• Larry Summers has withdrawn as a candidate to replace Ben Bernanke. Janet Yellen will now be the favourite.
• The US and Russia have agreed a deal on Syria’s chemical weapons.
• Barack Obama is making the debt ceiling a constitutional issue. He argued that it would be a fundamental change to the way the US is governed if one party was able to demand substantial changes in law by holding the credit of the US to ransom. I think that the Republicans have more to gain from digging in over the funding bill than the debt ceiling. Given Republican lawmakers’ entrenched positions, I expect a government shutdown. That is, unless Republican leaders can find a way of agreeing a temporary extension of current law while negotiations continue.

Data:

• UK Rightmove House Price Index +4.5% YOY Sep.
• Prelim. Michigan sentiment 76.8 d.e. A second monthly decline.
• Retail sales 0.2% MOM d.e. Aug. +4.7% YOY.

Coming Up:

• Draghi speech
• Eurozone CPI
• Eurozone currency account
• Industrial production
• China FDI
• UK CPI