5 Things You Need to Know to Start Your Day

Good morning. The latest developments in the Middle East, Biden casts Russia and Hamas as parallel threats to democracy and Credit Suisse is [View in browser]( [Bloomberg]( Good morning. The latest developments in the Middle East, Biden casts Russia and Hamas as parallel threats to democracy and Credit Suisse is reported to ready more job cuts. Here’s what’s moving markets.  —[David Goodman]( Israel Latest Israel’s military [said it struck Hamas targets](in Gaza overnight and hit Hezbollah holdings in response to fire from Lebanon, where the Iran-backed group is based. Meanwhile the leaders of Saudi Arabia and the United Arab Emirates met in Riyadh on Friday — their first public encounter in more than three years — indicating an effort by the two regional heavyweights to put differences to one side and confront the threat of the Israel-Hamas war becoming a wider conflict. Biden Address President Joe Biden directly appealed to the American people to support funding for Israel and Ukraine’s war efforts, warning that Hamas and Russian President Vladimir Putin [pose parallel threats to US democracy](. The roughly 15 minute Oval Office address precedes a formal White House request that Congress provide approximately $100 billion in resources for Israel, Ukraine, Taiwan and the US southern border. Biden argued that supporting Ukraine and Israel in their fights against Russia and militant groups, respectively, is “vital for America’s national security.” Credit Suisse Cuts UBS is [poised to start its next wave of job cuts]( at Credit Suisse, this time targeting about 10% of support staff, likely in areas such as compliance, risk and marketing, Financial News reported. The Swiss bank informed employees the reductions will start Nov. 6, the publication said, citing unidentified people familiar with the matter. A UBS spokesperson declined to comment when contacted by Bloomberg News. Stocks fall [Equities fell]( as investors responded to the threat of a weekend escalation in the Middle East conflict, driving oil and gold higher. Treasuries rose as yields at multiyear highs drew buyers. Europe’s Stoxx 600 Index slumped 0.6% to a seven-month low, while Asian stocks headed for their biggest weekly drop in two months. Coming Up… After yesterday’s rush of seven sets of Fed comments, there’s a more sedate pace today with just two speakers — Patrick Harker and Loretta Mester. It’s quiet day for data, while earning include a report from AmEx. What We’ve Been Reading This is what’s caught our eye over the past 24 hours. - Powell signs Fed to stay on hold and [keeps future hike on the table](. - UK consumers are[cutting back on luxuries]( as cost of living crisis bites. - Labour’s double win puts opposition on [path to power](in Britain. - BOE Governor says his [inflation fight]( has further to run. - Country Garden default is [all but official](. - Inflation at 130% is [pushing Argentina down a radical path](. - After last weekend’s epics, get ready for the [Rugby World Cup semi finals.]( And finally, here's what Katie’s interested in this morning Outside of “how high can yields go?”, one of the most pressing questions in financial markets right now is simply “why are yields rising?” Bloomberg Television’s David Westin sat down with Federal Reserve Chair Jerome Powell at the Economic Club of New York on Thursday and got a few different answers. Powell was quick to point out that it’s not because of Fed policy expectations — the 2-year yield has been relatively contained — but as far as the long-end goes, it’s anyone’s guess: Markets and analysts are seeing the resilience of the economy to high interest rates and they’re revising their view about the overall strength of the economy and thinking even longer-term, this may require higher rates. That could be part of it. There may be heightened focus on fiscal deficits, that could be part of it. QT could be part of it. Another one you hear very often is the changing correlation between bonds and equities. If we are going into a world of more supply shocks rather than demand shocks, that could make bonds a less attractive hedge to equities and therefore, you need to be paid more to own bonds. I also enjoyed this quip from the Fed chair: “There’s many candidate ideas, and many people feeling their priors have been confirmed by this event, I’ll say as well.” Beyond what’s driving the move higher — 10-year Treasury yields are within a whisker of 5% — Powell echoed last week’s parade of policymakers by invoking the idea that higher bond yields are doing some of the Fed’s lifting here via tighter financial conditions. “I think we have to let this play out and watch it, but it’s clearly a tightening in financial conditions,” Powell said. “So we’ll be watching it closely.” Follow Bloomberg's Katie Greifeld on Twitter [@kgreifeld]( Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. Follow Us Like getting this newsletter? 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