- Treasury yields ended lower overnight despite stronger US growth, as disappointing tech earnings weighed on sentiment. Alphabet led the equity sell-off following its Q3 earnings release on concerns about recouping AI and data-related capex, with the 10yr falling 8bps to 4.94% and the 2yr 9bps to 4.65%.
- US growth accelerated in Q3, driven by strong household consumption and a further surge in non-residential investment as AI-related capex continued to build, while the September PCE price index rose 0.5%, broadly in line with expectations. Against this backdrop of robust activity, the risk of demand-pull inflation is keeping the case for further Fed tightening alive.
- The ECB held rates at 2.50% but kept a hawkish tone with oil elevated at US$116/bbl, and markets are pricing around an 85% chance of a hike to 2.75% in December.
- Looking ahead: In Australia, producer prices and private sector credit are due today.
