US stocks closed in the red, weighed down by hot US data. The data sparked concerns over the Fed’s ability to cut rates in the current environment, whereby the Q2 data pointed towards a hotter-than-expected economy.
Dollar saw extensive gains and continued on its move higher seen on Wednesday. The catalyst on Thursday was US data, which broadly painted an upbeat picture of the US economy.
Oil prices were choppy, but ultimately settled more or less unchanged amid a week of notable gains.
US President Trump signed an executive order on TikTok, saying he had good talks with Chinese President Xi and that China is fully on board.
Looking ahead, highlights include Japanese Tokyo CPI (Sep), Chinese Industrial Profit YTD, BoJ’s Noguchi, and supply from Australia
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US TRADE
US stocks closed in the red, weighed by hot US data. The data sparked concerns over the Fed’s ability to cut rates in the current environment, whereby the Q2 data pointed towards a hotter-than-expected economy.
Equity sectors ex-Energy traded in the red, led by Health, Consumer Discretionary, and Materials, while Energy once again in a seemingly rotation play.
SPX -0.50% at 6,605, NDX -0.43% at 24,397, DJI -0.38% at 45,947, RUT -0.98% at 2,411
Click here for a detailed summary.
NOTABLE HEADLINES
Goldman Sachs President said consumer spending remains healthy, though there is some stress in the lower-income bracket, according to Reuters.
Citadel CEO Ken Griffin said the US economy is doing well and that he thinks the Fed will cut once more this year, twice at most, according to CNBC.
NOTABLE US EQUITY NEWS
Amazon (AMZN) will pay USD 2.5bln in fines and consumer redress in a Prime case settlement, and will establish a USD 1.5bln consumer fund for reimbursements related to the settlement, according to the FTC.
Meta (META) is reportedly set to face a charge sheet from the EU for failing to adequately police illegal content, risking fines for violating the bloc’s content moderation rulebook, according to Bloomberg.
Google (GOOGL) is set to be hit with a second fine under landmark EU rules in the coming months, according to Reuters sources, with the EU not rushing the decision due to US trade tensions and criticism.
Oracle (ORCL), Silver Lake, and MGX will be the main investors in TikTok US with a combined 45% ownership, according to CNBC’s Faber citing sources.
Intel (INTC) has approached TSMC (TSM) about investments or manufacturing partnerships, WSJ reports.
DATA RECAP
US Initial Jobless Claims 218.0k vs. Exp. 235.0k (Prev. 231.0k, Rev. 232k)
US Continued Jobless Claims 1.926M vs. Exp. 1.935M (Prev. 1.92M, Rev. 1.928M)
US Durable Goods (Aug) 2.9% vs. Exp. -0.5% (Prev. -2.8%, Rev. -2.7%)
US Durables Ex-Transport (Aug) 0.4% (Prev. 1.0%)
US Nondefe Cap Ex-Air (Aug) 0.6% vs. Exp. -0.1% (Prev. 1.1%, Rev. 0.8%)
US Durables Ex-Defense MM (Aug) 1.9% (Prev. -2.5%, Rev. -2.3%)
US GDP Final (Q2) 3.8% vs. Exp. 3.3% (Prev. 3.3%)
US GDP Sales Final (Q2) 7.5% vs. Exp. 6.8% (Prev. 6.8%)
US GDP Deflator Final (Q2) 2.1% vs. Exp. 2.0% (Prev. 2.0%)
US GDP Cons Spending Final (Q2) 2.5% (Prev. 1.6%)
US Core PCE Prices Fnal (Q2) 2.6% vs. Exp. 2.5% (Prev. 2.5%)
US PCE Prices Final (Q2) 2.1% vs. Exp. 2.0% (Prev. 2.0%)
US KC Fed Manufacturing (Sep) 4.0
US KC Fed Composite Index (Sep) 4.0 (Prev. 1.0)
TRADE/TARIFFS
US President Trump signed an executive order on TikTok, saying he had good talks with Chinese President Xi and that China is fully on board; he said American investors are taking it over and TikTok investors will include Larry Ellison, while Oracle (ORCL) is playing a very big part; he added he is satisfied with security concerns, that Xi was great in terms of approval, and that Michael Dell and Rupert Murdoch are involved.US Vice President Vance said TikTok will be valued at around USD 14 billion, that Americans will control the algorithm, and that he wants it to be fair.
