Hot CPI and a much hotter PPI
The backdrop this morning is an inflation shock. September CPI came in at 3.7% year over year against 3.6% expected and 3.4% prior, with the n.s.a. monthly print at 0.59% versus 0.32% before. Then producer prices landed well above forecast: headline PPI +1.3% month over month against +0.6% expected, +6.3% year over year against +5.4%, and core PPI +0.7% monthly, +5.0% annual, both roughly half a point hot. Real earnings fell 0.5% after +0.2%. The Cleveland Fed's CPI measure was steady at 0.2%.
Rate-hike talk, not cut talk
The policy conversation has flipped to hikes. A Factbox from Investing.com says major brokerages now expect the next Fed move to be a hike in December. UBS went further after the CPI print, revising to three hikes in total: September and December 2026 plus March 2027. Chris Zaccarelli of Northlight Asset Management expects 25bp in December and then a hold. Nick Timiraos flagged Wednesday's Fed-speak as the last round before Warsh's appearance tonight and the October blackout, quoting Bowman a few hours ahead of CPI saying she felt no urgency and wanted time to see how things evolve. Goolsbee, Barkin and Bowman all appear on the calendar, and Warsh's "quest for a quiet Fed" is drawing vocal pushback per Investing.com.
Yields fell despite the hot data
Counterintuitively, Treasuries rallied. DeItaone reported 5- and 7-year yields down 15 basis points on the day, and Investing.com has yields sliding after the CPI-driven spike. The dollar retreated with them. Kitco has spot gold and silver solidly higher in early US trade, rebounding from Wednesday's sharp losses, attributing it to falling yields, a weaker dollar and safe-haven demand outweighing the hot PPI. Gold held above $4,100 and was near session highs after both regional surveys.
Regional surveys split
The Philadelphia Fed manufacturing index fell to 20.9, short of the 28.2 consensus and well below 37.8 prior. The New York Empire State index went the other way, rising to 25.5 against 12.10 expected, though Kitco notes price pressures and the outlook worsened within it. Atlanta Fed GDPNow is unchanged at 3.6%. Mortgage data was soft: applications -2.7%, purchase index down to 139.3, 30-year rate at 7.50%. The US Ipsos consumer sentiment reading dropped to 45.18 from 50.45.
Equities, chips and the AI trade
Investing.com reports the stock market posted its worst day in months on inflation plus a tech selloff, with chipmakers sliding globally and in Europe on rate-hike fears combined with an AI rout. IBD's live coverage has the Dow rising while the Nasdaq tumbles on AI worries, with CoreWeave's borrowing costs and a Gartner outlook cited as rattling AI names. Yardeni Research cut its year-end S&P 500 target to 7,900 from 8,400 on the view that investor caution could compress valuations, while staying bullish on earnings at $425 per share for 2027. Wall Street futures were down ahead of TSMC results. Marsh led an inflation-winners screen after the PPI data.
Crypto followed rates
Bitcoin slid below $81,000 on the CPI print and the resulting hike bets, then reclaimed $80,000 per several TradingView posts, with $82,500 named as the next resistance. TradingView also ran a broader piece on crypto and global markets falling as US inflation fuels Fed fears.
Europe and the rest
French inflation rose to 3.4% in September, the highest since January 2024. A Reuters poll has the BoE raising to 4% in November with economists narrowly expecting a hold after that, and separately analysts said the UK's August growth beat opens the door to higher rates. The 5-year gilt auction cleared at 4.945% versus 4.843% prior; the German 30-year Bund auction came in at 3.800%, down from 3.900%. UniCredit won ECB approval to raise its Commerzbank stake past 30%. DeItaone reports ECB officials growing impatient for Lagarde to clarify her plans, with the World Economic Forum possibly appointing her as chair as early as November 2, which would mean leaving before her term ends in October 2027. BoE's Breeden said banks need a "bare metal" recovery capability given AI risks. The IMF warned Africa's resilience masks rising inflation and fragile buffers.
