Morgan Stanley

If the last three days all started with a rout in futures before the US market open only to ramp higher all day, today it may well be the opposite, when shortly after Europe opened it was the ECB's turn to talk stocks higher, when literally within minutes of the European market's open, ECB's Coeure said that:

• COEURE SAYS ECB WILL START WITHIN DAYS TO BUY ASSETS

Which was today's code word for all is clear, and within minutes US futures, which until that moment had languished unchanged, soared by 25 points. So will today be more of the same and whatever early action was directed by the central bankers will be faded into a weekend in which only more bad news can come out of Ebola-land?

Because every banana republic democracy deserves its fair, impartial, independent and objective media.

• Dallas County May Declare State of Disaster From Ebola Virus (BBG)
• Markets on edge after worst turmoil in four years (Reuters)
• Central bankers may have no quick fix as markets swoon, economy weakens (Reuters)
• Risk of Deflation Feeds Global Fears  (Hilsenrath)
• U.S. health official allowed new Ebola patient on plane with slight fever (Reuters)
• Texas Hospital Fights Allegations About Ebola Protocols (BBG)
• Treasuries Gain as Oil Drops Below $80 While Stocks Slide (BBG)
• Greek Bonds Slump on Bailout Concern as Spain Misses Sale Target (BBG)
• White House shifts into crisis mode on Ebola response (Reuters)
• Obama Confronts Slippery Slope as Islamic State Advances (BBG)

• M&A Bubble is bursting: AbbVie Says It Reconsiders Merger Pact With Shire (WSJ)
• Winner of bad headline timing award: Spinoffs Could Set Stage for Next Merger Wave (BBG) - and now wait for the spinoffs getting pulled
• Record mortgage settlement pushes Bank of America into third-quarter loss (Reuters)
• Korea joins the Japan currency war: Bank of Korea Cuts Base Rate (WSJ)
• Double Irish’s Slow Death Leaves Google Executives Calm (BBG)
• Global Oil Glut Sends Prices Plunging (WSJ)
• Slow Rise in Prices Shows China’s Economy Is Still Struggling (WSJ)

• No Happy Ending for Investors in Central Bank Fairy Tale (BBG)
• Ebola Response Strains Hospitals (WSJ)
• Obama, foreign military chiefs, to thrash out Islamic State plans (Reuters)
• Draghi’s ‘Whatever It Takes’ Plan on Trial at EU Court (BBG)
• Too-Big-to-Fail Banks Face Up to $870 Billion Capital Gap (BBG)
• Iran’s Message to World: You Need Us to Fight Islamists (BBG)
• Facing new oil glut, Saudis avoid 1980s mistakes to halt price slide (Reuters)
• Ukraine Grannies Outprice Banks on Hryvnia Black Market (BBG)
• HK police use sledgehammers, chainsaws to clear protest barriers, open road (Reuters)
• Gazprom Quarterly Net Rises 13%, Misses Estimate on Ukraine Debt (BBG)

Today US activity will be very light given the Columbus Day holiday. As DB summarizes, we have a relatively quiet day for data watchers today but the calendar will pick up tomorrow and beyond with a big focus on inflation numbers amongst other things. Indeed tomorrow will see the release of Germany’s ZEW survey alongside CPI prints from the UK, France and Spain. Wednesday’s data highlights will include the US retail sales for September, the Fed’s Beige Book, CPI readings from China and Germany, US PPI, and the NY Fed Empire State survey. Draghi will speak twice on Wednesday which could also be a source for headlines. On Thursday, we will get Industrial Production stats and the Philly Fed Survey from the US on top of the usual weekly jobless claims. European CPI will also be released on Wednesday. We have the first reading of October’s UofM Consumer Sentiment on Friday along with US building permits/housing starts. Yellen’s speech at the Boston Fed Conference on Friday (entitled “Inequality of Economic Opportunity”) will also be closely followed.

With futures slamming the lows at their open yesterday evening, touching levels not seen since May, and with the EuroStoxx 50 officialy entering correction just hours ago, down 10% from the June highs, many were wondering if the NY Fed's Chicago Trading Desk, aka Overnight Ramp Capital LLC, would be put in damage control duty and send futures right back to unchanged (because with new Ebola patient alerts springing up everywhere from Boston to Los Angeles, the pandemic is clearly contained). The answer, with a whopping 20 point levitation on no volume, and futures which are pointing now well into the green (not to mention the Eurostoxx rebounding off the lows and now green too), is a resounding yes (thank the  AUDJPY, which is over 100 pips off the overnight lows and back over 94).

