The US futures, dollar, and treasury yields are all lower after the Presidential Debate and pre-CPI but off session lows. The S&P futures are down 0.1%, recovering from a loss of 0.5% earlier. Nasdaq futures were down 0.2% with Mag7 and Semis lower as Energy stocks rebound from yesterday's drubbing. Treasuries had minimal moves during the debate, but yields are 3-4bps lower now, hitting fresh 2024 lows. The USD is lower and commodities are higher led by Energy, Ags, and Precious, with oil rebounding from Tuesday's rout. The macro data focus today is on the CPI print and the 10Y bond auction.
Betting markets indicate a Harris victory in the debate as her odds to win had her leading Trump by 1-point as the debate started to now 11-points this morning. Her odds of winning the election increased on the betting website PredictIt to 57%, compared with 53% before the debate. The reaction in assets confirmed this shift in sentiment: the dollar is weaker and US domestic equities are broadly lower. Stocks in renewable energy producers rose, gaining strength from the debate and Harris’ advocacy of green energy. Meanwhile, Trump’s support of the crypto sector and the Democrat's endless feud, fueled a pullback in the price of Bitcoin.
The threat of far-reaching tariffs is shaping up to be among the biggest risks to markets. While Trump placed tariffs on more than $300 billion of Chinese goods as president and sought to block countries from buying Huawei Technologies Co. equipment for 5G networks, Harris’ stance is lesser known after she joined the ticket late.
In premarket trading, GameStop tumbled 10% after the video-game retailer reported second-quarter net sales that disappointed. Baird said the results demonstrated the ongoing challenges to the company’s retail business model. Dave & Buster’s jumped 13% after the restaurant chain reported second-quarter profit that came in ahead of estimates. Analysts highlighted the company’s margin performance.
Worries over a global slowdown in growth have resurfaced with oil trading below $70 and global bond yields retreating to a two-year low this week. Investors’ attention is on the US consumer price index due later Wednesday, expected to show another month of muted increases, and the Fed policy meeting next week.
As discussed in our preview, the CPI report later will probably show US consumer prices climbed in August at the slowest pace in more than three years, but the question for policymakers is whether the data warrants an outsized interest rate cut of 50 basis points, or whether a quarter-point interest-rate cut is enough. Traders are fully pricing a smaller cut, while still betting on at least one 50 basis-point Fed rate cut this year — just probably not before the Nov. 5 election.
European stocks tick higher as investors await sensitive US inflation data due later on Wednesday for clues about the Federal Reserve’s near-term policy moves. The Stoxx600 was up 0.6%, as mining stocks and retailers outperform, with Zara-owner Inditex rallying after reporting rising sales in the third quarter. Telecoms and health care stocks lag.
Asian equities fell for the third successive session as weakness in Japan deepened amid a strengthening yen. Chinese stocks resumed their decline. The MSCI Asia Pacific Index fell as much as 0.7%, with Toyota Motor, Samsung Electronics and Commonwealth Bank of Australia among the biggest drags. Chinese shares in Hong Kong and the mainland closed lower as investors continued to fret over the outlook for Asia’s largest economy and as sentiment remained muted around the US presidential debate. In Japan, the Topix index fell for a sixth straight day, the longest streak since July 2023, as concerns over the impact of a stronger local currency on exporters’ earnings lingered. Other major markets including Australia, South Korea and Taiwan also closed lower.
In FX, the Bloomberg dollar spot index falls 0.2%. NZD and GBP are the weakest performers in G-10 FX. The yen extended gains, partly spurred by hawkish commentary from a BOJ official, boosting the yen to as high as 140.71 per dollar before it pared some gains to around the 141 level. Swiss franc see haven demand ahead of US CPI data.
In rates, treasuries are slightly richer across the curve with gains led by long-end after benchmark yields touched new YTD lows during European morning. Long-end yields remain richer by ~2bp after falling as much as 4bp, marginally outperforming shorter maturities; 10-year at 3.625% outperforms bunds in the sector while trailing gilts. $39b 10-year reopening at 1pm New York time is poised to draw lowest yield since May 2023; WI yield is ~33.5bp richer than last month’s, which tailed by 3.1bp in a soft reception. Gilts outperform bunds and Treasuries across the curve.
In commodities, west Texas Intermediate crude rebounded on Wednesday after plummeting as much as 5% in its previous session. WTI crude oil futures are up more than 2% from Tuesday’s lowest closing level since December 2021. Crude has tumbled by almost a fifth so far this quarter on concerns that slowing growth in the US and China, the leading consumers, will crimp demand at a time of robust and expanding supplies. Spot gold rises roughly $9 to trade near $2,525/oz. Spot silver gains 1.4% near $29. Bitcoin drops.
Looking at today's calendar, the August CPI data are due at 8:30am New York time. The session also includes 10-year note reopening, following strong demand for Tuesday’s 3-year note auction.