US President Trump said he will take tariff money and give it to US farmers, adding that farmer aid will be distributed until tariffs begin to benefit them, according to Reuters.
US Agriculture Secretary Rollins said the DoJ antitrust division will look at high fertiliser and seed costs, adding that the USDA is developing a plan to revitalise the beef industry but will not offer payments to producers, according to Reuters.
EU Trade Commissioner Sefcovic said he met with USTR Greer and added that implementation of US-EU trade commitments is on track, with the next focus on jump-starting strategic collaboration on steel, according to Reuters.
White House Economic Advisor Hassett said there has been enormous progress on China trade talks but still work to do, adding that he cares China has stopped buying US agricultural products, according to Fox Business.
China’s Commerce Ministry announced it is launching an anti-dumping investigation into American and Mexican pecans, according to Reuters.
China’s Commerce Ministry said it has launched an investigation into Mexico’s trade restrictive measures against China, according to Reuters.
The EU plans to impose tariffs of 25–50% on Chinese steel and related products, according to Handelsblatt.
CENTRAL BANKS
Swiss National Bank (SNB) kept its policy rate unchanged at 0.0% in Q3, in line with expectations (Prev. 0.0%), and said it remains willing to intervene in FX if needed, with annual inflation forecasts maintained, according to Reuters.
SNB Chair Schlegel said uncertainty over inflation and economic developments remains elevated, noting that inflation pressure is virtually unchanged from the prior quarter and that monetary policy will be tweaked as needed. He added the SNB remains willing to be active in FX if required, said the bar to go into negative rates is higher than for a normal cut though all tools remain available, and noted that while a large part of the economy has not been affected by tariffs, Switzerland’s high tariffs may pose challenges. He stressed monetary policy is currently expansive, negative inflation prints are possible in the short term, and the medium-term outlook is key. He also said they are not considering re-introducing a minimum exchange rate as the situation is different to 2011, and emphasised that interventions are not used to give companies an unfair advantage, according to Reuters.
SNB Vice Chairman Martin said global economic developments are being dampened by US tariffs and ongoing high uncertainty, which is weighing on companies’ investment activity. He added that while the global economy remains subject to high uncertainty, it could prove more resilient than expected, though US tariffs are likely to curb global trade and reduce US household purchasing power, according to Reuters.
SNB’s Tschudin said Switzerland’s economic outlook has deteriorated due to significantly higher US tariffs, with unemployment likely to continue rising. She noted the outlook remains uncertain with main risks stemming from US trade policy and global economic developments, according to Reuters.
ECB’s Kazimir said the inflation goal has been met and the ECB will only act if required, according to Reuters.
Fed’s Miran said others on the Fed are more concerned about tariffs driving inflation, while he is more sanguine about growth and still holds a lower rate outlook. He said there is a decent chance of 3% growth in H2 and into 2026, adding that policy is about 200bps too restrictive and should be eased in 50bps steps. He noted the Fed should be closer to neutral in the next six months, according to Fox Business.
Fed’s Miran said he will continue advocating for rate cuts and remains on the low end of 2026 projections, though the gap with others has narrowed. He added that waiting for policy shifts to take effect before cutting rates would be too late, stressing that policy is becoming tighter every day while neutral is drifting down, according to Fox Business.
Fed’s Goolsbee (2025 voter) said the job market seems to be cooling and that he is uneasy about ‘transitory’ inflation. He added that rates can go a fair bit lower, but expressed unease with frontloading too many cuts based solely on slowing job numbers, according to Reuters.
Fed’s Goolsbee (2025 voter) said frontloading rate cuts before it is clear inflation will not be persistent runs the risk of a mistake, noting that the labour market is largely stable with some mild cooling and that the pace of rate cuts will largely be determined by the behaviour of inflation. He said he remains concerned about inflation and wants to be vigilant, adding that Fed policy has been mildly and moderately restrictive, according to Reuters.
