Joining me now here at the big board is Jessica Ensk, director of investor research, stockbrokers. com. Jessica, it's always good to see you whether in person or virtually.So you say the market is rallying on three key pillars. One, I want to know what you see those three key pillars as and then I've got to follow up on that. >> Sure.So the three key pillars are an easing Fed cycle, earnings growth, that's very very important, and strong economic conditions. Those are the three pillars that were holding us ...

So for more, let's bring in Barry Napp. He's director of research at Iron Science Macroeconomics. Uh Barry, love to get your read on the CPI number.Of course, one of the few data prints that we've been able to get, albeit, you know, delayed and guess sounds like the government had to pull some extra strings to get it to us, but uh 3% initially earlier on the show, we had Krishna Guha saying that's pretty benign, at least from a market perspective. the two um issues that I haven't heard discussed um over all ...

Currency Market Overview - The dollar index rose by +0.34% to a four-session high, supported by weakness in the yen and easing US-China trade tensions [1] - The yen fell to a one-week low against the dollar due to expectations of expansionary fiscal policy under new Japanese Prime Minister Takaichi [1][5] - The euro declined by -0.31% as a result of dollar strength and negative sentiment from a credit rating downgrade of France [3] Economic Indicators - The October Philadelphia Fed non-manufacturing business activity survey dropped -9.9 to a four-month low of -22.2, indicating a slowdown in business activity [2] - Markets are anticipating a 97% chance of a -25 basis point rate cut at the upcoming FOMC meeting on October 28-29 [2] Central Bank Policies - The Federal Reserve is expected to continue cutting interest rates, while the European Central Bank (ECB) is nearing the end of its rate-cutting cycle, leading to central bank divergence [3][4] - Swaps indicate a 2% chance of a -25 basis point rate cut by the ECB at the October 30 policy meeting [4] Japan's Economic Data - Japan's September machine tool orders were revised upward to +11.0% year-on-year, marking the largest increase in six months [6]

Financial Data and Key Metrics Changes - AGNC reported comprehensive income of $0.78 per common share for Q3 2025, with an economic return on tangible common equity of 10.6%, consisting of $0.36 in dividends and a $0.47 increase in tangible net book value per share [13] - The company ended the quarter with leverage of 7.6 times tangible equity, unchanged from the prior quarter, and maintained a strong liquidity position with $7.2 billion in cash and unencumbered agency MBS, representing 66% of tangible equity [14] Business Line Data and Key Metrics Changes - Net spread and dollar roll income declined to $0.35 per common share, driven by lower swap income due to the maturity of $4 billion of legacy swaps and a timing mismatch in capital deployment [14] - The average projected life CPR of the portfolio increased to 8.6% from 7.8% in the prior quarter, while actual CPRs averaged 8.3% compared to 8.7% previously [15] Market Data and Key Metrics Changes - The demand for agency mortgage-backed securities (MBS) increased significantly, with bond fund inflows reaching $180 billion in Q3, slightly ahead of last year's pace [9] - The supply of agency MBS is expected to be about $200 billion this year, at the lower end of initial expectations, while demand outlook has improved, particularly from the money manager community [8] Company Strategy and Development Direction - AGNC is positioned to generate attractive risk-adjusted returns as the largest pure play levered agency investment vehicle, focusing on optimizing asset composition and maintaining a favorable hedge ratio [12] - The company is actively rotating into pools with favorable prepayment characteristics and has added $7 billion of receiver swaptions for down rate protection [19] Management's Comments on Operating Environment and Future Outlook - Management expressed a constructive outlook for agency MBS, citing improved spread environments, balanced supply and demand dynamics, and favorable financing markets [6][10] - The company anticipates that lower funding costs from recent rate cuts and a shift in hedge mix will provide a moderate tailwind to net spread and dollar roll income [15] Other Important Information - The Treasury Department is focusing on mortgage spreads to improve housing affordability, which is seen as beneficial for agency MBS and AGNC's business [7] - The company issued $345 million of fixed-rate preferred equity, the largest mortgage REIT preferred stock offering since 2021, and $39 million of common equity at a significant premium to tangible net book value [15] Q&A Session Summary Question: Discussion on expected ROEs and dividend sustainability - Management indicated that current coupon mortgages are expected to yield ROEs between 16-18%, aligning with total cost of capital, and that dividend sustainability remains strong despite recent spread tightening [21][23] Question: Insights on hedge ratio changes - The hedge ratio decreased due to a higher proportion of short-term debt, but management expects benefits from anticipated Fed rate cuts, which will lower funding costs over time [26][29] Question: Demand for MBS from money managers - Management noted robust bond fund inflows and anticipated continued strong demand for agency MBS, particularly as banks may increase their mortgage holdings following regulatory reforms [38][39] Question: Impact of Fed easing on net spread - Management expects a near-term tailwind to net spread income due to the deployment of capital and the anticipated easing of short-term rates [42][45] Question: Risks to the constructive view on spreads - The primary risks identified include macroeconomic factors that could lead to inflationary pressures, which may affect the Fed's monetary policy and, consequently, the agency MBS market [85][86]

