around tapering (Draghi: “it’s a mistake to speculate on mon policy tightening”; Constancio: “we haven’t started talking about how to end the QE program”). On Brexit, the FT ran a story saying that Germany is considering tweaking its labour laws to encourage banks to move from London to Frankfurt and the German DIHK said that GBP weakness is making the impact of Brexit on German exports even worse with German businesses seeing investing in the UK as less attractive. Elsewhere, the DB CEO was not able to reach a deal with the DoJ in his meeting in Washington this weekend and talks are continuing. Broader G10 FX traded with a more risk-on tone with CAD and AUD relatively outperforming versus the USD. Not much data today with the US closed. This morning we have French Business sentiment and Swedish Household consumption along with Italian IP.. Good luck.