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Fed candidate Taylor impresses Trump, North Korea sounds nuclear threat, and U.K. inflation hits highest in over five years. Here are some of the things people in markets are talking about today.
President Donald Trump was left with a favorable impression of Stanford University economist John Taylor after the pair met for an hour in the White House last week, according to several people familiar with the matter. Sources also said that former Fed board governor Kevin Warsh, who had been viewed as the front runner to replace Chair Janet Yellen, has seen his star fade. Trump is expected to interview Yellen in her capacity as a second-term candidate on Thursday.
North Korea warned that a nuclear war “may break out at any moment,” with the country’s ambassador to the United Nations saying “the entire U.S. mainland is within our firing range.” The threat comes as the U.S. and South Korea begin naval drills off the coast of the peninsula. Officials in Seoul are preparing for another possible missile launch this week by the Pyongyang regime.
Inflation in the United Kingdom hit the highest level in more than five years in September when consumer prices rose 3 percent, according to the Office for National Statistics in London. The headline rate matched expectations, and is only likely to increase pressure on the Bank of England to raise interest rates for the first time in a decade at next month’s meeting. The other policy headache in the U.K. continues to be Brexit negotiations, with the timeline for progress on talks being pushed back to the end of the year, despite Prime Minister Theresa May’s intervention yesterday. As the chance of a no-deal Brexit increases, traders are starting to look at what that might mean for asset prices.
Overnight, the MSCI Asia Pacific Index fell less than 0.1 percent, while Japan’s Topix index closed 0.2 percent higher as Chinese stocks and bonds slipped on the eve of the Communist Party congress. In Europe the Stoxx 600 Index was unchanged at 5:40 a.m. Eastern Time, with Spain’s IBEX 35 holding near a one-week low as the country lowered its growth projections due to the Catalan crisis. S&P 500 futures were unchanged, the 10-year Treasury yield was at 2.305 percent, and gold was lower.
Goldman Sachs Group Inc. and Morgan Stanley report earnings before the bell today, with investors hoping they will buck the trend of third-quarter declines posted by Wall Street peers so far this season. In other corporate news this morning, Airbus SE has agreed to acquire a majority stake in Bombardier Inc.’s C Series jet program – without paying a penny. Airbus would manufacture C Series planes for the U.S. market in its Mobile, Alabama facility in an effort to circumvent the tariffs recently imposed on the jet.
What we've been reading
This is what's caught our eye over the last 24 hours.
- Odd Lots: How one trader won big while everyone else panicked on Black Monday.
- The crash of ‘87, from the Wall Street players who lived it.
- The money-losing volatility trade hedge funds can’t resist.
- What debt crackdown? China’s banks are bingeing on bonds.
- A $4 trillion hole in the bond market may start filling in 2018.
- Initial coin offerings rake in another billion in under two months.
- Where gold really comes from.