Asia-Pacific data
Japan's core machinery orders came in at 18.6% against 15.7% expected and 11.2% prior. Australia's jobs report was due with 19.6K employment change expected after 39.5K, unemployment seen steady at 4.6%. Korea's trade balance was expected at 49.85B versus 34.79B. India's September unemployment rate was 5%. Canada building permits surprised at 8.8% against 2.9% expected, after -15.8%.
A note on the full-text items
Twenty items were pulled in full, and all twenty were Nasdaq economic calendar pages that returned only site boilerplate, no data at all. Everything above comes from the figures carried in the item lines themselves and from the headline items, not from article bodies. One oddity worth ignoring: the BoE Woods calendar entry carries a -1.7% quote tag, which has no bearing on the event itself.
Hot CPI is the whole backdrop
The September US CPI print is what everything else today is reacting to: headline 3.7% year over year against 3.6% consensus and 3.4% prior, with the non-seasonally-adjusted monthly figure at 0.59% versus 0.32% before. Real earnings came in at -0.5% after +0.2%. The rate response was immediate and hawkish. UBS now expects three Fed hikes in total, September and December 2026 followed by March 2027, having added the March leg specifically because of the hot September inflation data. A separate Investing.com factbox says major brokerages see the next hike in December. One cross-current: Investing.com reports Treasury yields slid back after the initial CPI-driven spike, and the dollar slipped, so the bond move did not simply hold its first direction.
Equities and the AI trade took the hit
Wednesday was described as the stock market's worst day in months, on the combination of inflation and a tech selloff, and the damage continued through the Asian session. KOSPI slumped 7% on the chip rout, with global and European chipmakers sinking as inflation data fed both rate-hike fears and the AI unwind. Investor's Business Daily ties the AI leg specifically to CoreWeave's borrowing costs and a Gartner outlook, and had the Dow rising while the Nasdaq tumbled. Yardeni Research cut its year-end S&P 500 target to 7,900 from 8,400, warning that investor caution could compress valuations, while staying bullish on earnings with a 2027 forecast of $425 per share. Bitcoin slid below $81,000 as hike bets firmed. Gold is holding around two-month lows after CPI flushed it to 4,073, though several TradingView pieces note it has since recovered some ground; those are trader notes, not reporting.
What's due today
A heavy US calendar lands at 8:30 ET. Expectations flagged ahead of the release: September PPI +0.6%, core PPI +0.3%, retail sales +0.4% and ex-autos +0.5%. Also on the slate are initial jobless claims (consensus 199K versus 197K prior), continuing claims at 1,710K, Philadelphia Fed manufacturing at 28.2 against 37.8 prior, Empire State at 12.10 versus 7.60, business inventories at 0.4%, and retail control at 0.3% after a strong 1.2%. Later come the Beige Book and the federal budget balance, consensus -29.0B against -167.0B prior. Fed Chair Warsh speaks, as do Goolsbee, Barkin and Bowman. Separately, Investing.com reports pushback against Warsh's effort to run a quieter Fed. Atlanta Fed GDPNow sits at 3.6%.
Inflation is running hot elsewhere too
It isn't only the US. India's WPI inflation came in at 11.39% against 10.18% expected and 9.92% prior, with fuel at 25.85% and food at 8.14%. French inflation rose to 3.4% in September, the highest since January 2024. Spanish core CPI ticked up to 3.1% from 2.9%, even as monthly CPI cooled to 0.3%. In the UK, a Reuters poll has the BoE raising to 4% in November with economists narrowly expecting a hold thereafter, and Pill said a hike need not be the start of a long series; analysts also said August's growth beat opens the door to higher rates. Lagarde, Schnabel, Elderson, Nagel, Buch, Woods, Breeden and BoC's Rogers all speak today. Breeden separately warned banks need a "bare metal" recovery capability given AI risks.
