Market Prognosis

A concise summary of the major macro events of the past 24 hours, and selected UK company-specific news.

October 27, 2023

Soft landing?

Macro & Overnight

US GDP and durable goods demand continue to indicate a strong US economy. However, the quarterly PCE data showed that inflationary pressures are being contained. The focus will move to the September PCE inflation data later today. The market expects a slight slowdown from 3.7% to 3.6% in the year-on-year measure, indicating a possible US soft landing.

With the ECB joining the central bank holding pattern on rate increases and Christine Lagarde citing tensions in the Middle East as a factor, bond investors continue to take over the job of tightening as global bond yields continue to edge higher. However, the benchmark US 10-year rate continues to shy away from the 5% level.

Oil prices firmed as US air strikes were reported in Syria. However, as long as its allies can persuade Israel from an all-out land invasion of Gaza, hope remains that the conflict can be contained to a regional level.


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