Global market wrap: picture was mixed - ANZ

Analysts at ANZ New Zealand Bank explained, in a market wrap, that US equities opened sharply lower before rising in the New York afternoon. 

Key Quotes:

"However, at the time of writing the picture was mixed, with DJIA down 0.5% and S&P up 0.1%."

"Financials were leading gains with energy and consumer discretionary being hit. US treasury yields were up about 0.5-1bp across the curve ahead of the Fed minutes and USD rallied."

"So far, Fed minutes (released at 7am) have been digested with only minor market reaction."

"With Brussels not content with the Italian budget, risk was pared back after the surge in sentiment yesterday."

"Oil fell around 2% after a build in inventories was reported, helping lift USD/CAD back above 1.30 and driving NOK to be the worst performer in the G10."

"Gold was unchanged."

DATA/EVENT PULSE

Slowing:

"US housing starts came in at 1201k (mkt: 1210k; last: 1268k) with building permits at 1241k (mkt: 1275k; last: 1249k). Meanwhile, mortgage applications fell 7.1% last week (last: -1.7%) suggesting higher interest rates are impacting. With rates poised to rise further, the housing sector will remain under pressure and could be elevated as a risk to the outlook for the Fed over the coming months."

Wait and watch:

"UK CPI inflation came in below expectations at 2.4% y/y in September (mkt: 2.3%; last: 2.7%), with slowing food price inflation a key driver. Core inflation followed suit at 1.9% y/y (mkt: 2.0% y/y; last: 2.1%). Overall, the payback in September (up just 0.1% m/m) from August’s solid 0.7% m/m print should keep the Bank of England content that inflation remains contained – that’s not a bad place to be given Brexit negotiation deadlines are approaching."