Security concerns stymie dollar adjustment
OVERNIGHT NEWS
# Euro and CEE FX, bond yields rebound after missile incident in Poland yesterday. Debris linked to Ukraine air-defence system. Poland likely to invoke NATO Art 4 today at Ramstein meeting, demand consultation with North Atlantic Council.
# Day ahead: US retail sales and industrial production, Fed speakers Williams, Barr, Waller. ECB speakers Lagarde, Muller, Villeroy, Panetta. BoE’s Bailey. CPI for Canada and Czech, Russia 3Q GDP. Germany and US benchmark auctions.
# UK CPI accelerates to 11.1% yoy in October vs 10.1% in September, above forecast. Core steady at 6.5%. Goods up to 14.8% yoy, services climb 6.3%.
# Nikkei +0,1%, Euro Stoxx futures flat, EUR 10y IRS unchanged at 2.81%, Brent crude -1% at $92.9/b, Gold flat at $1,772/oz.
Peak bond yields? Decline of 10y UST yield below fed funds mid rate could be an inflection point
COP – USDCOP fell through 4,800 level on open after a long weekend and reached a low of 4734.75. The pair rallied afterwards and reclaimed 4,800 level while the rest of EM FX has seen an accelerated pace of inflows. Flow wise, our local trader Santiago Calvache has seen mainly corporate inflows in this morning session. On local data, September Trade Balance prints at -$1401.1M (BBG Surv -$1150.0M, prior -$2168.2M). Q3 GDP beats estimate with QoQ at 1.6% (BBG Surv. 0.5%) and NSA YoY at 7.0% (BBG Surv. 5.7%).
