In the previous week, sentiment in the Global Credits market continued to improve with positive developments in US-China trade relations. The week started with better buying interest after US inflation [for what period] was slower than expected. Activity slowed midweek due to the holiday in Hong Kong and preparations ahead of the Federal Open Market Committee’s decision on policy rates. The US Federal Reserve cut policy interest rates by 25 basis points (bps), as expected, Fed Chairman Jerome Powell remarked that a December cut was far from a foregone conclusion. The hawkish cut was offset by headlines related to US President Donald Trump and Chinese President Xi Jinping’s highly anticipated meeting. Both countries agreed to reduce recently imposed tariffs and export controls, with Trump remarking that the US and China were “in agreement on many elements.” Overall, spreads were tighter by 3-5 bps.

• The US Federal Reserve cut its key policy rate by 25 basis points from 4.25% to 4%, which is in-line with Bloomberg Survey.
• The US Chicago Purchasing Managers’ Index, a barometer for the manufacturing and non-manufacturing sectors in the Chicago area, came in higher than expected in October at 43.8 versus 42.3 in a Bloomberg Survey. A reading below 50 means a contraction.
• The US Pending Home Sales, a leading indicator for housing activity, came in lower than expected in September at 0.0% month-on-month versus 1.2% in a Bloomberg Survey.