<p>With four weeks to go until the vote, polls and prediction markets point to a divided government the most likely outcome, Goldman Sachs wrote in a note.</p><p>There is a 85% likelihood that Republicans gain control of the Senate, the House or both, and just a 15% likelihood that Democrats maintain unified legislative control.Historically, a divided Congress has been more favourable for stocks as many investors believe it makes sweeping reforms less likely to pass, keeping the investment backdrop more stable.“<a target=“_blank“ href=“https://www.forexlive.com/terms/e/equities/“ target=“_blank“ id=“9c7de710-0fba-425c-93e5-422427b92644_1″ class=“terms__main-term“>Equities</a> typically perform well following midterms as political uncertainty declines,“ GS strategists said.The S&P 500 has generated a median return of 3% through year-end and 17% during the 12 months following midterm elections, Goldman Sachs‘ analysis of the last 90 years showed.“However, we believe the election outcome will rank low on the list of macro drivers of equity market returns,“ strategists added.</p><p><a target=“_blank“ href=“https://twitter.com/PriapusIQ/status/1579793124700065792?s=20&t=CZTocCoIKgKS-w8xGTtpTw“ target=“_blank“ rel=“nofollow“>Full Reuters note</a></p>

This article was written by Ryan Paisey at forexlive.com.

<p>The German government still expects a recession in 2023, sees GDP at -0.4% – govt sources</p><p>Now expects inflation at 8.0% in 2022, 7.0% in 2023 after gas price brake</p><p>Lets be honest, they’d be a laughing stock if they dint expect a recession </p>

This article was written by Ryan Paisey at forexlive.com.

<p>PBoC on the wires: </p><p>Will further enhance depth and breadth of the currency market</p><p>PBoC will strengthen the flexibility of the RMB exchange rate, and give better play to the role of the exchange rate as an automatic stabilizer for macroeconomic adjustment and balance of payments</p><p>Will resolutely curb big fluctuations of exchange rate </p>

This article was written by Ryan Paisey at forexlive.com.

<p>U.S. small business sentiment edges up in September – NFIB</p><p>US NFIB Business Optimism Idx (Sep): 92.1 (Prev. 91.8)</p><p>Thirty percent of owners reported that inflation was their single most important issue in operating their business, up one point from August but seven points down from July’s reading, which was the highest share since the fourth quarter of 1979.</p><p><a target=“_blank“ href=“https://twitter.com/PriapusIQ/status/1579774473427111936?s=20&t=mu3ol6vQyzyHUsiFxN0wrA“ target=“_blank“ rel=“nofollow“>Full Reuters note</a></p>

This article was written by Ryan Paisey at forexlive.com.

<p>Reuters report; The cost of insuring exposure to China’s sovereign debt rose to the highest level since January 2017 on Tuesday, data from S&P Global Market Intelligence showed.China’s five-year credit defaults swaps added 5 basis points (bps) from Monday’s close to hit 112 bps, the data showed. China CDS started the year at 40 bps.With the exception of its deeply indebted property sector, which has also been the target of a policy crackdown, China’s external debt levels are contained.</p><p><a target=“_blank“ href=“https://twitter.com/PriapusIQ/status/1579772926534221825?s=20&t=a-RDnF33JSC5obDCDdzEDQ“ target=“_blank“ rel=“nofollow“>Full Reuters note</a></p>

This article was written by Ryan Paisey at forexlive.com.

<p>Data post is here from earlier:</p><ul><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/swiss-sight-deposits-of-domestic-banks-fell-for-the-week-ended-october-7-20221010/“ target=“_blank“ data-article-link=“true“>Swiss sight deposits of domestic banks fell for the week ended October 7</a></li></ul><p>For a little more if you are interested, <a target=“_blank“ href=“https://www.reuters.com/business/finance/swiss-national-bank-cuts-overnight-deposits-by-30-billion-francs-2022-10-10/“ target=“_blank“ rel=“nofollow“>Reuters here</a>. </p><ul><li>Last week’s drop was the second biggest decline in sight deposits – cash of commercial banks held with the central bank – since weekly records began 11 years ago.</li><li>It follows a 77.5 billion franc drop the week before and likely represents the SNB selling bills and repos into the market as part of its strategy to raise the Swiss Average Rate Overnight (SARON) towards the central bank’s policy rate of 0.5%, </li></ul>

This article was written by Eamonn Sheridan at forexlive.com.