China credit, Japan orders, oil
China's September credit data beat: total social financing 3,550B against 3,270B expected and 1,660B prior, new loans 1,080B versus 1,025B, though M2 growth slowed to 7.2% against 7.4% expected. Japan core machinery orders came in at 18.6% against 15.7% consensus and 11.2% prior. On energy, the API weekly crude stock showed a 11.12M draw against an expected 1.9M build, with official EIA numbers still to come. US mortgage data was soft: the 30-year rate at 7.50%, applications down 2.7%, purchase index 139.3 from 145.1. The US Thomson Reuters IPSOS consumer sentiment reading dropped to 45.18 from 50.45.
A note on the calendar items
About twenty of these items were pulled in full text, but all of them are Nasdaq economic calendar pages that returned nothing but site scaffolding, so the consensus and prior figures carried in their headers are the entire content available. That covers the Australian labour data (unemployment consensus 4.6%, employment change 19.6K against 39.5K prior, participation 67.0%), South Korean trade, Singapore exports and the various money supply and reserve lines. Treat them as calendar entries, not as articles.
September CPI came in hot
The September CPI is the one thing driving everything else in this section. Headline prices rose 0.6% on the month after a 0.4% gain in August, putting the annual rate at 3.7% against forecasts of 3.6% and up from 3.4% in August. Core rose 0.3% versus 0.2% expected, 2.6% year on year. Nick Timiraos, in headline-only posts, puts core at +0.33% unrounded and notes the three-month annualised core rate jumped to 3.4% from 2% in August, with core goods at +0.25%, the biggest monthly gain in a year, and shelter at +0.39%. Separate headline items attribute more than half the monthly increase to energy, with gasoline up 9.1% and fuel oil up 15.3%, and one notes this is the 66th straight month above the Fed's 2% target.
Rate-hike odds reprice, then partly unwind
Pricing for the October 27-28 FOMC meeting moved hard. Per the Investing.com piece read in full, trader odds of a hike went from 22% before the data to about 40% in the morning, then faded back to roughly 33% by late afternoon on LSEG data. Headline items put Kalshi at various points as high as 55%. Citigroup, per a headline-only post, now expects a 25bp hike in December, having previously forecast no change this year. Fed speakers leaned uncomfortable rather than committal: Goolsbee told Yahoo Finance the data was "discouraging" and said services inflation shows little sign of improvement, while affirming the Fed will get back to 2%. Barkin said CPI was higher than hoped and declined to prejudge October. Headline items flag Kevin Warsh speaking Thursday at the IMF meetings in Bangkok, the last scheduled Fed remarks before the blackout.
Treasuries reversed the selloff
Despite the data, Treasuries ended Wednesday rallying. Two-year yields hit their highest in over two weeks right after the release, up as much as 12.7bp to 4.92% at one point per a headline post, before retreating with longer maturities. End-of-session quotes in the article show the 10-year at 5.186% (down 0.59%), the 30-year at 5.522% and the 2-year at 4.81%, with the 10-2 spread widening about 4bp. The article frames the reversal as a tug-of-war between the inflation print and recent Fed comments suggesting no rush to hike further.
Equities sold off, led by tech
The S&P 500 closed at 7,723.59, down 1.05%, with the Nasdaq off 1.88% at 26,692.87 and the Dow roughly flat at -0.09%. VIX rose about 10% to 16.80. The damage was concentrated in AI and semis: NVDA -3.09%, AMD -5.73%, META -3.27%, MU -4.08%, with ORCL -8.82%, MRVL -8.67% and CRWV -15.46% among the worst. Defensives held up, UNH +4.77%, BMY +4.59%, KR +3.87%. Headline-only pieces from Investing.com tie the move to rate-hike bets ("Red hot CPI report fuels AI rout", "AI infrastructure firms slump"). A TradingView post read in full describes the futures tape: CPI swept the buy side above 7,874 on ES then flushed 140 points into 7,741, with 7,821 cited as the level where range value low and daily value area high overlap.
