Abstract from Song Seng Wun(an economist at CIMB bank) : > Due to a mixed bag of macro data at the start of the week, especially the mfg PMIs readings, mkt participants were in risk-on mood amid bets that central banks around the world & especially the Fed, could soon slow the pace of monetary policy tightening on hint of a slowing economy. RBA, the Aussie's central bank added to that sense of expectations, surprising everyone by raising its key interest rate by a smaller-than-expected 25 bps on Tue, defying expectations of a 50 bps hike. The US$ & global bond yields fell.

> However, sentiment changed mid-week after the Kiwi central bank, RBNZ raised its benchmark interest rate by 50bps during its Oct policy meeting, the 5th half-point rate hike, in line with expectations. Also, services PMI readings & ADP employment figures for Sep came in stronger-than-forecast while Fed officials reiterated the Fed’s house view that inflation remains problematic, and that the US central bank would stay the course, keeping interest rates higher for longer. The US$ & Treasury yields rose. Global equities fell.

> Crude oil prices climbed steadily tru the week after OPEC+ agreed to cut oil output by 2 mn bpd. That accounts for 2% of global supply, and are the steepest cuts since the pandemic, further stoking the inflation debate (actual cuts likely to be smaller).

> Not all bad news. The UN FAO Food Price Index eased in Sep for a 6th straight mth of falls after hitting a record high in Mar.

> Then it was totally "risk-off" mood on Fri after the stronger-than-expected US Sep jobs report locked in expectations that the US central bank is not ready to pivot from its current plan of steady of rate hikes. The US$  & global bond yields rose. Tech stocks also affected this week after Samsung and AMD flagged a downturn in semiconductor demand.

> Investors will now turn to qtrly corporate earnings kicking off next wk, as well as Thu's US Sep CPI data. There is also a new set of growth & inflation forecast from the IMF. In July, the IMF cut its global growth forecast for this year and next, warning that the world economy may experience a couple of qtrs or more of economic contraction next yr - technical recession. 

> And here's a recap of Fri’s key markets moves: 07 Oct’22

Stocks…

-S&P 500 fell 2.8% Fri but rose 1.5% on wk

-Nasdaq fell 3.8% Fri but rose 0.7% on wk

-DJIA fell 2.1% Fri but rose 2% on wk

-Stoxx 600 fell 1.2% Fri but rose 1% on wk

-DAX fell 1.6% Fri but rose 1.3% on wk

-FTSE 100 fell 0.1% Fri but rose 1.4% on wk

-MSCI World index fell 2.5% Fri but rose 1.6% on wk

-MSCI Asia Pacific ex-Japan index fell 0.5% Fri but rose 2% on wk

-Nikkei 225 fell 0.7% Fri but rose 4.6% on wk

-Hang Seng fell 1.5% Fri but rose 3% on wk

-Mainland Chinese markets are closed for the Golden Week holiday

-ASX 200 fell 0.8% Fri but rose 4.5% on wk

-KOSPI fell 0.2% Fri but rose 3.6% on wk

-STI fell 0.2% Fri but rose 0.5% on week

Currencies…

-DXY Dollar Index rose 0.5% Fri & 0.6% on wk to 112.8

-Euro fell 0.5% Fri & 0.6% on wk to US$0.9744

-British pound fell 0.7% Fri & 0.8% on wk to US$1.1086

-Japanese yen fell 0.1% Fri & 0.4% on wk to 145.25 per US dollar

-Aussie dollar fell 0.5% Fri & 0.4% on wk to US$0.6375

-S’pore dollar fell 0.2% Fri but gained 0.2% on wk to 1.4322 per US dollar

Bonds…

-US2Y Treasuries rose 5 bps Fri & 3 bps on wk to 4.31%, highest since 2007

-US10Y Treasuries bps rose 6 Fri & 6 bps on wk to 3.88%, levels last seen in 2010

-US10Y-2Y yield gap was little changed Fri but narrowed by 2 bps on wk to 43 bps, the 69th consecutive session of yield inversion

-Germany’s 10Y yield rose 11 bps Fri & 9 bps on wk to 2.19%

-Britain’s 10Y yield rose 7 bps Fri & 15 bps on wk to 4.24%

-Japan’s 10Y yield was little changed Fri & wk at 0.25%

-Bloomberg Global Bond Index fell 0.6% Fri & 0.4% on wk, the lowest since 2011

Commodities…

-Brent crude rose 3.7% Fri & 11.3% on wk to US$97.92 a barrel, a 6-wk high

-Spot gold fell 1% Fri but rose 2.1% on wk to US$1694.82 an ounce

-Bloomberg Commodity Spot Index rose 0.4% Fri & 5.1% on wk

-LMEX metal prices index fell 2.1% Fri but rose 1% on wk, 2nd wkly gain

Others…

-WCI container freight rates fell 8.1% w-o-w & 63.6 % y-o-y on 7th Oct 2022, the 37th weekly decline to US$3689 feu. The record high was just over a year-ago, at US$10,377.19 per Forty Foot Container on 23rd Sep’21.

-Bloomberg Galaxy Crypto Index which measures the performance of the largest cryptocurrencies traded in US$ fell 2.3% Fri & 0.6% on wk

-Chicago Board Options Exchange Volatility Index, VIX rose 2.8% Fri but fell 0.8% on wk to 31.4