Summary of CEE Economics Conference Call Industry Overview - The report focuses on the macroeconomic trends and outlook for Central and Eastern Europe (CEE), specifically highlighting the economic conditions in Poland, Hungary, and the Czech Republic [1][2][3]. Key Points Poland - **Economic Activity**: There is a low probability of recession in Poland, with nowcasting models indicating an acceleration in GDP growth for Q3 [21][24]. - **Labour Market**: Despite economic recovery, employment is declining, particularly affecting young workers, although the overall jobless rate remains stable [25][28]. - **Monetary Policy**: Inflation has decreased below 3% due to a slowdown in utility prices and moderation in core inflation, with markets anticipating further rate cuts [32][34]. - **Fiscal Policy**: The Ministry of Finance expects a significant increase in public debt, with a slower narrowing of the fiscal deficit than previously anticipated. Heavy issuance of POLGBs is expected in Q4 [36][40]. Hungary - **Economic Activity**: No significant rebound in industrial output is observed, with recession risk indicators remaining high, although some improvement was noted in September [48][50]. - **Labour Market**: Average wages have slowed to 9% YoY, with public sector wages rising faster at 10%. The share of sectors with double-digit growth has decreased [54][56]. - **Inflation Outlook**: Headline inflation remained unchanged at 4.3% in September, with core inflation gaining momentum and nearly 60% of the core inflation basket growing at a double-digit annualized pace [60][64][66]. - **Monetary Policy**: The National Bank of Hungary (NBH) is expected to maintain cautious rates in Q4, with a narrow window for potential cuts in early 2026 [70][73]. Czech Republic - **Economic Activity**: Low and falling recession risks are indicated, with stable production of capital goods despite weak growth in Germany. Retail growth is solid, supported by positive real wage growth [81][85]. - **Inflation and Monetary Policy**: Headline inflation has slowed, but core inflation remains elevated, prompting the Czech National Bank (CNB) to signal a prolonged period of rate stability [87][88]. - **Fiscal Policy**: An expected issuance of around CZK 210 billion in Czech T-Bonds for 2025, with strategies to manage bond maturities in 2026 [90][93]. Additional Insights - The report emphasizes the interconnectedness of macroeconomic indicators across the CEE region, highlighting the importance of monitoring inflation, employment trends, and fiscal policies as they can significantly impact investment opportunities and risks in the region [1][2][36][70].

says that's because investors are paying attention to different things in DC. Fiscal and monetary policy, which I think Dan Clifton, uh, head of policy research at Strategus, uh, research, which is a bar company. Both of those are are going to be positive, I think, at least, um, for GDP, aren't they, Dan.There's there's some serious uh, scratch coming our way in the economy from these things. Absolutely, Joe. Great to see you.I mean, there's a lot of noise here from Washington, and there are some real risks ...

