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Belgian statistical agency (Statbel) reported that the Belgian consumer price index declined by 0.69% M/M in September, reducing the Y/Y measure for headline inflation to 2.39% from 4.09% in August.
In a repeat of previous sessions, the core bond sell-off slowed and even went slightly into reverse during a rather dull European trading session. The peace lasted again until the start of US trading when Treasuries started slipping away without strong trigger. Intraday US yield changes are currently close to zero compared to yesterday’s record closing highs, but they are pushing for a break above 5% (2-yr), 4.5%(5-yr), 4.34% (10-yr) and 4.42% (30-yr).
The US debt ceiling stalemate remains firmly in place with US Treasury Secretary Yellen’s warnings proving futile for the moment. Apart from the US T-Bill and CDS market, the overall market impact remains low even as we’re only a fortnight away from the assumed “X-date”. Previous debt ceiling episodes learnt that a solution will eventually follow. Today’s eco calendar is extremely thin with only US housing starts and building permits.
Outlook: Today is going to be a day of clearing up multiple messes, as though the global economy was a roomful of toddlers and toys (and dirty diapers