Bonds & Stocks
Treasuries, slightly cheaper across the curve, under perform European bonds as markets brace for a busy session that includes Federal Reserve rate decision and ongoing Asia trade negotiations. Over next two days, quarterly results reports from US technology giants Microsoft Corp., Alphabet Inc., Meta Platforms Inc., Amazon.com Inc. and Apple Inc. are scheduled, with US equity benchmarks at record highs. US yields at 1bp-2bp cheaper across a slightly steeper curve, the 10-year near 3.99%, trailing German and UK counterparts by 1bp and 2bp. S&P 500 futures are up 0.2%, NASDAQ 100 futures 0.4%. Fed-dated OIS contracts fully price in a 25bp rate cut for today’s policy announcement and a combined 47bp by year-end, a period including just one additional decision in December.
Economy
US mortgage rates fell to a fresh one-year low, encouraging more homeowners to refinance and drawing prospective buyers into the market. The contract rate on a 30-year mortgage fell 7 basis points to 6.3% in the week ended Oct. 24, according to Mortgage Bankers Association data released Wednesday. The group’s measure of refinancing jumped to the highest level since mid-September, and the index of home-purchase applications rose for the first time in five weeks. The drop in mortgage rates — if sustained — stands to potentially lull the housing market out of its years-long slumber.
World
China has bought at least two cargoes of US soybeans, its first known purchase this season, which may mark a revival of flows as part of a wider settlement expected to be agreed between the two biggest economies. Chinese and US officials reached a broad framework agreement over the weekend, paving the way for Chinese leader Xi Jinping and US President Donald Trump to finalize a trade deal that would roll back many of the tariffs, fees, and export restrictions. This agreement could restart a trade that was worth more than $12 billion last year, reopening access to the world’s largest consumer of soybeans to US growers who have faced prolonged financial strain.