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses global economic conditions, focusing on the implications of political events and economic indicators across various regions including the US, Europe, and Asia. Key Economic Insights 1. **US Government Shutdown**: - The US government shutdown has extended into its second week, delaying federal economic data releases, which is expected to reduce Q4 annualized GDP growth by 0.11 percentage points per week of shutdown [3][4][5] - Alternative labor market data indicates a rebound in job growth to 80,000 per month in September from around 0 in May [5] 2. **Global PMIs**: - The global composite PMI fell by 0.5 points in September to 52.9, with declines in both manufacturing and services sectors [3] - US manufacturing suppliers' delivery times increased as the rush to frontload ahead of tariff implementation subsided [3] 3. **Political Uncertainty in Europe**: - Renewed political uncertainty in France following the resignation of Prime Minister Sebastien Lecornu, with expectations of growth running below trend and an increase in the government deficit forecast to 5.3% of GDP for 2026 [5][6] - The upcoming Canada and UK Budgets are anticipated to focus on fiscal consolidation and investment [3] 4. **Inflation Outlook**: - Inflation in the Euro area is expected to normalize, with core inflation projected to remain around 2% in the coming years [6] - Headline inflation is forecasted to reach 2.0% by the end of 2025, with a slight increase in food inflation [6] 5. **Japan's Political Landscape**: - Sanae Takaichi was elected as the leader of Japan's Liberal Democratic Party, but significant fiscal policy changes are not anticipated in the near term [6] - The next Bank of Japan rate hike is expected in January 2026 [6] 6. **Central Bank Actions in Asia**: - The Reserve Bank of New Zealand lowered its policy rate by 50 basis points to 2.5%, with further cuts expected [6] - The Philippines central bank also surprised with a dovish rate cut, while the Bank of Thailand held its rate steady [6] Economic Growth Forecasts - **Real GDP Growth Projections**: - US: 2.8% in 2024, 1.9% in 2025, 1.8% in 2026 [7] - Euro Area: 0.8% in 2024, 1.3% in 2025, 1.2% in 2026 [7] - China: 5.0% in 2024, 4.8% in 2025, 4.2% in 2026 [7] - India: 6.7% in 2024, 7.1% in 2025, 6.4% in 2026 [7] Additional Insights - The military pay date on October 15 could be a critical event for resolving the US government shutdown [5] - Concerns regarding the implementation of Germany's fiscal package, particularly in infrastructure spending, are noted, but optimism remains regarding defense spending's growth impact [5][6] This summary encapsulates the essential points discussed in the conference call, highlighting the economic conditions, forecasts, and political factors influencing the global economy.

Fiscal Policy - Indonesia's budget-deficit cap, a cornerstone of its fiscal policy for decades, may now impede economic growth [1] Economic Outlook - A key technocrat who played a role in rebuilding Indonesia's economy post-Asian financial crisis expresses concern [1]

Market Overview - Asian markets showed mixed results following a phone call between US President Donald Trump and Chinese President Xi Jinping, with low expectations for concrete agreements on tariffs and technology supply chains [2][8] - Hong Kong's Hang Seng Index remained largely unchanged, while mainland China's CSI 300 saw a marginal gain, and the Shanghai Composite Index recorded a slight loss [3] - Japanese markets ended lower, influenced by a firmer yen, and the US faces a critical September 30th deadline to pass a funding bill, which could introduce further volatility [3] Japan's Bond Market - Japan's 30-year government bond yield climbed to 3.18%, an increase of 3 basis points, amidst rising yields reaching multi-decade highs [4] - The increase in yields is attributed to investor concerns over Japan's fiscal policy ahead of Senate elections and the nation's high debt-to-GDP ratio [4] - The Bank of Japan's decision to abandon Yield Curve Control in 2024 and reduce JGB purchases has allowed market forces to drive yields higher, posing challenges for carry traders [5] EUR/USD Currency Pair - The EUR/USD currency pair experienced a notable drop, falling below the 1.1750 mark, primarily driven by a strengthening US Dollar following the Federal Reserve's cautious rate cut outlook [6][8] - The European Central Bank maintained its key interest rates, but concerns over political turmoil in France and a recent credit rating downgrade by Fitch have weighed on the Euro [7] Ukraine's Defense Strategy - Ukrainian forces are rapidly integrating robotic units into frontline brigades to enhance operations and protect soldiers, aiming to gain a tactical advantage [9] - Plans include deploying 15,000 unmanned systems by 2025, with a focus on domestic production to develop a modern army [10] - The initiative has already shown results, with reports of successful robot-only assaults conducted in Kharkiv Oblast [10]

Central Bank Role - Central bank independence was a narrative [1] - Central banks primarily finance the state [1] - Fiscal and monetary policy are inseparable [1] Historical Context - The shift occurred after the 1970s, following the abandonment of the gold standard [1]