Five Things You Need to Know to Start Your Day: Americas

Treasuries rallied ahead of important US inflation data, traders parse the presidential debate aftermath and oil recovers from the lowest si [View in browser]( [Bloomberg]( Treasuries rallied ahead of important US inflation data, traders parse the presidential debate aftermath and oil recovers from the lowest since 2021. Here’s what’s moving markets. — [Kristine Aquino]( Slowing inflation [US consumer prices probably climbed in August at the slowest pace in more than three years](. The figures due on Wednesday are also expected to show a measure of core price gains that excludes food and energy held at the same pace as in July. The question for Federal Reserve policymakers is whether the data would prompt them to stick with a quarter-point interest-rate cut, or opt for a half-point reduction. Traders are fully pricing a smaller cut, while bracing for some possibility of a larger one. “Given building downside risks to the labor market and activity, the bar for a soft-enough CPI reading to price a larger start to rate cuts could be low,” Citigroup economists Veronica Clark and Andrew Hollenhorst wrote in a Sept. 9 report. Debate watch The data comes after another event closely watched by investors:[the US presidential debate, which put Republican Donald Trump on defense against Democrat Kamala Harris](. The initial sparring focused on the economy and immigration. Trump attacked Harris on border policy, while Harris emphasized her agenda was about “lifting up the middle class and working people of America.” The aftermath of the debate saw muted reaction from assets while betting markets shifted in favor of Harris, who also earned the [endorsement of billionaire pop megastar Taylor Swift](  What’s the Harris trade and what’s the Trump strategy? Bloomberg terminal clients can share their views of the candidates and their economic programs in an exclusive [MLIV Pulse survey](bbg://news/stories/SJEQ8ZT1UM0W). Yields, crypto The run-up to the inflation data and the aftermath of the debate has created several crosscurrents in markets.[Two-year Treasury yields slid on Wednesday to levels last seen in 2022]( as rate-cut expectations prevailed, while US equity futures drifted lower. Meanwhile, [bitcoin fell for the first time in five days]( the debate as betting odds favored Harris — who has yet to detail a policy position on crypto — over Trump, who has pivoted to courting the digital-asset sector after previously dubbing it a “scam.” Soft landing [Brent crude recovered after briefly slipping below $70 a barrel for the first time since late 2021](. The prospect of a descent toward $60 a barrel in 2025, raised by forecasters from Citigroup to JPMorgan and echoed on Monday by one of the world’s [largest commodities traders]( could further bolster the chances of the US and its peers weathering the effect of high borrowing costs without a damaging recession. “The probability of pulling off a soft landing would increase — that applies to Europe as well as the US,” said Tim Drayson, head of economics at Legal & General Investment Management. Yen advantage [The Japanese yen led gains among Group-of-10 currencies]( a Bank of Japan official said policymakers will continue to adjust policy provided the economy performs in line with projections. “I think that the degree of monetary easing will be adjusted if the outlook for Japan’s economy and inflation is realized,” said board member Junko Nakagawa. While her remarks were largely in line with the BOJ’s standing policy stance, they came at a time when investors are intensely focused on the narrowing of the interest-rate gap between Japan and the US. What We’ve Been Reading This is what’s caught our eye over the weekend. - [JPMorgan leads banks in offering downbeat outlooks]( on lending - The UK will see more than [$10 billion of investment from AmazonÂ]( - [Warren Buffett taps the brakes on sales]( of Bank of America shares - Buyout deal prompts [Blackstone to sell mortgage bonds]( - [Sam Bankman-Friend’s ex-girlfriend]( asks to be spared from prison - Crisis endures as [China’s housing rescue math proves unworkable]( - [Revolut grapples with surge in scams]( that threaten its ambitions And finally, here's what Joe’s interested in this morning On Polymarket, Kamala Harris is now favored to win the Presidency after last night's Presidential debate. It's a notable change from pre-debate, when bettors were giving Trump around a 52% chance to win. One thing I've been saying for awhile is that prediction markets are good for news consumption. When something like a debate happens, there's all kinds of things people take in. People watch the debate itself. People are likely following what their social media feeds say. People read the news. People listen to biased pundits, and so forth. And liquid prediction markets are yet another to add to that mix. It's one thing to hear someone on TV say "Kamala Harris won the debate", but it's hard to know what that means exactly. Seeing a market with millions of dollars on the line swing a few points (modestly, but clearly) says a little bit more. Another nice thing about these markets is you can clearly see the link between what's going on with the Presidential race and certain politics-sensitive asset classes. Here's Bitcoin slipping right at the same time as Trump's odds. One objection you could make is that it's still all "horse race" stuff, that just like following polls, none of it matters until election day, and right now the betting markets could be wrong. And that's true. But if the Presidential election race is spilling into other markets, then to some extent swings in perception are inevitably going to matter. You know, all markets can be "wrong". Traders can bid up a stock on expectation of good earnings, and then earnings disappoint. This happens all the time. But of course, in the meantime, on the way to be wrong, money is still made and lost while the stock goes in various directions. So if you have any sort of short- or medium-term interest in markets, and if you want to benchmark your own views against conventional wisdom, or just see where conventional wisdom stands right now with respect to the Presidential election, then these betting markets are useful tools. Joe Weisenthal co-hosts Bloomberg’s Odd Lots podcast. Follow him on X [@TheStalwart]( [Bloomberg Markets Wrap: The latest on what's moving global markets. Tap to read.]( Follow Us Stay updated by saving our new email address Our email address is changing, which means you’ll be receiving this newsletter from noreply@news.bloomberg.com. Here’s how to update your contacts to ensure you continue receiving it: - Gmail: Open an email from Bloomberg, click the three dots in the top right corner, select “Mark as important.” - Outlook: Right-click on Bloomberg’s email address and select “Add to Outlook Contacts.” - Apple Mail: Open the email, click on Bloomberg’s email address, and select “Add to Contacts” or “Add to VIPs.” - Yahoo Mail: Open an email from Bloomberg, hover over the email address, click “Add to Contacts.” Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. Want to sponsor this newsletter? [Get in touch here](. You received this message because you are subscribed to Bloomberg's Five Things to Start Your Day: Americas Edition newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. [Unsubscribe]( [Bloomberg.com]( [Contact Us]( Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022 [Ads Powered By Liveintent]( [Ad Choices](