Daily Market Color October 26, 2015Appetite for Risk Takes a Pause as Investors Focus on Fed Stocks declined marginally while Treasury yields and swap rates rallied as we kick off an important week for investors with a cautious tone. The major event this week is the October Fed meeting, which concludes Wednesday, and is followed by the rate decision and release of the updated policy statement. Traders are pricing in a very small chance of a rate increase at this week’s meeting, but market-participants will look for a change to the Fed’s economic outlook in the policy statement. Other central banks remain in focus as well after last week’s dovish speech from ECB head Draghi and the People’s Bank of China’s rate cut, ahead of Friday’s upcoming Bank of Japan meeting. In addition to central bank speculation, investors will monitor a fairly heavy data calendar this week, headlined by Thursday’s update to US Q3 GDP. Today’s US economic data is light, with the exception of the new home sales report, which declined more than expected (-11.5%a vs -0.66%e). The market will also focus on corporate issuance and set-up for this week’s Treasury supply. The two-year note auction was postponed due to the proximity to the debt ceiling, but we still have five and seven-year auctions on the calendar.