US stocks kicked off the week lower ahead of ahead of a busy week with September CPI and the Fed meeting due while Q3 earnings kick in. The DOW closed 0.72% lower while the S&P and the NASDAQ shed 0.69% and 0.64% respectively. Treasuries opened lower on Tuesday, having not traded for Columbus Day on Monday, with the 10Y down some 2bps at London open.
Bets on an imminent BoE rate hike went up as the market opened on Monday following remarks over the weekend by MPC member Michael Saunders that the market was justified in bringing forward the timeline for a hike. The remarks followed Governor Andrew Bailey’s own where he suggested that inflation could be damaging unless acted on. The pound closed weaker however at $1.3596 while yield on 10Y UKTs was flat at 1.6118%.
Asia stocks tumbled, taking cue from Wall Street’s performance on Monday with energy costs weighing down on sentiment. The HANG SENG led the slide, trading 1.70% under as the session wound down while the CSI was similarly heavy, shedding 1.06%. The NIKKEI fared no better, own 0.94% while the ASX was comparatively better, down 0.26%.
Inflation broke double digits in September at 10.25% cementing bets on yet another Selic hike at the next BCB meeting. The increase in fuel prices announced by Petrobras last week added to expectations of rising inflation with economists in the latest BCB survey expecting end-2022 inflation at 4.14%. The real closed weaker at 5.5391 to the dollar while BRAZIL 30s were about flat, yielding about 4.35%.
President Kais Saied finally swore in a new government on Monday, 11 weeks after dismissing the previous one. The move came as political tensions started to grow while the economy staggered with the central bank raising concerns about debt servicing. BTUN 26s were little changed on the news, trading about 11.35%.