Last night, Kamala Harris and Donald Trump went head-to-head in their first presidential debate—the first since June, when Biden's performance ultimately led to him bowing out of the race. After the debate, betting markets shifted in Harris' favor. Riskier assets slipped throughout the event—bitcoin was down 1.5% at one point—while U.S. equity futures and a dollar gauge edged down, and Treasuries were little changed.
Later today, at 13:30 in London, we have a U.S. CPI print, with the headline expected to be 2.5%. Much of today's trading and price action will either be in preparation for or reacting to that data. Futures for U.S. equities have dropped, and Treasury yields have fallen in the run-up. Uncertainty will likely persist until next week’s anticipated rate cut—34 bps are priced into the futures curve, so the market is looking for any clues as to whether it will be a 25 or 50 bp cut.
Elsewhere, a BOJ policymaker has announced that the BOJ will continue to adjust the degree of easing, which has seen USD/JPY move to trade at 141.30—the yen’s strongest level since January. The market now believes the BOJ may hike rates earlier and faster.
In commodities, crude oil has fallen by almost a fifth so far this quarter, driven by concerns that slowing growth in the U.S. and China will reduce demand, while supplies continue to burgeon.
As mentioned, keep an eye out for the U.S. CPI print at 13:30 London time—that's the only significant data point of the day!
