Daily update
Daily update
- There is almost nothing of note on the economic calendar—even ECB President Lagarde does not appear to be speaking. Eurozone October consumer confidence is due, but no investor is likely to change their portfolio on the back of such a number. This leaves markets prey to the whims and caprices of traders—or, worse, politicians.
- The US House of Representatives still has no speaker. A British observer might suggest an institutionalized two-party structure is a struggle to cope with representatives behaving as if in a three-party legislature. This is probably the last week markets will disregard the politics—after Halloween this ceases to be slapstick entertainment and starts to raise a risk premium around government shutdown.
- The Federal Reserve’s Financial Stability Report was published on Friday, and is the second such report since the flurry of bank failures earlier this year. The challenge for regulators is that economic structural change creates new financial risks. New communication technology changes how bank runs form. New ways of working and consuming change the risks associated with assets like real estate.
- Bond yields are likely to be a focus in the absence of fundamentals. US Treasury yields contain a risk premium for ( unnecessary) Federal Reserve policy uncertainty.
