Daily Market Color October 18, 2024Global Developments Headline a Quiet Day for U.S. Economic News Rates grind lower in a relatively quiet session. Swap rates fell 1-3 bps across the curve today in a slight reversal of yesterday’s retail sales driven rise. On the week, rates were roughly unchanged, with the sharpest move (+3-4 bps) coming from the long end of the curve. Meanwhile, crude oil continued its decline today, with Brent and WTI down over 1.70% to $73 per barrel and $69 per barrel, respectively. The move comes as the world awaits a potential retaliatory attack by Israel against Iran and just after Israel announced the death of Hamas leader Yahya Sinwar. Bank of Japan (BoJ) expected to hold rates in October. Ahead of the BoJ’s October 31st policy meeting, anonymous sources told Bloomberg that central bank officials aren’t in a rush to hike rates. The sources said that central bankers expect inflation to remain in-line with projections and expect to hike rates at a later date. They also highlighted US economic and political risks as major items to monitor prior to deciding on another hike. The comments confirm the findings of a recent Reuters survey in which most surveyed economists expected the BoJ to forego another rate hike in 2024. The news also follows a recent announcement by newly elected Japanese Prime Minister Shigeru Ishiba who said earlier this month that the Japanese economy is not ready for more rate hikes. New China stimulus programs commence. The People’s Bank of China (PBOC) announced the start of the share buyback and equity swap facility programs today. The former offers 300B yuan in low-interest loans to fund share buybacks while the swap facility provides liquidity from the PBOC to purchase equities. According to the PBOC, initial applications for the swap facility have already exceeded 200B yuan. The announcement came just after new data showed that GDP growth slowed to 4.6% in Q3 from 4.7% in Q2, the lowest level since Q1 2023.
