Tonight, we have the first presidential debate, which is for global markets, including the U.S., is the main event of the day. The debate has combined with the uncertainty that surrounds this week’s Organization of Petroleum Exporting Countries (OPEC) meeting to push global markets mainly into the red.

There will be two more debates after this, which will take place on Sunday, October 9 and on Wednesday, October 19.

Popular wisdom suggests that the three debates will be more than ordinary influential on the outcome of the presidential election on Tuesday, November 8.

With polls having narrowed and an opportunity for setting out some policy structures, overall markets will pay attention to both the content and the opinion poll reaction.

Traditionally, a challenger has tended to be perceived as faring better in the first presidential debate, in part because of expectations of the challenger are lower.

Given the way this campaign has been run, Trump would appear to be the challenger.

So, while we wait for the politicians to engage in enlightened insightful debate about the philosophical issues of the day, let's have a look what has the real world to offer.

Oil prices have been moderating on speculation that OPEC will fail to agree on anything in their upcoming get together.

Why the prospect of OPEC failing to agree constitutes new information for financial markets is a bit of a mystery as it has really be downhill for OPEC since it caused the first oil shock in 1973 with its self-proclaimed oil embargo that caused the oil price to rise from about $3 per barrel in October 1973 to nearly $12 per barrel in March 1974, or a rise of about 300 percent in about 6 months, which has caused short- as well as long-term effects on global politics and the global economy.

Oil prices at current levels still constitute enough of an increase that the oil base effect on inflation in the U.S. and the EU is, for the time being, essentially removed over the course of the next few months.

Investors could also do well taking note that the WTO price recovery remains lackluster at best and still remains at about only 45 percent from where the price was in 1986.

Meanwhile, Germany provided today its Ifo data of business sentiment that rose from 106.3 points (seasonally-adjusted) in August to 109.5 points in September, which was its highest level since May 2014, but nevertheless remained below the levels reached in 2014.

Never forget, improving sentiment does not mean growth per se because it is and remains sentiment.

Over the weekend, we got interesting economic data out of the U.K. where mortgage lending figures showed a surprising 7 percent rise in August compared to July and a 15 percent rise compared to August 2015.

This data reflect, certainly in part, the Bank of England August 4 rate cut, but certainly doesn’t reflect “yet” the uncertainty over the economic outlook post the June 23 Brexit vote.

In this context, it could be interesting to note that a just released KPMG survey of 100 UK chief executives wherein we learn that 76 percent said they were considering moving either their headquarters or their operations outside Britain because of Brexit. Please keep in mind that KPMG also says 72 percent of the CEOs surveyed had voted to remain in the EU.

A KPMG representative said: “CEOs are reacting to the prevailing uncertainty with contingency planning." Asked what would encourage businesses to continue investing in Britain, the survey ranked certainty over trade terms as the most important. Anyway, it's an interesting subject to follow over the coming years and one that will have its impact on markets, no doubt about that.

Finally, the Bank of Japan’s (BOJ) Governor Kuroda did clarify very little, if anything (as usual) today about the confusion that the recent BOJ policy shift has caused in the markets.

He stated in prepared remarks: “There is no better opportunity than now to completely get out of deflation. Talking about the limits of monetary policy does not help at all. There is no limit to monetary policy. The costs of monetary policy should be minimized and the benefits be maximized.”

So, we’ll see tonight what comes out of the presidential debate.
 

Etienne "Hans" Parisis is a bank economist who has advised global billionaires and governments on the financial markets and international investments. To read more of his articles, GO HERE NOW.