Gold and miners lower
Spot gold fell 1.5% to $4,095.16 as the inflation print pushed hike expectations up. Miners followed: Barrick -1.5%, Newmont -1.7%, Harmony -1.6%, Gold Fields -0.8%, Sibanye Stillwater -2.6%, Agnico Eagle -2.2%, Kinross -1.6%. Note gold futures in the same page quotes were marked slightly higher at 4,123.65, +0.38%. A cluster of headline-only Kitco items covers the same story from different angles, including whether gold can hold $4,000 with an October hike in play and a UBP view that the Treasury-yield-driven losses may have run their course.
Other US data and the rates backdrop
Supporting US data was mixed. Existing home sales came in at 3.99M against 3.95M expected and 3.93M prior. NFIB small business optimism was 97.9, below the 98.1 consensus and 98.7 prior. Redbook retail jumped to 10.4% from 8.6%. The MBA 30-year fixed mortgage rate is reported at 7.50%, up 53bp in four weeks and 108bp on the year. The Beige Book, per a headline post, showed little or no change in employment across most districts, with only two of twelve recording moderate growth and three reporting strong price increases. The New York Fed is holding off on new bond purchases for a third straight month, buying $14.6bn of bills through reinvestment only.
Europe, UK and Asia
European shares closed higher despite the US print, FTSE 100 +0.70% at 10,724.86, DAX +0.25%, Euro Stoxx 50 +0.33%. In the UK, BoE chief economist Huw Pill said he is sceptical about market pricing of four rate hikes, per headline-only Investing.com items, and the FTSE wrap ties the day's gains partly to those hike doubts. Spain's final EU-harmonised inflation printed at 5.0% for September. Italian BTP auctions cleared notably higher than previous: 3-year at 3.69% from 3.43%, 7-year at 4.24% from 3.98%, 15-year at 4.84% from 3.95%. Germany's 5-year Bobl went the other way, 3.220% from 3.280%.
Calendar entries with no data behind them
A large block of this section is Nasdaq economic calendar entries whose pages returned no data at all, so all that exists is the consensus and previous on the line itself: China CPI (1.0% consensus vs 0.8% prior), China PPI (4.4% vs 3.8%), China trade balance (116.80B USD consensus vs 119.09B), Singapore GDP (5.0% vs 5.9%), Japan M2 and M3, Australia's MI leading index, the US federal budget balance (-29.0B consensus vs -167.0B), and scheduled remarks from Lagarde, Lane, BoE's Breeden, and Fed's Collins and Barkin. Nothing further is available on any of them.
What's queued for today
Per the futures note read in full, Thursday carries UK GDP at 02:00 ET and Bailey at 03:30 ET, then PPI, retail sales, jobless claims, Empire and Philly Fed all at 08:30 ET. Headline items note Wall Street is set to raise core PCE forecasts after the CPI miss, with TD Securities already at 0.36% from 0.21%, so PPI will feed directly into those revisions.
CPI day is the whole session
Everything in this section bends toward one event: the September US CPI release at 8:30 a.m. ET. The consensus in the headlines here is +0.6% month-over-month on headline and +0.2% on core. Bloomberg Economics, via a DeltaOne post, forecasts headline up 0.6% MoM taking the annual rate to 3.7% from 3.4%, with core up just 0.23% MoM and annual core edging to 2.46%. The Cleveland Fed nowcast cited in another post has core at +0.20% MoM against a median analyst forecast of 0.21%, and headline at +0.53%. The split story is consistent across sources: energy, specifically gasoline, is expected to drive the headline jump while core stays tame. Nick Timiraos makes the same point, and separate pieces from Investing.com and OilPrice tie the headline risk to high gasoline prices, with one OilPrice headline saying Wall Street still sees inflation easing even with oil above $90. Futures were muted into the print, the TSX and FTSE edged higher, and European stocks gained on ASML's sales forecast.
