The USD is the strongest and the CHF is the weakest as the NA session begins

As the North American session begins, the US dollar is the strongest and the Swiss franc is the weakest. Japan was on holiday today and so was Canada (Thanksgiving). The US has a semi-holiday period but US stocks are open (Columbus Day). But the bond market is closed. No economic releases today, but the Minneapolis Fed reports. Kashkari is in Buenos Aires and speaking at two events, one at 9 a.m. and one at 5 p.m. In the middle, Fed Governor Waller speaks at 3 p.m.

During the weekend:

• Goldman sees personal consumption expenditures data showing 2% year over year. The policy rate is still expected to rise to 2.6% when the data is released towards the end of the month. US CPI and Producer Price Index data last week were mixed. https://www.forexlive.com/centralbank/goldman-sachs-says-the-pce-inflation-data-will-show-the-fed-is-at-its-2-target-already-20241013/
• UBS still sees the Fed cutting interest rates by 25 basis points at its next meeting in November. https://www.forexlive.com/centralbank/ubs-says-the-federal-reserve-remains-on-track-to-cut-rates-shrugs-off-higher-cpi-data-20241013/

In China, in a long-awaited press conference on Saturday, Finance Minister Lan Fuan provided limited details about the country’s fiscal stimulus plans, leaving markets in a state of frustration. The event, organized by the Information Office of the State Council, was expected to highlight how China is ramping up counter-cyclical fiscal policies, but instead, it was focused on the details.

Here are the main takeaways from the event:

• Borrowing capacity highlighted: Lan said China has plenty of scope to issue debt and increase the fiscal deficit. This is seen as a tool to support future stimulus measures, although no specific amount or timing has been mentioned.

• Local government debt: Local governments have access to 2.3 trillion yuan of debt funds available for spending in the fourth quarter of 2024, but this money comes from bonds already issued earlier this year, not from new financing.

• Affordable housing plans: The government is considering purchasing unused housing units and converting them into affordable housing. This is part of a broader strategy to stabilize the housing market, which has been a source of concern due to oversupply and declining demand.

• Vague timeline for policy announcements: Lan noted that more counter-cyclical measures are being studied and that concrete policies will be announced “step by step.” But the real details may only come after legislative meetings in the coming weeks.

• Market reaction: With no immediate or new stimulus measures announced, there are doubts about whether markets will remain patient as they wait for the next round of policy announcements. The Shanghai Composite Index rose 2.07%. The Hong Kong Hang Seng Index fell -0.75%, and the CSI300 rose 1.9%.

Overall, while the Chinese government has reassured its ability to take action, the lack of immediate and concrete measures has disappointed those who had hoped for clearer guidance on stimulus plans. Markets are now awaiting further legislative meetings to obtain more concrete information.

A snapshot of other markets is shown as the North American session begins:

• Crude Oil is trading down -$0.50 and $74.08. At this time yesterday, the price was at $75.32
• Gold is trading down -$3.93 or -0.15% and $2,653.14. At this time yesterday, the price was $2,645.73
• Silver is trading down -$0.32 or -1.05% at $31.19. At this time yesterday, the price was at $31.24
• Bitcoin is trading higher at $64,846. At this time on Friday, the price was at $61,156
• Ethereum is trading at $2,534.90. At this time on Friday, the price was at $2,417.80

In the pre-market, the trading snapshot for major indices was mixed after Friday’s gains. The Dow Jones Industrial Average fell while the S&P and Nasdaq rose:

• Dow Jones Industrial Average futures point to a decline of -97 points. Yesterday, the index rose 409.74 points, or 0.97%, to 42,863.86 points.
• S&P futures indicate a gain of 6.97 points. Yesterday, the index rose 34.98 points, or 0.61%, to 5,815.03 points.
• Nasdaq futures indicate a gain of 54.03 points. Yesterday, the index rose 60.89 points, or 0.33%, to 18,342.94 points.

Yesterday, the Russell 2000 index of small companies rose 45.99 points, or 2.10%, from 2234.41.

Last week, the S&P and Dow Jones Industrial Average closed at record levels. The Dow Jones Industrial Average rose 0.21%, the S&P rose 1.1%, and the Nasdaq rose 1.13%.

European stock indices trade slightly higher:

• German DAX +0.34%
• France CAC, -0.29%
• UK FTSE 100, +0.06%
• Spanish Ibex, +0.59%
• Italian FTSE MIB, +0.48% (10 minutes delayed)

Stocks in the Asia-Pacific session were mixed:

• Japan’s Nikkei 225 is closed for holiday
• China’s Shanghai Composite Index, +2.07%
• Hong Kong Hang Seng Index, -0.75%
• Australian S&P/ASX, +0.47%

Looking at the US debt market, the markets will be closed for the Columbus Day holiday. Closing levels on Friday

• The two-year yield is 3.953%. At this time yesterday, the yield was at 3.970%.
• 5-year return 3.898%. At this time yesterday, the yield was at 3.912%.
• The 10-year return is 4.096%. At this time yesterday, the yield was four point zero nine, 2%.
• 30-year yield or 0.405%. At this time yesterday, the yield was at 4.356%.

Looking at the Treasury yield curve, it is getting steeper on Friday. in conclusion

• The profit margin for 2-10 years is 14.4 basis points. At this time on Friday morning, the yield spread was +11.6 basis points.
• The 2-30 year profit margin is +45.3 basis points. At this time on Friday morning, the yield spread was at 41.7 basis points.

In the European debt market, 10-year bond yields are trading mostly lower with the exception of the British 10-year bond yield: