US EARLY MORNING: US index futures are lower as yields rise ahead of Wed's FOMC, where a 75bps rate rise is expected

NOTE: Daylight saving time in the UK has now ended, and the time differential between London and New York will be four hours this week. Daylight saving will end in the US on Sunday 6th November, upon which the usual five-hour time differential will be restored.

SNAPSHOT: US index futures are starting the week in the red, with the tech heavy Nasdaq-100 leading the losses (-0.7%), as US yields rise 2-6bps across the curve, with much of the underperformance in the front-end as the Treasury curve braces for a 75bps rate rise from the FOMC on Wednesday. The Dollar Index is trading firmer, while crude futures are trading around a buck or so in the red. Political/Geopolitical themes are being noted this morning: the FT reports that new polling over the weekend showed Republicans hold an edge over Democrats with just over a week before midterm elections on Nov. 8th, with voters focussed on high inflation and the risks of recession. On the ags front, Russia has pulled out of the UN-brokered grains deal, although some geopolitical analysts note that the Russian commentary is holding open the prospect for talks with the US. Elsewhere, the US seems to be coaxing Europe to consider export controls on China, drawing lessons from the tactics used on Russia, though Europeans don’t seem inclined yet.

DAY AHEAD: Flash Eurozone CPI data for October is today’s main data release (consensus looks for broadly unchanged Y/Y rates). Q3 GDP data from the bloc is also on the slate, and is expected to show no quarterly growth. ECB’s chief economist Lane will deliver remarks in the morning. The highlight of the US day is the Chicago PMI release. Central banking events later in the week are being eyed (RBA, FOMC, Norges, BoE), while we also get monthly US jobs data and ISM surveys. Our full Day Ahead can be accessed here, our week ahead preview can be accessed here. Earnings-wise, there are still a few notable names to report; this week we get SYK today; On Tuesday, LLY, PFE, UBER, ABNB, AMD; On Wednesday, EL, CVS, HUM; On Thursday, CI, REGN, COP, MRNA, AMGN, SBUX, PYPL; and on Friday, DUK, D; our full weekly earnings expectations can be accessed here.

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31 Oct 2022 - 08:30- Research Sheet- Source: Newsquawk

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