Fed is still in tightening mode
The notable thing in the Fed commentary is that the debate is about hikes, not cuts. NY Fed's Williams told Bloomberg he thinks one more rate increase this year may be appropriate and currently sees no need for any in 2027, adding that the economy is not overheating, there is no labor market inflation pressure, and disinflationary forces are still at play. He also said the AI buildout is pushing up chip prices and construction costs and feeding inflation, with supply unlikely to catch up for years. Treasury yields fell on those remarks, with the 30-year quoted at 5.565%, down about 3.4bp. Boston's Collins went the other way, signaling further hikes are likely as inflation risks persist. Waller argued the rise in bond yields reflects growth and AI investment rather than inflation, with expectations still anchored. Hassett said the Fed may treat an inflation slowdown as reason to hold. Kitco notes markets see almost no chance of an October hike and roughly 25% for December, and BMO flags investors buying long-dated Treasuries ahead of the print. PIMCO's Ivascyn said yields have yet to peak if the Fed tightens further. Collins, Barkin and Waller are all on the speaking calendar.
Inflation prints outside the US
Germany's final September CPI and HICP both came in at 3.3%, matching consensus and up from 2.9%. Spain's final EU-harmonised rate was 5.0%. Romania rose to 6.6% on fuel costs, and Argentina's monthly rate was 1.9%, in line. China went the other way on consumer prices, with CPI growing less than expected, while PPI hit a four-year high, described as factory-gate inflation accelerating. In the UK, the BoE's Pill said he is sceptical of market pricing for four rate hikes.
Dollar, gold and yields
The dollar was described as languishing and falling on dovish Fed comments, with sterling edging up against it. Gold was mixed in the headlines: Kitco had it firmer early Tuesday on a softer dollar and lower yields and oil, then weaker late in the day as traders cut exposure before CPI, with silver sharply lower, citing front-end Treasury yields and Hormuz risk. Investing.com has gold holding a two-day slide with the Fed signaling one more hike. Bitcoin was flat at $83.5k. The 2s10s curve was quoted at a positive 40.6bp with the 2-year at 4.797%.
Mortgage rates and US data points
An MBA figure via DeltaOne has the 30-year fixed mortgage at 7.50%, up 53bp over four weeks and 108bp over the past year, with 15-year at 6.87% and jumbo at 7.49%. Elsewhere in the day's US numbers: existing home sales 3.99M against 3.95M expected, NFIB small business optimism 97.9 versus 98.1 expected and 98.7 prior, and Redbook at 10.4% from 8.6%. Bill auctions printed higher, 6-month at 4.200% and 3-month at 4.085%. Italian BTP auctions cleared meaningfully above prior levels, the 15-year at 4.84% versus 3.95%.
Fed independence friction
Lisa Cook's lawyer denounced the latest attempt to remove her and asked the White House to postpone a Nov. 5 hearing until after the Fed's Dec 8-9 meeting, citing Fed travel. Waller, separately, said there is a threat to Fed independence from the administration but that it has not really succeeded so far.
A note on the calendar items
The twenty items marked as read in full are all Nasdaq economic calendar pages, and every one of them returned the same empty page shell with no data. The only usable content is in the item lines themselves: China trade balance consensus $116.80B against $119.09B prior, China CPI consensus 1.0% and PPI 4.4%, Singapore GDP consensus 5.0% from 5.9%, the US federal budget balance consensus -29.0B against -167.0B prior, and scheduled remarks from Lagarde, Lane, Breeden, Collins and Barkin. Treat those as calendar entries, not reporting.
The rest
The large remainder of the section is TradingView chart posts, mostly gold levels and pre-CPI setups, plus index and crypto level maps. Nothing there adds to the macro picture above.
Williams sets the tone, yields fall
The main event before the open was John Williams. In a Bloomberg interview published Tuesday, the New York Fed president said he hasn't changed his view that one more hike this year "may be appropriate," and that for 2027 he has no reason at this time to think more would be needed, while leaving the door open to data changing that. The Fed raised to 3.75%-4.00% last month, and Williams, who is FOMC vice chair, had already priced the October 27-28 meeting out of play with his September 29 Buffalo remarks. He expects inflation to come down "quite a bit" next year and near 2% for the year as a whole, as tariff effects drop out and energy stops adding to prices, and he said this is "not an economy that is overheating overall," with no labor market inflation pressure and disinflationary forces still at work. He did flag AI infrastructure demand pushing up chip prices and construction costs, with supply unlikely to catch up for several years, and said higher long-term yields are themselves tightening borrowing conditions. Treasuries rallied on it: the 30-year at 5.565% down 3.42bp, the 10-year 5.219% down 2.51bp, the 2-year unchanged at 4.795%. Markets had been pricing a December hike plus two more in 2027, so his line reads as the less hawkish side of the committee.