## Bottom Line
The US futures, dollar, and treasury yields all seem to be lower after the Presidential Debate. The betting markets indicate a Harris victory in the debate as her odds to win had her leading
The US futures, dollar, and treasury yields are all lower after the Presidential Debate and pre-CPI but off session lows. The S&P futures are down 0.1%, recovering from a loss of 0.5% earlier. Nasdaq futures were down 0.2% with Mag7 and Semis lower as Energy stocks rebound from yesterday's drubbing. Treasuries had minimal moves during the debate, but yields are 3-4bps lower now, hitting fresh 2024 lows. The USD is lower and commodities are higher led by Energy, Ags, and Precious, with oil rebounding from Tuesday's rout. The macro data focus today is on the CPI print and the 10Y bond auction.
Betting markets indicate a Harris victory in the debate as her odds to win had her leading Trump by 1-point as the debate started to now 11-points this morning. Her odds of winning the election increased on the betting website PredictIt to 57%, compared with 53% before the debate. The reaction in assets confirmed this shift in sentiment: the dollar is weaker and US domestic equities are broadly lower. Stocks in renewable energy producers rose, gaining strength from the debate and Harris’ advocacy of green energy. Meanwhile, Trump’s support of the crypto sector and the Democrat's endless feud, fueled a pullback in the price of Bitcoin.
The threat of far-reaching tariffs is shaping up to be among the biggest risks to markets. While Trump placed tariffs on more than $300 billion of Chinese goods as president and sought to block countries from buying Huawei Technologies Co. equipment for 5G networks, Harris’ stance is lesser known after she joined the ticket late.
In premarket trading, GameStop tumbled 10% after the video-game retailer reported second-quarter net sales that disappointed. Baird said the results demonstrated the ongoing challenges to the company’s retail business model. Dave & Buster’s jumped 13% after the restaurant chain reported second-quarter profit that came in ahead of estimates. Analysts highlighted the company’s margin performance.
Worries over a global slowdown in growth have resurfaced with oil trading below $70 and global bond yields retreating to a two-year low this week. Investors’ attention is on the US consumer price index due later Wednesday, expected to show another month of muted increases, and the Fed policy meeting next week.
As discussed in our preview, the CPI report later will probably show US consumer prices climbed in August at the slowest pace in more than three years, but the question for policymakers is whether the data warrants an outsized interest rate cut of 50 basis points, or whether a quarter-point interest-rate cut is enough. Traders are fully pricing a smaller cut, while still betting on at least one 50 basis-point Fed rate cut this year — just probably not before the Nov. 5 election.
European stocks tick higher as investors await sensitive US inflation data due later on Wednesday for clues about the Federal Reserve’s near-term policy moves. The Stoxx600 was up 0.6%, as mining stocks and retailers outperform, with Zara-owner Inditex rallying after reporting rising sales in the third quarter. Telecoms and health care stocks lag.
Asian equities fell for the third successive session as weakness in Japan deepened amid a strengthening yen. Chinese stocks resumed their decline. The MSCI Asia Pacific Index fell as much as 0.7%, with Toyota Motor, Samsung Electronics and Commonwealth Bank of Australia among the biggest drags. Chinese shares in Hong Kong and the mainland closed lower as investors continued to fret over the outlook for Asia’s largest economy and as sentiment remained muted around the US presidential debate. In Japan, the Topix index fell for a sixth straight day, the longest streak since July 2023, as concerns over the impact of a stronger local currency on exporters’ earnings lingered. Other major markets including Australia, South Korea and Taiwan also closed lower.
In FX, the Bloomberg dollar spot index falls 0.2%. NZD and GBP are the weakest performers in G-10 FX. The yen extended gains, partly spurred by hawkish commentary from a BOJ official, boosting the yen to as high as 140.71 per dollar before it pared some gains to around the 141 level. Swiss franc see haven demand ahead of US CPI data.
In rates, treasuries are slightly richer across the curve with gains led by long-end after benchmark yields touched new YTD lows during European morning. Long-end yields remain richer by ~2bp after falling as much as 4bp, marginally outperforming shorter maturities; 10-year at 3.625% outperforms bunds in the sector while trailing gilts. $39b 10-year reopening at 1pm New York time is poised to draw lowest yield since May 2023; WI yield is ~33.5bp richer than last month’s, which tailed by 3.1bp in a soft reception. Gilts outperform bunds and Treasuries across the curve.
In commodities, west Texas Intermediate crude rebounded on Wednesday after plummeting as much as 5% in its previous session. WTI crude oil futures are up more than 2% from Tuesday’s lowest closing level since December 2021. Crude has tumbled by almost a fifth so far this quarter on concerns that slowing growth in the US and China, the leading consumers, will crimp demand at a time of robust and expanding supplies. Spot gold rises roughly $9 to trade near $2,525/oz. Spot silver gains 1.4% near $29. Bitcoin drops.
Looking at today's calendar, the August CPI data are due at 8:30am New York time. The session also includes 10-year note reopening, following strong demand for Tuesday’s 3-year note auction.
## Bottom Line
The US futures, dollar, and treasury yields all seem to be lower after the Presidential Debate. The betting markets indicate a Harris victory in the debate as her odds to win had her leading
