Looking at the week ahead, the US election enters the home stretch and politics will likely dominate the headlines, especially the closer races in Congress. Despite data being overshadowed by politics, there are some key US releases coming up, with the first estimate of Q3 GDP, the employment cost index and durable goods the main focus.
Global stocks jumped around the globe, with Europe's Stoxx 600 and US equity futures rising more than 0.5% on a surge in merger announcements over the weekend including the $85 billion mega takeout of AT&T for Time Warner, the $6.4 billion acquisition of B/E Aerospace by Rockwell Collins, the $2.7 billion deal targeting Genworth by China Oceanwide and the just announced $4 billion purchase of Scotttrade by Ameritrade.
"These distorted markets are increasingly hostage to unfathomable political risk...the real danger in finance is the not one that tends to be discussed: that banks will topple over (as they did in 2008). It is, rather, the threat that investors and investment groups will be wiped out by wild price swings from an unexpected political shock..."
The key economic releases this week include industrial production on Monday, CPI on Tuesday, and housing starts on Wednesday. There are several scheduled speeches from Fed officials this week. The Beige Book for the November FOMC period will be released on Wednesday.
The Bank of England’s inept monetary policies under Mark Carney’s governorship seem certain to expose the fragility of fiat sterling to wider public attention and skepticism. If the consequences weren’t so serious, we might thank him for unwittingly toppling the status quo. But the inevitable crisis, many times worse than that faced in 1975, cannot be embraced even by the most extreme financial masochist. This is why people in Britain and America will increasingly find solace in gold.
In June, oil was still down 20% relative to a year prior. Last month, that year-over-year change had already risen to 0%. And if prices hold at current levels, oil will be up 45% at year-end. To repeat for emphasis, that’s -20% YoY to +45% YoY in the space of six months."
“I [Putin] want to give you [Hollande] this information. Greece asked us to print Drachmas because they have no longer a printer for this. I want to tell you that this [Grexit] is something that we do not want.”
French Prime Minister Manuel Valls, wants to transform the EU into the United States of Europe, complete with its own European defense force. “Member states have a choice: give up on the EU or transform it,” writes Manuel Valls.
In the US focus will be on the market's reaction to the second presidential debate, FOMC Minutes but also retail sales, import and producer prices and Michigan sentiment. We also hear from various Fed speakers throughout the week, and Chair Yellen gives a keynote speech on Friday.