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Fed on hold but tilting hawkish

The backdrop into today is a Fed that paused with a hawkish minority. The October 28 decision held the target range at 3.75-4.00% by a 10-2 vote, with Cook and Hammack both preferring a 25 basis point increase, and the statement described strong growth alongside elevated inflation. Dallas Fed's Lorie Logan went further in headlines carried here, saying the Fed needs at least two more hikes and that skipping a meeting does not change the policy destination. The data behind that: BEA's advance estimate put Q3 real GDP at 3.4% annualized against 2.2% in Q2, with real final sales to private domestic purchasers up 4.9%, while the September income and spending report showed real consumption up less than 0.1% on the month and real disposable income down 0.3%. Headline PCE ran 0.5% month-on-month and 3.6% year-on-year, core 0.3% and 3.1%. Atlanta Fed GDPNow printed 3.3% against 3.2% consensus. Chicago PMI came in at 55.3, below the 55.8 consensus and down from 58.8. Employment cost index was 0.8%, in line, with wages at 0.70% versus 0.90% prior. Daly and Barkin speak, and the October ISM manufacturing print lands today.

Equities after Friday's drop

Friday was ugly. The S&P 500 closed down 1.82% at 7,580 and the Dow fell 1.09% to 51,770, with the damage concentrated in chips and hardware: Intel down 28.58%, SanDisk down 13.47%, Datadog down 11.50%, Qualcomm down 11.12%, Astera down 10.93%, AMD down 10.88%, Dell down 10.77%, Micron down 5.30% and Nvidia down 4.22%. Early Monday, futures were pointing the other way, with US 500 up 0.33% to 0.38%, US Tech 100 up roughly 0.56% to 0.64% and US 30 up about 0.4%. VIX sat near 19.4-19.6. One technical piece here tracks the S&P's weekly structure and notes this is the thirteenth week inside a 7,508-7,845 range, with three consecutive red weekly closes at 7,659, 7,624 and 7,580, putting the index right on the September low at 7,508. The writer flags 7,775 and 7,500 as his break levels and says there's no edge in between. A separate Nasdaq piece argues the AI narrative is cracking, citing Fed attention to data centre power demand, a Kioxia profit warning and cash parking ahead of the election. These are individual traders' published views, not house calls.

Oil slides on Iran talks

Crude is the single biggest macro mover this morning. Brent was down roughly 4.0% to 4.3% around $108.37-$108.88 and WTI down about 4.2% to 4.5% near $99.45-$99.74, on growing optimism about a diplomatic resolution to the US-Iran conflict, with negotiators meeting in Doha. One headline notes Iran says contacts continue but talks ended without a breakthrough, so this is sentiment rather than a signed deal. Brent had hit multi-month highs last week and remains far above pre-war levels. A separate headline says Goldman raised its oil price forecast on high supply disruption risks. The oil drop lifted risk appetite slightly and weighed on the dollar, with the Dollar Index down 0.27% at 101.473.

BoE hike Thursday is the week's main central bank event

The pound was broadly steady, last around $1.3417 and 83.53 pence to the euro, with attention moving from last week's budget to Thursday's Bank of England decision, expected to be its first hike since August 2023. ING and Goldman both look for 25 basis points to 4% on a 7-2 vote, with Dhingra and Taylor dissenting. ING's James Smith frames it as a risk-management move rather than one the data demands: private-sector wage growth is 3.4% and second-round effects are scarce, but headline inflation is seen peaking slightly above 4% early next year on a roughly 25% January energy price cap rise, from 3.5% now. Goldman's team under James Moberly sees a near-term peak nearer 4.5% in H1 2027, tracks Q3 growth at 0.7% (three tenths above the BoE's estimate) and expects a second hike to 4.25% in February. Both say market pricing is stretched: money markets price four 25bp hikes by next September, over 100 basis points, which Goldman calls too high and which Chief Economist Huw Pill has signalled looks unlikely. Chancellor John Healey's budget passed without a market reaction in either sterling or gilts. Separately, a headline reports the BoE is weighing raising the cap on high-risk mortgages to five times income.

ECB officials push for more tightening

Slovakia's Peter Kazimir said the ECB will have to raise rates again, and that the question is no longer whether but how much, warning that markets may still be underestimating what's required and that "last week's pause was not a finish line." The ECB held its deposit rate at 2.50% on October 29 on the view that second-round effects haven't taken hold and wage growth is muted. Markets now price between two and three ECB hikes over the next year. Euro zone data was mixed but on the firm side: Q3 GDP at 0.4% against 0.2% expected, unemployment 6.5% versus 6.4% consensus. German CPI was negative on the month at -0.2% against 0.1% expected, French CPI ran hot at 3.4% versus 3.2%, and Italian HICP came in at 1.2% against 0.5%. Separately, ECB Vice President Boris Vujcic said in Dublin that euro zone countries are integrating faster with the US than with each other, with barriers to cross-border equity investment with the US down a quarter since 2014, more than twice the fall within the euro area, and cited research showing firms with mainly domestic shareholders cut investment about 20% more than internationally held peers during COVID.

Gold and silver after the breakdown

Gold broke below $3,900 last week and Kitco headlines attribute the selloff to persistent inflation and elevated rates, with Friday's equity-led liquidation spilling into metals; one notes Wall Street sentiment turned bearish while retail stayed bullish, and another makes the point that falling yields and a weaker dollar failed to stop the decline. Monday's tone is a bounce rather than a reversal: gold futures were up 0.37% to 0.60% around $3,913-$3,922 and silver up roughly 1.7% to 2.1% near $50.11-$50.31, after silver futures fell 5.6% on Friday. There is an unusually heavy cluster of gold chart notes in this list, and the overwhelming majority read the rebound as corrective within a bearish structure, flagging the 3,920-3,950 and 3,980-4,000 zones as the areas to watch and 3,870 as the recent low. CFTC positioning showed gold speculative net longs falling to 186.5K from 199.9K, crude net longs down to 74.3K from 89.3K, and euro net shorts widening to -143.9K from -134.5K while yen net longs jumped to 101.6K from 69.9K.

Rates, dollar and the event calendar

Treasuries were marginally firmer, with the 10-year at 4.907-4.916, the 30-year at 5.274-5.277 and the 3-month at 4.095, while the 10-2 spread widened 15.27% to 31.32. The dollar index is consolidating near 101.4-101.5; one published analysis frames 102.20 as the upside trigger and 101.80 as the downside one into the vote, and another says a bearish dollar view hasn't been confirmed by structure and cites Q3 growth and sticky inflation as the counter-case. Two dates dominate the week: the US midterm congressional elections tomorrow, November 3, and the October employment report on Friday, November 6. Reuters described major currencies as rangebound in early Asian trade ahead of both. Elsewhere in central banking, the BoJ held at 1.25% and flagged progress anchoring inflation near target, with Tokyo CPI consensus at 3.3% versus 2.7% prior, and an RBA preview headline points to an expected 25bp hike as the Australian inflation outlook worsens, alongside a seventh straight monthly fall in Australian home prices.

Calendar items with no article behind them

A note on the economic calendar entries read in full here: the Nasdaq pages returned only site boilerplate, so all that's usable is the figures in the headlines themselves. Australia's S&P Global manufacturing PMI was 49.6 against 49.7 consensus and 49.6 prior; China's RatingDog manufacturing PMI was expected at 52.0 against 52.1 prior, with official China manufacturing PMI consensus at 50.1 and non-manufacturing at 50.5. South Korea's manufacturing PMI prior was 53.9. No commentary accompanied any of them.

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