Developed macro
1. French government announced additional austerity measures aimed at bringing EUR17.4Bn in the period until 2016, from which EUR7Bn as soon as in 2012.
2. Italian government faces an important technical vote on 2010 Budget today.
3. UK industrial production to contract in September.
Interest rate strategy
1. Faced with continuing political turmoil and poor liquidity in the periphery markets, core yields are bouncing near their all time lows.
2. In Greece and Italy, particular, the bond markets are in the thrall of domestic political developments.
3. Core supply today includes 2016 ad 2021 Austrian paper and 2021 Dutch paper.
FX strategy
1. USD: Risk aversion led run higher to continue.
2. EUR: Weak September data yet to impact fully.
3. NOK: Foreign demand overpowering official selling.
Emerging markets
1. Sentiment improves, supporting Asian FX; rates could be paid up but investors still mindful of possible monetary easing
2. Thailand: floods impact to be at least 2-3 ppt on 2011 growth, with further downside
3. Exports in Asia may suffer from another supply-chain disruption
Commodity markets
1. Gold firmer on solid safe-haven buying amid fears of potential systemic risk…
2. …Silver is struggling as rallies will attract selling.
3. Base metals are sidelined by Eurozone events and ongoing MF Global fallout.
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CORPORATE AND INVESTMENT BANK