BoJ easy again, USDJPY / Powell's risks for Q4 / Bond losses / Earnings season upon us

TSLA is expected to announce its Q3 deliveries today, expected top be a miss on estimates due to planned factory shutdowns and soft demand, which resulted in the EV maker discounting prices. Miners will be in focus too, after GS reported that China's demand for Copper rose 8% YoY and Iron Ore 7%, higher than recent expectations (Chinese iron ore inventories at the ports are now close to seven year lows…) >>> Going to be 'choppy' into earnings reports, also note FED's Powell last week outlined again some of the risks ahead for Wall Street, namely strikes, government shutdown (avoided for now, pushed back 45days..), resumption of student loan payments, 'high for longer' funding for mortgages and credit cards and potentially an oil price shock (which no.one really wants, so the Saudis/OPEC+ will probably want to avoid it !)..

The US government has avoided a federal shutdown after both House and Senate agreed on a short-term funding deal. A bill ensuring funding until 17 November received overwhelming support, and was signed into law by President Joe Biden minutes before a deadline. No limit, no brake on spending >> was it not Hartnett who said ?“markets stop panicking when politicians start panicking.” Absolutely nobody in Washington is panicking about deficits.

The Panama Canal is reducing the maximum number of ships allowed to travel the waterway to 31 per day due to a drought that has cut the supply of fresh water needed to operate the locks

“The damage in bonds has been more severe and more sustained than for equities and you can’t help wondering where the real damage is. You can’t have this much value destruction in bonds without there being some stress somewhere:” DB’s Jim Reid, BoA and many other research groups made similar comments last 20days..

New $4B Panasonic electric vehicle (EV) battery factory in Kansas requires so much power that the facility will need its own COAL plant to run - not even kidding..

Plus ca change..The Bank of Japan said on Monday it would conduct additional bond buying operations, seeking to slow a rise in yields after the benchmark reached its highest in a decade >>> do they want USDJPY to the moon ?

CBOE Volatility index VIX, has closed uner 19 for nearly 90 consecutive trading days

SILVER rallied a few pct on Friday initially....and got chopped nearly 10pct on Friday late, amazing 'price action'^, metals softer together with USD and US yields higher

USD picks up day 1 of Q4, with some strength, after 'quarter-end' light weakness, should higher, be supported together with duration, 'high(er) for longer UST yields

Equity markets held into quarter-end similar price action to UST 10's, a little of buying for the rebalancing, but note 10's UST back already to 4.62%

UST's : higher and steeper looks to remain the name of the game

Overall, would remain tactically light in risk, be ready for new investment opportunities in Q4 2023, we have our strategy ready to get into quality risk at better levels for our clients, the higher for longer is beginning to byte, should hardly be a surprise, but markets will be eager to check consumer strength during earnings reports and any indication from corporate that USD strength and financing costs hard to deal with