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

Good morning. Traders brace for the Fed’s preferred inflation measure, wagers on yen intervention rise, President Biden’s debate woes and Ni [View in browser]( [Bloomberg]( Good morning. Traders brace for the Fed’s preferred inflation measure, wagers on yen intervention rise, President Biden’s debate woes and Nike shares tumble. Here’s what’s moving markets. — [Sam Unsted]( Want to receive this newsletter in Spanish? [Sign up to get the Five Things: Spanish Edition newsletter](. PCE day US stock futures are edging higher, Treasuries are pretty calm and the dollar is sitting near to an eight-month high, with [attention focused around the PCE inflation data coming later](. The Federal Reserve’s preferred inflation gauge comes after a batch of data that reinforced the view the central bank will be able to cut rates this year, including slowing personal spending and signs of weakness in the jobs market. Yen risks Yen traders’ sights will be trained on the PCE data with the Japanese currency [breaking through levels against the dollar not seen since 1986](. The persistent strength in the greenback has raised wagers of Japan intervening in the market. Meanwhile, the country’s Topix stock index [touched the highest level since 1990](, boosted by improving shareholder returns and with the weak yen helping exporters. Debate concerns [President Joe Biden struggled]( in the campaign’s first presidential debate against Donald Trump, fanning worries about his age and raising questions among Democrats on [whether they should replace him as their candidate](. Biden misspoke numerous times, repeated himself and froze at the end of one answer. Trump, meanwhile, delivered responses filled with falsehoods and exaggerations, and refused to commit to accepting the outcome of November’s election. The view that Trump won the night also gave a [small lift to the dollar](. Nike slides Shares in Nike have been slammed after the [sportswear giant’s sales outlook fell short of expectations](, reinforcing investor concerns about waning demand for its brands and that it is losing ground to rival Adidas. Nike said it expects revenue to fall in its current financial year, against analyst expectations for a rise. It has struggled to roll out new products to replace top sellers like Air Force 1 and Dunk sneakers, while its Converse unit saw quarterly revenue slump by 18%. French hedging [Investors are preparing for the first round of French elections]( this weekend following the rout in bonds and stocks that has followed the snap vote being called. Traders are betting that bond yields will go higher, while hedging potential losses in stocks and piling into derivatives to protect against a drop in the euro. The far-right National Rally has [solidified its polling lead]( ahead of election day and [here’s a guide to how it will all work](. What We’ve Been Reading This is what’s caught our eye over the past 24 hours. - Argentina’s Milei [wins approval]( for broad economic reforms. - [Merger arbitrage teams]( getting cut amid the tough dealmaking backdrop. - NFL hit with [$4.7 billion in damages]( for broadcast monopoly. - HSBC [taps the metaverse]( to win business from affluent Indians. - Kevin Costner’s [$100 million Western]( heads for box-office bust. And finally, here's what Garfield’s interested in this morning The lack of recessions in the US and elsewhere — usually a banner time for sovereign debt — hasn’t stopped plenty of optimism among bond bulls that a fresh golden era is just around the corner. Investors keep getting drawn in by the fattest yields since before the 2008-9 global financial crisis. The overwhelming expectation is that those yields will come back down as economies slow. There are growing concerns that any declines will be slow, and subject to reversals. Global bond gauges are mostly in the red for the year — and those with positive returns are almost all relying on fat yields. Most major indexes delivered returns this year markedly lower than the expected income from coupon payments at the start of the year — based on half of the index yield as of the end of 2023. The steepest global tightening cycle in a generation looks to be over, but bond bulls are struggling to come to terms with the cautious, glacial pace of the pivot by central banks toward easing. Garfield Reynolds is team leader for Bloomberg’s Markets Live Asia, based in Sydney. [Bloomberg Markets Wrap: The latest on what's moving global markets. Tap to read.]( Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. 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