Brexit Update from JPM
JPM: As the threat of an October no-deal Brexit fades, a January no-deal event is a rising risk. Parliament passed a law forcing PM Johnson to request an extension by October 19 if no deal can be reached with the EU, and talks between the two sides show little progress. It looks likely that Johnson will either have to renege…[Read more]

Goldman Sachs:
1. GS estimates CTA/trend length is moderately net long again (~$75bn global eq), and expect some moderate near-term buying to continue in the baseline and most mkt scenarios to re-establish more long positions.

2. For the systematic macro community, more trend signals continued to turn positive last week – especially at the…[Read more]

JPM on ECB
1. ECB Rate decision(Slightly dovish): Overall the decision was mixed but in aggregate more dovish than anticipated (because of the forward guidance), especially following this week’s repricing by the market.

2. Rates(Hawkish): Smaller than anticipated cut(-10bps while markets were pricing approx. -14bps)

3. Forward Guidance(Very d…[Read more]

Citigroup says fade the banks:
1. Fade the rally – Bank share prices will likely reconnect with earnings

2. 2020E cons. EPS is -12% YTD vs SX7P +4%.

3. Deposit tiering and new TLTRO terms are minor positives, but largely offset by the rate cut. Overall consensus EPS risk is to the downside

4. We believe fiscal stimulus is required for

banks t…[Read more]

Morgan Stanley: More on MoMO sell-offs and subsequent equity performance
1. As of yesterday’s close, Momentum has posted a -15.9% move lower from its last peak on September 3 (five trading sessions have passed since).

2. Since 1999, there have been 11 instances where Momentum has moved lower by 15% or more in consecutive trading sessions.

3. On…[Read more]

Goldman Sachs:
Jan Hatzius:

1. Beyond September/October, we think the environment will become less supportive for further Fed rate cuts.

2. This is mostly because core PCE inflation will likely turn sharply higher on a year-on-year basis, for two reasons.

3. First, the current year-on-year rate is depressed by outliers to the downside in late…[Read more]

Why did US Banks rally 3.5%?
1. the bank complex traded very well on Mon and led its cyclical peers higher.

2. The fundamental driver for the strength was better-than-feared presentations from mgmt. teams at the Barclays conf.

3. Investors were worried about gloomy mid-Q updates given the trajectory of rates but that didn’t happen. Citigroup, C…[Read more]