Developed macro
1. Risk appetite took a hit on unexpected cancelation of the EU EcoFin meeting and soft US data
2. Both EU 27 and EU 17 meetings are taking place later today. It is still unclear whether EU leaders will be able to reach a comprehensive agreement today.
3. US: September New Home sales to increase 2.0%.
4. US: Durable Goods Orders to fall 1.0% on transportation. Ex-trans expected up 0.5%.
Interest rate strategy
1. Euro rates market move from cautious optimism to just cautious ahead of EU summit
2. ECB will announce allotment sizes for 3- and 12-month LTROs today
3. Italian CTZ and 5Y T-note auctions scheduled today
FX strategy
1. USD: Risk aversion rebound expected given persistent optimism.
2. JPY: Hits post-World War II high versus USD as Azumi warning goes unheeded.
3. CHF: Sharp correction makes sense given steep USD/CHF rally.
Emerging markets
1. Trading in Asia to be thin ahead of EU announcement
2. RBI signalled it is done with rate hikes
3. Liquidity remains tight in China…
Commodity markets
1. Gold to rally this week on the back of a stronger EUR.
2. Comex gold options expiry an influential factor.
3. Short covering boosts base metals as news flow is more positive.
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http://www.easyforexnews.net/wp-content/uploads/2011/10/WMT_2011-10-26.pdf
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