Overview:A poor reception to the30-year Treasury sale and Federal Reserve Powell pledged to raise rates again, if necessary, not exactly a new ground, but it spooked the doves--driving rates sharply higher and fueling a strong dollar recovery. There was a large five basis point tail on the bond sale. The eight-day rally in the S&P 500 and nine-day advance in the NASDAQ was snapped like dry kindling. The S&P 500 comes into today down on the week.
This translated into a stagnant British economy in Q3 rather than the small contraction expected. The light from the economy is dim: Consumption fell by 0.4% quarter-over-quarter after growing by 0.5% in Q2. Government spending, which jumped to 2.5% in Q2, contracted by Q3. Investment, both in in terms of fixed capital formation and overall business investment , were weaker than expected. The median forecast in Bloomberg's survey looks for another couple of quarters of stagnation.