CNY could be set to weaken in short term

Macroeconomic environment France : industrial production increased by 0.3% mom and by 1.6% yoy in August. UK: industrial production decreased by 0.2% mom in August, output in the construction industry by 0.7%. US: producer prices increased by 2.6% yoy in September (prior: +2.8%) . Equities European equities closed in the red on Wednesday, the Stoxx 600 losing 1.6%, dragged lower by techs (-4.91%) and basic materials (-3.63%). As for the CAC 40, it shed 2.11%, with heavy falls by techs (-4.91%) and consumer goods (-5.81%). US equity markets declined sharply by more than 3% . The S&P 500 fell by 3.3% with heavy trading in S&P 500 puts (Dec 18 maturity). The VIX (23%) leapfrogged the V2X (18.4%) , with the curve in pronounced backwardation (the most since last April). Bond markets / Derivatives On Wednesday, the sell-off on the stock market had no impact on the 10-year German and little early on Treasuries. It was only at the end of the day that Treasuries ended up bouncing off the safe haven, with the 10-year US rate falling from 3.24% to 3.15%. This morning, long German rates were down 5bp on the 10-year segment maintaining a widening of spreads vis-à-vis peripheral debts, the BTP / Bund appearing at 302bp. Money markets / Central banks After the steep fall of the stock markets last night, the Eurodollar, Euribor and Libor sterling curves have significantly flattened significantly. Evans of the Fed hinted that the Fed could take a monetary break from 3% on key rates. FX Generalized decline in the dollar against a background of falling stock markets. The JPY and CHF are rising as they play their safe haven role as currencies such as AUD, NOK and CAD are down. Asian currencies were down this morning, especially the KRW. Commodities Crude oil prices corrected sharply after hurricane Michael passed to the east of the oil and gas offshore platforms in the Gulf of Mexico. At the same time, demand for gasoline could fall as traffic will grind to a halt in the south east until the storm passes.