US: [RPT] MNI CPI Preview - Can Cars Drive A Core CPI Slowdown?
- Re-sending ahead of US CPI at 0830ET.
- Core CPI inflation is seen slowing slightly to 0.5% M/M in October after surprise persistence at 0.58% in Sept. The analyst survey is skewed slightly lower although the Cleveland Fed Nowcast implies upside risk.
- A similar 0.1-0.2pt beat to last month could see a delay in the Fed’s anticipated downshift to 50bp hikes into 2023 or augur a longer string of hikes, either way pushing the terminal rate higher still and driving a sharp flattening in the Treasury curve.
FULL REPORT: https://marketnews.com/mni-us-cpi-preview-can-cars-drive-a-core-cpi-slowdown
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RUSSIA: TURKEY: Putin-Erdogan Meeting Moved To Thursday-Kremlin
Wires carrying comments from the Kremlin stating that the meeting between Russian President Vladimir Putin and his Turkish counterpart Recep Tayyip Erdogan in Astana, Kazakhstan will now take place on Thursday 13 October, rather than the originally-touted Wednesday 12 October.
- Kremlin simply stated the two would discuss 'Ukraine and bilateral relations', but there are expectations that Erdogan could seek to facilitate peace talks between Moscow and Kyiv.
- Turkey has already proved instrumental in acting as a sort of mediator between the two, having alongside the UN brokered the Black Sea grain deal.
- Kremlin on expectations for today's G7 summit: 'It is clear and predictable that the conflict will continue.'
- Kremlin on US anti-air system supplies to Ukraine: 'This will prolong the conflict and make it more painful for the Ukrainian side, but it will not change our objectives'.
OUTLOOK: What to Watch: Fed Mester, Tsy Sec Yellen, 3Y Sale, Q3 Earnings
Tsys trading firmer, near recent overnight highs, decent volumes as markets return from extended weekend holidays: TYZ2>435k, USZ2>65k.
- Cleveland Fed Mester scheduled to speak at the Economics Club of NY at 1200ET while Tsy Sec Yellen will be interviewed on CNBC at 1500ET.
- Data was limited to NFIB Small Business Optimism reported at 92.1 earlier, focus on Wednesday's Sep FOMC minutes release (1400ET) and CPI at 0830ET Thursday.
- Incoming corporate bond issuance should remain muted as Q3 equity earnings kicks off with PepsiCo (PEP) tomorrow before the open, Walgreens Boots (WBA), Dominos (DPZ), Progressive (PGR), Delta (DAL) and Blackrock (BLK) early Wednesday.
- Treasury auctions today:
- $57B 13W, $45B 26W bill auctions at 1130ET
- $40B 3Y Note auction (91282CFP1) at 1300ET
BUNDS: Looking at German 10yr Yield
Looking at German 10yr Yield reference 136.29.
- 2.400% = 135.37
- 2.450% = 134.79
- 2.500% = 134.21
- 2.557% = 133.55 (61.8% retrace 2008/2020 fall)
Bund has so far found some receiving interest after testing a 11yr high Yield yesterday and today.
Resistance in Future is still seen towards 136.98 initially.
Chart source: MNI/Bloomberg