CPI tomorrow, nowcast near consensus
September CPI lands Wednesday and is what everything is positioned around. The Cleveland Fed nowcast has core CPI at +0.20% month-over-month against a median analyst forecast of 0.21%, and headline at +0.53% versus a forecast range of 0.55%-0.62%, so core roughly in line and headline potentially a touch soft. Nick Timiraos framed it the same way: forecasters expect a big rise in energy prices to lift headline while core comes in tamer. Investing.com's headline-only calendar items note the Beige Book and oil inventories are also due Wednesday.
The committee is split
Williams is only one voice and the rest of the Fed commentary pulls in different directions. Cleveland's Beth Hammack, in headline-only items, says current policy is not restrictive enough, wants more tightening and prefers it come relatively quickly, prefers smaller and more frequent moves, and says she's hearing early warning signs of a problem with inflation expectations. Goolsbee is reported warning the AI boom could spread price pressure beyond data centers into electricity, construction and land. Waller argues the surge in bond yields reflects growth and AI investment rather than inflation, with expectations still anchored, and separately told Bloomberg there is a real threat to Fed independence from the administration that so far hasn't succeeded. Hassett is quoted saying the Fed may treat an inflation slowdown as reason to hold. Barkin says shocks continue. I only have the headlines on those, not the full pieces.
ECB's Lane on AI, wages and financing conditions
Philip Lane, speaking in Dublin, gave the fullest non-Fed policy content of the day. With euro zone inflation running at nearly twice the 2% target on expensive energy, he said AI's potential to replace some workers may weaken bargaining power, moderating wage growth and reducing the labour share, which he offered as an explanation for why wages are slowing despite high inflation. More directly relevant to policy, he said global corporate borrowing to fund AI is pushing up long-term rates and that the spillover into euro area bond markets amounts to a material tightening of financial conditions, "a relevant factor for the ECB in determining the appropriate monetary policy stance." The ECB has been raising rates; tighter conditions from the bond market could mean it has to do less itself. Note the symmetry with Williams and Waller saying much the same thing about US long yields.
IMF meetings and global inflation prints
Finance officials are in Bangkok for the IMF-World Bank annual meetings. Treasury Secretary Scott Bessent is absent, so the focus falls on Fed Chair Kevin Warsh, scheduled to speak publicly October 16, who has said little about the policy outlook. The IMF raised its 2026 global growth forecast by 0.1 point to 3.1%, with AI investment offsetting high energy costs, and sees US growth at 2.3% in both 2026 and 2027. On the inflation prints, Argentina's September CPI rose 1.9% month-on-month from 1.7% in August, matching the Bloomberg median, with annual inflation easing to 33.4%; utilities drove it, housing/water/electricity/gas up 3.1% and education up 3.0%, while core slowed to 1.7% and food rose 2.0%. That comes against a weak backdrop — after a Q2 contraction, central bank survey economists expect another Q3 drop, which would be a technical recession, and 2026 GDP growth is now seen at 1.5%, about half what was priced at the start of the year. Headline-only elsewhere: German September inflation confirmed at 3.3%, India CPI 5.54% against 5.40% consensus and 4.83% prior, Romania 6.6% on fuel, UK grocery price inflation 2.5%, RBA minutes said to signal further hikes, and Japan wholesale inflation staying elevated and keeping the BOJ hike case alive.