• Five U.S. airports to screen for fever (Reuters)
• Danger, central banks trading with each other: Bipolar U.S. Stocks See Biggest Mood Swing in Three Years  (BBG)
• Draghi Policies Blunted in Berlin as German Protests Grow (BBG)
• White policeman kills black teen in St Louis, triggering fresh protests (Reuters)
• Au Revoir to France’s Welfare Model as Socialists Cut Spending (BBG)
• Here comes Roberto Cavalski (Reuters)
• There are 49 U.S. venture-capital-backed companies with a valuation of $1 billion or more—the highest number on record (WSJ)
• Pressure mounts on Hong Kong leader over payout amid crisis (Reuters)

• IRELAND SELLS 10-YEAR BONDS AT RECORD-LOW YIELD OF 1.63%
• GERMAN 10-YEAR BUNDS RISE; YIELD FALLS 2 BASIS POINTS TO 0.88%
• DUTCH 10-YEAR GOVERNMENT BOND YIELD DROPS TO RECORD-LOW 1.021%
• PORTUGUESE 10-YEAR BOND YIELD DROPS TO RECORD-LOW 2.942%
• FRENCH 10-YEAR GOVERNMENT BOND YIELDS DROP TO RECORD-LOW 1.214%
• U.S. 10-YEAR NOTE YIELD DROPS TO 2.296%, LOWEST SINCE JUNE 2013
• SPANISH 10-YEAR BOND YIELD DROPS TO RECORD-LOW 2.038%
• FINNISH 10-YEAR YIELD DROPS TO 1% FOR FIRST TIME ON RECORD

• Turkey says Syria town about to fall as Islamic State advances (Reuters)
• Only now? Growth worries grip stocks, oil (Reuters)
• Hong Kong Protest Leaders ‘Furious’ at Agenda for Talks (BBG)
• Earthquake Damages Thousands of Homes in Southern China (BBG)
• Keystone Be Darned: Canada Finds Oil Route Around Obama (BBG)
• Where Is North Korea's 31-Year-Old Leader? (BusinessWeek)
• Australia to Revise Employment Data (WSJ)
• Americans Living Longer as Fewer Die From Heart Disease, Cancer (BBG)
• A 401(k) Conundrum: Can You Make Cash Pile Last for Life?  (BBG)
• China Services Sector Slows in September (WSJ)

And it all started off so promisingly, when after the biggest selloff in US stocks in two months, the BOJ and its preferred banks once again sold 6J (i.e., bought USDJPY) in the morning Japan session (while collecting CME liquidity rebates of course), sending the pair from below 108 to half the way to 109, and naturally taking global futures higher while pushing yields lower when as ITC says a "large TY seller knocked USTs to lows during the session" - hmmm, wonder who the large seller was. And then... the "rebound euphoria" fizzled a la Sodastream, sending the Nikkei sliding 1.2%, and US equity futures back to unchanged with the bond surge returning and sending German Bunds to new all time highs once again, while the Dax briefly broke below under 9000 before stabilizing at the key support level. It is unclear what caused the failure in central bank euphoria, although some suggest that the latest bevy of disappointing economic news wasn't quite bad enough.

• Ebola Patient Fights for Life as Contacts are Monitored (BBG)
• GPIF Unlikely To Announce New Portfolio Until November: Delay Could Rattle Investors Hoping Fund Will Invest More in Stocks (WSJ)
• High risk Ebola could reach France and UK by end-October, scientists calculate (Reuters)
• Neves to Face Rousseff in Brazil in Surprise Comeback (BBG)
• Hong Kong democracy protests fade, face test of stamina (Reuters); A Hong Kong Protest Run on Fumes and Instant Noodles (WSJ)
• Putin Clans Said Gridlocked Over Arrest as Sanctions Bite (BBG)
• Surging dollar may be triple whammy for U.S. earnings (Reuters)
• Lloyds Said to Cut Thousands of Jobs as CEO Cuts Costs (BBG)

For the US, it’s now shooting fish in a barrel – but just for now. The three-pronged plan the Fed has started to execute is plain for everyone to see... And it will have the rest of the world begging for mercy.

"Despite the low level of interest rates, mortgage affordability for first-time buyers remains roughly at the long-term average levels whereas the aggregate home buyer's affordability remains well below the long-term average. As the servicing of student loan debt is part of the Debt-To-Income calculation, the new regulatory (Bernanke-busting) regime compounds the already substantial challenges confronting the first-time home-buyer's access to mortgage credit. We believe the average student debtor is likely unable to secure a typical home mortgage due to their debt-to-income ratio."

• How you know it is all a lie: Pelosi Presses Obama to Talk Up Stronger U.S. Economy (BBG)
• Secret Goldman Sachs Tapes Put Pressure on New York Fed (NYT), Uh, no they don't
• Clashes Break Out at Hong Kong Protest Site (WSJ)
• N.Y. Fed Lawyer Says AIG Got Billions Without Paperwork (BBG)
• Ebola’s Disease Detectives Race to Track Others Exposed (BBG)
• UPS, FedEx Want Retailers to Get Real on Holiday Shipping (WSJ)
• No more mailman at the door under U.S. Postal Service plan (Reuters)