Fed Is Done, First Cut Set for May or Sooner

March now has a 1 in 3 chance of a cut

Highlights

• Soft October CPI report paves the way for rate cuts by the Fed, sooner than earlier expected…

• … U.S. Treasuries will be the biggest beneficiary

• Retailer earnings to be marred by a double whammy: drop in volumes as well as prices

• German ZEW data show Europe’s economic engine is in recession