Positioning and the tape
Headline-only, but the cluster is consistent: a BofA fund manager survey finds 76% expect the Fed to hold and says 10-year yields would need to approach 6% to pull money out of stocks into bonds, and the same poll shows tech overweight at its highest since August 2020. Goldman Sachs upgraded equities to overweight over three months and bonds over 12 months. PIMCO's Ivascyn is quoted saying yields haven't peaked if the Fed tightens further. Jamie Dimon's Q3 commentary calls the economy strong on business investment and consumer spending while flagging deficits, sticky inflation, elevated asset prices, rising rates and geopolitics. Index levels in the sidebars of the Tuesday articles show the S&P 500 roughly flat near 7,806, the Dow down about 0.35% around 51,671, the Nasdaq slightly lower, the dollar index at 102 and near an 18-month high, WTI around $94.66 and Brent $106.14, gold futures near $4,186.
Calendar entries without data
A number of items in this section are Nasdaq economic calendar pages for the Australian NAB survey and business confidence, RBA minutes, Japan PPI and bank lending, and the UK BRC retail sales monitor. The pages themselves returned no data, so all that's available is what's in the line itself: NAB business survey previous -1, confidence previous -8, Japan PPI consensus 7.6% against 7.6% prior, bank lending consensus 5.5% against 5.4%, BRC retail sales consensus 0.8% against 0.5%. The rest of the list is largely TradingView chart commentary on gold, SPY, the index futures and FX pairs, which is positioning talk ahead of CPI rather than news.
CPI Wednesday is the pivot point
Everything in this section bends around one event: September US CPI lands Wednesday at 8:30 ET, expected at 3.7% year over year against 3.4% in August. The hi2morrow daily research note puts that figure on the record and frames the week around it alongside the bank earnings opening. Gold and SPY commentators are both positioned around it rather than ahead of it — one SPY note has the ETF at 777.45 premarket, stuck under the 779.37 August high it has traded through and closed below three times (Tuesday, Friday and Monday), with Monday's range 777.05 to 779.40. A separate gold piece cites markets pricing roughly a 17% chance of an October Fed hike, with December far more heavily priced.
Chip and AI selloff drives the tape
The big move overnight was in semis. Kospi fell about 6% as chip stocks sold off, with Samsung and SK Hynix each down nearly 10% in Seoul on reports that China's CXMT is catching up with rivals; the hi2morrow note says the selling started late Monday in thin US holiday trading and cites Reuters. Memory and storage names extended the slide in the US (MU, SNDK, WDC, STX), and UBS cut its price target on WDC over HDD supply concerns. Broader AI chip and hardware names were lower after Broadcom's CEO called AI stock investing "dangerous, casino-like," per Reuters, with AI cloud and data-center names (NBIS, CRWV, IREN, APLD, WULF, RIOT, CLSK) caught in the same move. Futures were mixed, with the Nasdaq taking the weight. Separately, the IMF raised its global growth forecasts on AI demand and trade while warning that an AI investment slowdown could trigger an asset price correction.
Banks open Q3 season, mixed results
Goldman's profit rose 29% on equities trading and dealmaking with revenue beating estimates, and the stock gapped up. JPMorgan's profit missed estimates but the stock turned higher on an upbeat net interest income outlook. Wells Fargo beat on profit and missed on revenue, Citi's profit soared, and both WFC and C gapped down on the print. Morgan Stanley traded higher in sympathy with Goldman ahead of its own numbers Wednesday. Jamie Dimon's accompanying commentary, quoted in full: the US economy "continued to be fueled by strong business investment and ongoing consumer spending," but "large fiscal deficits, sticky inflation, elevated asset prices, rising interest rates and geopolitical conditions continue to shift under the surface." A headline-only item notes Citigroup was up 13% ahead of the print.
Fed speakers split on what comes next
Cleveland's Beth Hammack is the hawkish end: headlines have her saying current policy is not restrictive enough, that more tightening is needed, that inflation's return to target is too slow, that she prefers smaller and more frequent moves, and that she is hearing "early warning signs" of a problem with inflation expectations. She also called Treasury yields modest by historic standards and said higher rates won't dissuade hyperscalers though they might affect other industries. Against that, Kevin Hassett said the Fed may see an inflation slowdown as a reason to hold, and that the Fed will keep inflation in control rather than kill the economy. Christopher Waller argued the yield surge is about growth, not inflation — strong growth and AI investment are pushing Treasury yields up while inflation expectations stay anchored, and he estimates weaker safe-haven demand for US debt could be adding 50 to 70 basis points to yields, with the AI boom running another two to three years. Goolsbee, headline-only, warns AI-driven price pressure is spreading beyond data centers into electricity, construction and land.
