Traders await US Inflation test

The Federal Reserve Bank minutes revealed that a “substantial majority” of Fed officials voted for the 50-basis point rate cut at last months meeting.

Markets are now pricing in an 82% chance of a 25-basis point cut next month, after last Friday’s strong US Non-Farms data as investors scale back expectations on large cuts in policy.

Today sees the US Inflation report released this afternoon for further insight into the Fed’s rate cutting path, we are expecting core inflation to hold firm at 3.2% however any number above this would see expectations for the rate cut in November dampen and yields extend their gains. Should the report post a lower figure than we could well see a risk back drop with larger reductions back on the table.

UK GDP will be released tomorrow, a good indicator of how the economy is performing, where we are expecting a 0.2% gain ahead of the budget on Oct 30th. Rachel Reeve’s capital gains tax plans in the upcoming budget are causing a flurry of sellers in the housing market as the headline index rose to 11 in Sept, from zero in August. Prospects of further base rate reductions from the Bank of England are also fueling the market. Reeve’s in under pressure to meet Labour’s pre-election promises by reportedly having to come up with ￡25bn more in tax rises to meet her commitments, Starmer has reportedly made plans to raise national insurance with Britain’s highest earners set to pay the price.

James Cleverly was surprisingly knocked out of the Tory leadership race yesterday, the front runner was eliminated leaving a head to head battle between former business secretary Kemi Badenoch and ex-immigration minister Robert Jenrick.

Oil has continued to make gains as tensions in the Middle East continue to escalate, Syrian reports are saying that ‘Golan Heights’ member was killed overnight by Israeli air strikes.

Hurricane Milton has caused devastation across Florida as it made landfall overnight, the deadly storm has already caused significant power shortages and tornadoes across the state, with Tampa Bay taking the brunt of the destruction.

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