Thursday October 20

Stocks drifted downwards as corporate earnings season continued and the ECB did not give any updates to monetary policy. The S&P 500 fell 0.1% to 2,141 and the Dow Jones lost 0.2% to 18,162. Economic data today showed that jobless claims came in slightly higher than expected however still remain at a very low level. The KBW Bank index rose 0.6% outperforming the market for the second consecutive day. In Europe the ECB left interest rates unchanged with the deposit rate at -0.40%. The central bank maintained its QE program at e80bn per month but Mario Draghi said that him and ECB governing board members had not discussed extending the program. In spite of these comments the German 10 year yield rallied 3bp to finish roughly around 0% today. In the US the short end of the yield curve rose relative to the longer end which could be an indication of monetary policy expectations. The two year yield rose 3bp to 0.83% and the ten year yield rose 1bp to 1.76%. Accordingly 2yr vs 10yr bear flattened to 0.93%. USD rose 0.4% against EUR to $1.0929. USD rose 0.3% against GBP to $1.2255. Oil prices sold off today. Both WTI and Brent fell 2.5% to $50.31 and $51.37 respectively.

Thursday October 20

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