Rates, dollar and the policy gap
The 10-year sits at 5.191%, down about 5bp on the day, the 30-year at 5.549% and the 5-year at 4.974%, with the dollar index at 102.065, off 0.30%. Headlines elsewhere have the dollar near an 18-month high with Asia FX steady. The Swiss franc piece fills in the rate map: the Fed raised its target range 25bp to 3.75%–4.00% on September 16, its first hike since July 2023, with projections pointing to one more in 2026; the ECB lifted its deposit rate to 2.50% on September 10; the SNB held at 0% on September 24, nudged its inflation forecasts to 0.7% for 2026 and 0.8% for 2027, and dropped explicit language on countering franc appreciation. SNB Vice Chairman Antoine Martin dismissed near-term hikes on October 8. Swiss CPI was 1.0% in September, a two-year high, core 0.5%. USD/CHF hit about 0.8350 on October 8, near a 17-month high around 0.8380, with the franc down roughly 2% against the dollar over the month; EUR/CHF fell to about 0.93 as French debt worries drove haven demand. USD/JPY is above 158. Separately, BofA's fund manager survey (headline only) finds 10-year yields would need to approach 6% before investors meaningfully rotate from stocks into bonds, with 76% expecting the Fed to act in some stated way.
Inflation prints outside the US
Romania's headline CPI accelerated to 6.6% year over year in September from 6.2%, above the 6.4% expected, driven by non-core items: transport fuel inflation to 19.2% from 17.0%, household utilities to 2.6% from 0.5%, food to 3.0% from 2.6%. Core eased marginally to 7.0% from 7.1%. By headline, German September inflation was confirmed at 3.3%, India's CPI jumped to 5.54% against 5.40% consensus and 4.83% prior (described as strengthening the case for further rate hikes), British grocery price inflation rose to 2.5% in October, Japanese wholesale inflation stayed elevated and keeps the BOJ hike view alive, and RBA minutes were reported as signalling further hikes on intensifying inflation risk. South Korea's President Lee said the country cannot avoid raising rates. The direction of travel across these is uniform.
Commodities and metals
Brent fell 1.8% to about $104.8 and WTI 2.0% to about $91.9, while gold gained 0.4% to roughly $4,210 and silver futures sit near 60.67. Gold commentary attributes the bid to a softer dollar, lower oil and a pullback in Treasury yields ahead of CPI, with 4,200–4,212 the nearby resistance area repeatedly flagged. Kitco headlines, read only as headlines, note gold struggling to hold gains with the dollar near an 18-month high, $31 billion of gold ETF inflows in a record third quarter per the WGC, and a Bank of America view that gold needs a dovish Fed or renewed debasement fears to reverse its downtrend. CFTC positioning as of the latest report shows gold net longs trimmed to 210.3K from 218.6K, crude cut to 99.1K from 109.5K, copper to 69.4K from 85.4K, and S&P 500 net shorts deepening to -154.1K from -142.5K while Nasdaq 100 net longs rose to 58.1K. Euro, aussie, sterling and Canadian dollar speculative shorts all grew.
Calendar items with nothing behind them
The Nasdaq economic calendar entries read in full — Australia's NAB survey and confidence, the RBA minutes, Japan PPI and bank lending, the UK BRC retail monitor — returned empty template pages with no data, so the only content is what's in the headline consensus and prior figures. The rest of today's US calendar per the hi2morrow note: ADP weekly employment change at 08:15, existing home sales at 10:00, Barkin at 13:00, the monthly budget statement at 14:00 and Collins at 16:00. Canada, Japan and Brazil were on holiday Monday.
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