<p>The UK’s Financial Conduct Authority wants reports on gilts and associated markets </p><ul><li>daily reports on any significant deterioration in market conditions</li></ul><p>—</p><p>Reuters with the headline citing an unnamed source. </p><p>I guess the only thing worse than this is not getting such reports? </p><p>This comes after the huge disruption to gilts and GBP in response to the new UK government (new PM and Chancellor at least) unfunded tax cut plans. The markets bounced back after Bank of England intervention. </p>

This article was written by Eamonn Sheridan at forexlive.com.

<p>Earlier post:</p><p><a target=“_blank“ href=“https://www.forexlive.com/news/reminder-its-a-canada-and-us-sorta-holiday-today-monday-10-october-2022-20221010/“ target=“_blank“ data-article-link=“true“>Reminder – it’s a Canada and US (sorta) holiday today, Monday, 10 October 2022</a></p><p>Fed speakers coming upon regardless of the holiday:</p><ul><li>1300 GMT – Chicago Fed branch President Evans is speaking on his view of current economic conditions and monetary policy</li><li>1735 GMT – Fed Vice-Chair Brainard is speaking on ‚Restoring price stability in an uncertain economic environment‘ </li></ul><p>Both of these should have plenty of pertinent comments. Fed officials have been sticking to the mantra of continued hikes, to do what is necessary to bring inflation back to target. Evans and Brainard are two of the more nuanced Fed officials though, Should be instructive. </p><p>Federal Reserve vice chair Brainard</p>

This article was written by Eamonn Sheridan at forexlive.com.

