The apocalypse is on hold.
Although the human suffering will no doubt be profound, damage estimates from Hurricane Irma are already being rolled back on Sunday evening as the worst case scenario doesn’t seem to have materialized.
Similarly, Kim hadn’t launched any more ICBMs as of early Asian trading and that prompted the yen to fall versus all its G-10 peers out of the gate. Equity futs rose and gold fell. “The market was already braced for a mammoth hurricane at the end of last week and the pricing of another Fed rate hike any time soon has already dwindled, so there’s scope for a brief relief rally in the greenback and risk assets,” Bloomberg’s Ben Purvis wrote on Sunday evening before warning that “the situation [in North Korea] is on tenterhooks still [and] Monday’s UN Security Council meeting on the rogue state is lining up to be divisive.”
“America will pay due price if it ends up imposing harsher sanctions at the United Nations Security Council on North Korea,” Pyongyang’s Ministry of Foreign Affairs said in a statement, adding that Kim is “ready [and] willing to use any form of ultimate means.”
So you know, there’s that.
Besides the hurricane cleanup and North Korea there are a couple of more notables to look out for in the week ahead. We’ll get the BoE where, as always, the focus will be on the vote count. “We expect a 7-2 vote to leave rates unchanged [but] that said, given the GBP depreciation since the August meeting, we expect rhetoric to be less dovish and with the potential to challenge current rate hike pricing upwards,” BofAML wrote over the weekend, before reminding you that “the relevance of such rhetoric is purely confined to market communication [as] we continue to not expect a rate hike before 2019.”
“We expect no rate change on a 7-2 vote,” Goldman chimes in. “Overall, we expect the Committee to reiterate that ‘monetary policy could need to be tightened by a somewhat greater extent over the forecast period than the path implied by the yield curve’ but without adding significantly to the urgency for an immediate rate rise beyond the 2 votes for a rate hike.”