From Marc to Market:
There are two impulses today. First, defying expectations, Moody’s did not downgrade its assessment of French credit, which remains above S&P and Fitch’s ratings. With a show of force by the government, French protests were less violent. French bonds have rallied and the peripheral premium has narrowed. Yet, the euro has found little meaningful traction. Second, and also defying expectations, Brazilian President Lula appears to have beaten Bolsonaro in a nailbiter. In the futures market the Brazilian real has been sold. Bonds and equities are expected to follow suit.
The US dollar is mostly firmer to start the new week, which features the FOMC meeting, the first estimate of Q3 GDP, and a series of big tech earnings. Beijing, seemingly undeterred, set the dollar’s reference rate at a new high since mid-2022. Four other G10 central banks meet this week and the market is most confident that the Reserve Bank of New Zealand and the Bank of Canada are most likely to hike, while the Fed, ECB, and BOJ are widely expected to standpat, but hike again in December....
....MUCH MORE