<ul><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/recap-of-the-bank-of-england-to-lend-against-a-wider-range-of-assets-20221010/“>Recap of the Bank of England to lend against a wider range of assets</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/fitch-says-the-actual-opec-oil-output-fall-will-be-less-than-the-cuts-20221010/“>Fitch says the actual OPEC+ oil output fall will be less than the cuts</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/the-ecb-and-pboc-have-extended-their-currency-swap-deal-for-a-further-three-years-20221010/“>The ECB and PBoC have extended their currency swap deal for a further three years</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/china-covid-update-shanghai-requires-arrivals-to-take-3-covid-tests-within-3-days-20221010/“>China COVID update – Shanghai requires arrivals to take 3 covid tests within 3 days</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/uk-to-publish-medium-term-fiscal-plan-obr-forecast-to-october-31-20221010/“>UK to publish medium term fiscal plan OBR forecast on October 31</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/german-gas-commission-expert-russwurm-says-we-are-heading-towards-recession-20221010/“>German gas commission expert Russwurm says we are heading towards recession</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/ecbs-centeno-says-normalisation-of-monetary-policy-is-absolutely-needed-and-desired-20221010/“>ECB’s Centeno says normalisation of monetary policy is absolutely needed and desired</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/ecbs-knot-expects-significant-moves-by-ecb-will-be-needed-in-2023-to-get-inflation-down-20221010/“>ECB’s Knot – expects significant moves by ECB will be needed in 2023 to get inflation down</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/china-covid-update-highest-number-of-locally-transmitted-cases-reported-since-august-20-20221010/“>China COVID update – highest number of locally transmitted cases reported since August 20</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/reminder-its-a-canada-and-us-sorta-holiday-today-monday-10-october-2022-20221010/“>Reminder – it’s a Canada and US (sorta) holiday today, Monday, 10 October 2022</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/swiss-sight-deposits-of-domestic-banks-fell-for-the-week-ended-october-7-20221010/“>Swiss sight deposits of domestic banks fell for the week ended October 7</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/more-on-the-french-central-bank-cutting-its-economic-growth-forecast-20221010/“>More on the French central bank cutting its economic growth forecast</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/Education/what-is-market-volatility-and-why-you-need-to-consider-it-in-your-trading-20221010/“>What is Market Volatility and Why You Need to Consider it in Your Trading</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/china-hk-stock-markets-plunged-monday-10-october-2022-us-chip-restrictions-cited-20221010/“>China, HK stock markets plunged Monday, 10 October 2022 – US chip restrictions cited</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/more-on-the-boe-operation-to-calm-gilt-gbp-market-ready-to-increase-daily-purchases-20221010/“>More on the BoE operation to calm gilt, GBP market – ready to increase daily purchases</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/technical-analysis/bitcoin-technical-analysis-20221010/“>Bitcoin technical analysis</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/more-on-russian-missile-strikes-into-major-ukraine-cities-targeting-civilians-20221010/“>More on Russian missile strikes into major Ukraine cities – targeting civilians</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/ecbs-villeroy-says-the-ecb-is-working-to-bring-down-inflation-to-2-in-2-to-3-years-20221010/“>ECB’s Villeroy says the ECB is working to bring down inflation to 2% in 2 to 3 years</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/frances-central-bank-has-cut-its-q3-french-gdp-forecast-for-025-from-03-previously-20221010/“>France’s central bank has cut its Q3 French GDP forecast to 0.25% (from 0.3% previously)</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/bank-of-england-says-launching-temporary-expanded-collateral-repo-facility-20221010/“>Bank of England says launching temporary expanded collateral repo facility</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/2-shanghai-districts-have-closed-all-venues-due-to-covid-restrictions-imposed-monday-20221010/“>2 Shanghai districts have closed all venues due to COVID restrictions imposed Monday</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/Orders/fx-option-expiries-for-10-october-2022-at-the-10am-new-york-cut-20221010/“>FX option expiries for 10 October 2022 at the 10am New York cut</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/explosion-in-kyiv-reports-of-cloud-of-black-smoke-rising-from-buildings-in-citys-centre-20221010/“>Explosion in Kyiv, reports of cloud of black smoke rising from buildings in city’s centre</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/dutch-central-bank-says-high-inflation-could-persist-longer-than-models-now-predict-20221010/“>Dutch central bank says high inflation could persist longer than models now predict</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/g20-finance-ministers-meeting-12-13-october-co-ordinated-usd-intervention-speculation-20221010/“>G20 finance ministers meeting 12 & 13 October – co-ordinated USD intervention speculation</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/el-erian-fed-made-2-big-mistakes-thatll-go-in-history-books-spur-a-damaging-recession-20221010/“>El-Erian: Fed made 2 big mistakes that’ll go in history books, spur a damaging recession</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/trade-ideas-thread-monday-10-october-2022-20221010/“>Trade ideas thread – Monday, 10 October 2022</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/forexlive-asia-pacific-fx-news-wrap-moderate-negative-tone-kicks-off-the-new-week-20221010/“>Forexlive Asia-pacific FX news wrap: Moderate negative tone kicks off the new week</a></li></ul><p class=“western“>
It
was a significant session for news items.
</p><p class=“western“>Russia
sent missiles into Ukrainian cities, terrorising communities during
morning rush hour in apparent retaliation for the loss of its bridge
linking Russia to Crimea. Markets responded in a ‘risk off’
fashion. As I post Nasdaq futures on Globex are down around half a
percent, S&P500 futures are down around 0.4%. Major FX has fallen
against the US dollar.</p><p class=“western“>From
the UK we had the news that Chancellor Kwarteng will announce his
fiscal strategy and economic forecasts on October 31, bringing the
plans forward by more than three weeks. Kwarteng is seeking to calm
volatile UK by bringing the date forward. He had been insisting it
was vital to have the date in November (the 23rd)
to allow the OBR to make a proper assessment, Guess not after all.
GBP has managed to bounce somewhat on the news.</p><p class=“western“>The Swiss National Bank cut overnight deposits by 30bn CHF.</p><p class=“western“>Chinese
and Hong Kong stocks slumped today; ongoing renewed COVID
restrictions and US chip bans cited (see bullets above).
</p>

This article was written by Eamonn Sheridan at forexlive.com.

<p>Bloomberg have a recap up, related to:</p><p class=“article-slot__title title top“><a target=“_blank“ href=“https://www.forexlive.com/centralbank/bank-of-england-says-launching-temporary-expanded-collateral-repo-facility-20221010/“ rel=“follow“ target=“_self“>Bank of England says launching temporary expanded collateral repo facility</a></p><p class=“article-slot__title title top“><a target=“_blank“ href=“https://www.forexlive.com/centralbank/more-on-the-boe-operation-to-calm-gilt-gbp-market-ready-to-increase-daily-purchases-20221010/“ rel=“follow“ target=“_self“>More on the BoE operation to calm gilt, GBP market – ready to increase daily purchases</a></p><p>Link is here (may be gated). In brief:</p><ul><li>The BOE said Monday it will launch a Temporary Expanded Collateral Repo Facility, or TECRF, that will run until Nov. 10 to help banks ease pressure on the so-called liability-driven investment strategies that many pensions use. </li><li>Banks could therefore accept more types of assets as collateral from the LDI funds and turn to the BOE to convert those assets into cash.</li></ul><p>Cable update:</p>

This article was written by Eamonn Sheridan at forexlive.com.