WHAT HAPPENED OVERNIGHT IN THE US:

·         S&P -2.1%, extended 2-days’ losses to more than 5% as data reinforced Treasuries bid at expense of equities.

·         Sept CPI +2.3% y/y (from Aug 2.7%) spurred big buying of 10yr again, off another 4bps (at late low 3.1270%) - 14bps from mid-week high. 

·         But that sucked more cash out of equities. Breadth negative 13-1, largely indiscriminate – this time claiming more than just year-to-date winners.

·         Energy dropped with oil off nearly $5 from mid-week highs. Financials under pressure with yield curve flatter once again. Consumer stocks extended Oct losses to 10%.

·         But faint clues into the last hour that froth had blown off. Market rallied 180bps from lows while big techs had led Weds’ sell-off finished broadly positive.

 SOUTH AFRICAN NEWS:

·         Expect AllShare +0.75%. From SA close yday, gold +$2 ($1220), plat +$7 ($840), copper unch ($2.79/lb), oil -0.2% ($81.11), USDZAR -0.5% (14.55), S&P -1.2%.

·         Moody’s after hours likely to keep ratings on hold in another reprieve from WGBI expulsion. Although they had recently suggested flexibility to delay until MTBPS, they are more likely to compliment swift action in government to address allegations of corruption while risks from weak growth were largely addressed last month when they reiterated their view hadn’t “changed drastically”.

·         Asia bounce lifting S&P futures +1%. China +1.2%, wobbled early (another 2yr low) before rally took hold mid-session partly on stronger-than-expected Sept imports & exports.  

·         Hong Kong +2%, holding lunchtime with Tencent +6.8% at HKD 285 (20 bucks from mid-week lows) with a big step already now taken towards comprehensive de-rate. But much more upside from here likely capped by nos due Nov 15 amid expectations of weak gaming (Netease suite growing at a faster clip) and investment in cloud/AI/payments/content weighing on margins.

·         Australia +0.2%, more circumspect but had spent most of session under water. BHP +1.3% & Rio +1.9%, trimmed week’s losses – indicating London up 1%.

TODAYS KEY DATA POINTS:

·         8am: Germany Sept CPI final read

·         12.45pm+: JPM, Wells Fargo, Citigroup

·         2.30pm: US Sept Import/Export Prices

·         4pm: US Oct Uni of Mich Consumer Confidence