Central bankers seem to go out of their way to express

EU Market Update: Central bankers seem to go out of their way to express dovish views to help calm the markets

Notes/Observations

- Central bankers seem to go out of their way to express dovish views to help calm the markets; risk appetite reponds

Key Economic Data in session

- (EU) EU27 Sept New Car Registrations: 6.4 v 2.1% prior (13th straight rise)

Fixed Income:

- None seen

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices [Stoxx50 +1.8%, FTSE 100 +1% at 6,265, CAC-40 +1.8% at 3,992, IBEX-35 +2.2% at 9,898, FTSE MIB +1.8% at 18,410, SMI +1.7% at 8,199, S&P 500 Futures +1.1% at 1,874]

- Market Focal Points/Key Themes: Equity markets open higher following declines on Thursday amid dovish central bank commentary, Profit warning weighs on Rolls Royce, Luxury retailer Jimmy Choo opens slightly higher after pricing IPO at lower end of range, US morning earnings (GE, Honeywell, Morgan Stanley)

By Sector

- Basic Materials/Resources [Yara International YAR.NO -0.9% (ended merger talks with CF Industries)]

- Industrials [Rolls Royce RR.UK -8% (cut sales outlook)]

- Technology [Gemalto GTO.NL -5% (competition concerns related to Apple SIM card)]

- Telecom [Elisa ELI1V.FI +7% (Q3 results above ests)]

- Stoxx50 sectors [Utilities +2%, Energy +2%, Technology +2%, Consumer Cyclical +1.9%, Basic Materials +1.8% Industrials +1.6%, Financials +1.5%,Telecom +1.4%, Consumer Non-Cyclical +0.8%]

Speakers

- BOE Chief Economist Haldane stressed that recent economic data favored a later BOE rate hike. He had a gloomier outlook on economy compared to just 3 months ago due to slower global growth and greater political and financial risks. Rates could stay lower longer without CPI risk. Mid-2015 rate hike perhaps not a bad bet by markets

- ECB's Weidmann (Germany) reiterates his criticism of ECB's asset purchases saying that it might transfer risk to taxpayers. Germany was not in need of more stimulus despite recent weak economic data.

- ECB's Nowotny (Austria) reiterated Council view that weaker EUR against USD was positive for economy and would help to boost Euro zone economy and raise inflation

- ECB's Coeure (France) stated that ECB would start making purchases soon to push balance sheet higher

- ECB's Constancio (Portugal): Balance sheet target cannot be easily predicted

- Poland Central Bank's Kazmierczak stated that he was against cutting interest rates in Nov; should wait-and-see impact of past easing

Currencies/Fixed Income:

- Risk appetite found its grove again after numerous central bankers seem to go out of their way to express dovish views to help calm the markets over the past 24 hours (Fed's Bullard, BOE Haldane and ECB's Coeure the most notable). Equity markets rebounded while peripheral yield finally edged lower. The USD was marginally softer against the European pairs as the NY morning approached.

- The GBP initially exhibited some weakness after BOE Chief Economist Haldane stated that recent economic data favored a later BOE rate hike. The GBP/USD fell to 1.6030 before recovering. Dealers noted that Haldane view was priced in as various analysts have already pushed back theirs calls for 1st BOE rate hike from Nov 2014 to Aug 2015 after UK Sept CPI hit a 5-year low at 1.2%

Political/In the Papers:

- (GR) ECB clarified it would adjust haircuts on Greece govt bonds and guaranteed govt bank bonds used as collateral for ECB loans

- (US) Fed's Bullard (moderate, non voter): Should evaluate a delay in ending the QE program; Fed needs to halt the decline in inflation expectations

- (JP) Japan BOJ Gov Kuroda: Reiterates view that BOJ to continue easing until 2% inflation target is stable

Looking Ahead

All times listed for economic events are denominated in Eastern Standard Time (Add 4 hours for GMT equivalent) d its

- (ES) Spain Sovereign Debt Rating might be published by Moody's

- (NO) Norway Sovereign Debt Rating might be published by Moody's

- (SI) Slovenia Sovereign Debt Rating published by Fitch

- EU, Asian Leaders hold Meeting in Italy

- (DE) German Fin Min Schaeuble speaks at Martens Centre Conference, Bratislava

- 05:30 (ZA) South Africa to sell I/L Bonds

- 06:00 (PT) Portugal PPI M/M: No est v -0.1% prior; Y/Y: No est v -0.9% prior

- 06:00 (EU) Eurostat release First GDP Estimates After ESA 2010 Adoption

- 06:00 (EU) ECB Announcement related to LTRO repayments: €4.0Be

- 06:05 (UK) DMO to sell combined £ in 1-month, 3-month and 6-month Bills

- 06:45 (US) Daily Libor Fixing

- 07:30 (TR) Turkey Central Bank (TCMB) Survey of Expectations

- 07:30 (IN) India Forex Reserves w/e Oct 10th: No est v $311.4B prior

- 08:00 (PL) Poland Sept Sold Industrial Output M/M: +14.5%e v -8.5% prior; Y/Y: +2.7%e v -1.9% prior; Construction Output Y/Y: No est v -3.6% prior

- 08:00 (PL) Poland Sept PPI M/M: 0.1%e v 0.3% prior; Y/Y: -1.5%e v -1.5% prior

- 08:00 (RU) Russia Sept Real Retail Sales M/M: -1.5%e v +2.7% prior; Y/Y: 1.5%e v 1.4% prior

- 08:00 (RU) Russia Sept Unemployment Rate: 4.9%e v 4.8% prior

- 08:00 (RU) Russia Sept Real Disposable Income: 2.7%e v 3.9% prior

- 08:00 (RU) Russia Sept Real Wages Y/Y: 1.2%e v 1.4% prior

- 08:00 (RU) Russia Sept Investment in Productive Capacity Y/Y: -3.0%e v -2.7% prior

- 08:15 (US) Baltic Dry Bulk Index

- 08:30 (US) Sept Housing Starts: 1.002Me v 956K prior; Building Permits: 1.035Me v 1.003M prior (revised from 998K)

- 08:30 (CA) Canada Sept CPI M/M: 0.1%e v 0.0% prior; Y/Y: 2.0%e v 2.1% prior; Consumer Price Index: No est v 125.7 prior

- 08:30 (CA) Canada Sept CPI Core M/M: 0.2%e v 0.5% prior; Y/Y: 2.1%e v 2.1% prior

- 08:30 (CA) Canada Sept CPI (Seasonally Adj) M/M: 0.1%e v 0.1% prior; CPI Core (Seasonally Adj) M/M: No est v 0.2% prior

- 08:30 (US) Weekly USDA Net Export Sales

- 08:30 (US) Fed's Yellen speaks at Boston Fed Conference on Inequality

- 09:00 (MX) Mexico Sept Unemployment Rate: 5.2%e v 5.2% prior; Unemployment Rate (Seasonally Adj): 4.8%e v 5.2% prior (revised from 4.9% prior)

- 09:55 (US) Oct Preliminary University of Michigan Confidence: 84.0e v 84.6 prior

- 11:00 (DE) German Bundesbank's Nagel in Frankfurt

- 11:45 (CA) Canada Fin Min Kenney speaks at Canadian Club

- 15:00 (US) API Monthly Statistical Report