SECURITY: LEAVITT: TRUMP SUPPORTS WITKOFF, RUBIO PLAN

• Stocks remain mixed late Tuesday, the DJIA outperforming after managing to mark a new record high of 47,125.66 in the first half. A couple social media posts by President Trump tempered risk sentiment, however.
• Stocks whipsawed off early session highs after Pres Trump social media post warning retribution "if Hamas continues to act badly, in violation of their agreement with us." Stocks reacted negatively a second half post by President Trump that while he anticipates having "a good deal with Xi" the meeting in S Korea at end of the month may NOT happen.
• While Treasury futures drift near highs (10Y yield fell to 3.9455%), equities have managed to stay off early lows. A noticeable exception: mining stocks underperformed after Gold fell sharply (appr -240.0 at 1050ET to 4115.0, appr -6.3% from session highs).
• Currently, the DJIA trades up 280.59 points (0.6%) at 46,988.65, S&P E-Minis up 6.5 points (0.1%) at 6,781, Nasdaq down 16.9 points (-0.1%) at 22,974.59.
• In addition to Materials and Utility Services sector share underperformed: Newmont Corp -8.97%, Philip Morris Int -5.45%, Albemarle Corp -3.93%, Constellation Energy -3.62% Vistra Corp -3.19% and NRG Energy -2.23.
• On the positive side, Consumer Discretionary and Industrials sector shares outperformed in the first half, General Motors surged +15.5% after reporting better than expected Q3 earnings, Lululemon Athletica +6.08%, Ford Motor +5.30%, CarMax +4.58% and Aptiv +3.86%..
• Supporting the Industrials sector: RTX +8.42%, 3M Co +6.09%, Carrier Global +3.68%, Builders FirstSource +3.44% and Stanley Black & Decker +3.29%.
• Reporting earnings after the close: Netflix, Capital One Financial, Mattel, Western Alliance Bancorp (in the hot seat last week after announcing bad loan losses), Omnicom, EQY and Texas Instruments.

• RES 4: 154.39 76.4% retracement of the Jan 10 - Apr 22 bear leg
• RES 3: 153.82 1.618 proj of the Sep 17 - 26 - Oct 1 price swing
• RES 2: 152.61/153.27 High Oct 14 / 10 and the bull trigger   
• RES 1: 152.17 High Oct 21 
• PRICE: 151.76 @ 15:41 BST Oct 21
• SUP 1: 149.38 Low Oct 17
• SUP 2: 148.94 50-day EMA   
• SUP 3: 147.82 High Oct 3  
• SUP 4: 147.14 Trendline support drawn from the Apr 22 low 

The recovery from last Friday’s low in USDJPY is beginning to highlight a stronger bullish signal. The pair has found support below the 20-day EMA and note that Friday’s price pattern is a hammer candle formation. If correct, the pattern signals the end of a corrective pullback that started Oct 10, and  highlights the fact that support at the 50-day EMA, at 148.94, remains intact. The bull trigger is at 153.27, the Oct 10 high. The 50-day EMA is key support.   

Continuing through Canadian analyst reviews of CPI (the below all expect a 25bp cut on Oct 29) below. MNI's BOC meeting preview will be published on Monday October 27.

• Desjardins: "While the higher‑than‑expected pace of inflation in September may complicate the Bank of Canada’s messaging, a good part of the acceleration in the month can be explained by events a year ago as opposed to what is happening today. As such, we think that headline inflation could comfortably return to around 2% in the fourth quarter, supported by the recent reduction in retaliatory tariffs on goods imports from the US. When combined with the Bank’s downbeat business and consumer surveys, a still elevated unemployment rate and an economy that looks like it might barely manage to escape a recession in Q3, we remain of the view that the BoC will cut the policy rate by another 25 basis points at its upcoming meeting."
• National: "Deputy Governor Mendez's recent speech clearly indicated that the Bank of Canada had made another U-turn in regard to their core measures by stating that CPI-Trim and CPI-Median should no longer be prioritized. For this reason, we will now track these two measures, as well as inflation excluding food and energy (CPIXFET) and the CPIX (the Bank of Canada's former core inflation measure).Taking the average of these four measures, the price increase in September was only 0.24%, which is uncomfortable for the Bank of Canada but much less worrying than the increase in the total index. Over three months, the annualized rate of increase is 2.3%, only a few tenths of a percentage point above the target... As for inflationary pressures, there was no indication in the BOS that businesses felt they had pricing power. In conclusion, we continue to favor a rate cut at the next decision, and the need for further accommodation will depend on the federal budget and a potential de-escalation of trade tensions with the United States."
• RBC: "Inflation continues to run above the BoC's 2% target, but that was also true when the central bank cut the overnight rate in September. The breadth of inflationary pressure did narrow slightly by our count in September. A higher unemployment rate, lower business inflation expectations in the BoC's own Business Outlook Survey, and the removal of most Canadian counter-tariffs, should reinforce the BoC's view that upside inflation risks have eased - and our base-case assumes one more reduction in the overnight rate next week in October...We expect cutting beyond that, into outright stimulative levels of interest rates, will be more difficult with inflation still sticky at an above-target rate and fiscal policy potentially ramping up as a support after the federal budget in early November."
• Scotiabank: "Canadian core inflation measures remain good enough for the BoC to cut next week when properly evaluated in terms of month-over-month trends and breadth...Key is that each of the main core measures of inflation were well within the flexible 1–3% headline inflation target range and were likely overstated by mechanistic seasonal adjustments that may not be appropriate...I think the BoC will work the flexible inflation target range that Macklem keeps emphasizing and deliver easing next Wednesday but with a hawkish sounding and noncommittal feel."
• TD: "Overall, we do not think the September CPI report will be enough to shift the Bank of Canada's assessment on the risks around inflation, and we continue to look for them to deliver another 25bp cut in October. 3m rates of core inflation were more stable between August and September, and inflation pressure were less broad based in the September CPI report. The Q3 BOS also noted that firms are having a more difficult time passing down higher input costs, which should make it easier to look through the stronger performance for CPI-trim/median."