Fed’s Schmid (2025 voter) said the Fed is close to meeting its mandates but must look forward, noting that the recent rate cut was appropriate to offset labour market risks. He added that recent data points to rising risks for jobs, inflation is still too high, and the job market remains largely balanced. He said Fed policy is ‘slightly restrictive,’ which is the right stance for now, and stressed that monetary policy will remain data-dependent, according to Reuters.
Fed’s Schmid (2025 voter) said there are many nuances in balancing the dual mandate, noting that policy becomes more surgical the closer the Fed gets to its goals. He added that the balance between market impact and balance sheet reduction needs consideration, with the big question being the correct level of reserves, which could trend down to about USD 2.6tln. He said further shrinking of the balance sheet would be beneficial, according to Reuters.
Fed’s Logan (2026 voter) said the Fed should move to target the tri-party general collateral rate and that the time has arrived to modernise the interest rate target system. She noted the Fed funds market still works but is increasingly fragile, and that the shift to secured markets means the Fed needs to update its rate target system. She added the Fed has changed its rate control framework a number of times in the past, that some volatility in the repo rate target would be acceptable given the Fed targets a range, and that it is best to update the system when markets are calm. Logan stressed that modernising the rate control system is technical in nature and that the repo market, being the centre of money markets, makes sense to target, according to Reuters.
Fed’s Daly (2027 voter) said the inflation impact of tariffs has not been as large as forecast but has weighed more heavily on the labour market; she noted that rates remain modestly restrictive, a little more rate cutting will be needed over time, but warned against going all the way to neutral as it would be too risky; she said the US economy is in okay shape, and bringing Fed interest rates down toward the neutral 3% level will not solve the housing affordability crisis; she emphasized the need to monitor both inflation and labour market weakness, pointing to difficulties faced by new college graduates in getting hired, low job-finding rates, and the length of time it takes to find a job as yellow flags for the job market, according to Reuters.
Fed Governor Cook filed response at US Supreme Court to US President Trump’s bid to fire her.
White House Economic Advisor Hassett said the Fed is moving toward a consensus on a one-time price increase from tariffs, according to Fox Business. Reminder: Hassett is in contention to be the next Fed Chair.
FX
The Dollar saw extensive gains and continued on its move higher seen on Wednesday. The catalyst on Thursday was US data, which broadly painted an upbeat picture of the US economy.
G10 FX was once again lower across the board amid the surging Buck, as opposed to much currency-specific newsflow. Despite saying that, CHF saw modest strength in wake of the SNB.
EMFX was exclusively lower amid the aforementioned themes. South African PPI was hotter than expected, while Brazilian IPCA-15 Mid-Month CPI came in short of Wall St. consensus.
MXN saw little move on Banxico, whereby they cut rates by 25bps, as expected to 7.50%, and Heath dissented in favour of maintaining rates at 7.75%, as he did in the prior meeting.
FIXED INCOME
T-Notes sold on hot US data ahead of PCE.
UK sold GBP 1.25bln 4.50% 2034 Gilt via tender: b/c 2.90x, average yield 4.584%.
US sold USD 44bln of 7yr notes; tail 0.6bps. High Yield: 3.953% (prev. 3.925%, six-auction average 4.098%). WI: 3.947%. Tail: 0.6bps (prev. 0.3bps, six-auction avg. -0.7bps). Bid-to-Cover: 2.40x (prev. 2.49x, six-auction avg. 2.6x). Dealers: 12% (prev. 9.8%, six-auction avg. 9.7%). Directs: 31.6% (prev. 12.8%, six-auction avg. 22.2%). Indirects: 56.4% (prev. 77.4%, six-auction avg. 68.1%).
COMMODITIES
Oil prices were choppy, but ultimately settled more or less unchanged amid a week of notable gains.
US EIA- Nat Gas, Change Bcf w/e 75.0bcf vs. Exp. 74.0bcf (Prev. 90.0bcf)
Iraq’s PM confirmed an agreement has been reached to export oil produced from Kurdish oil fields through the Iraqi-Turkish pipeline, according to Reuters.
GEOPOLITICAL
NATO
European officials privately told Russia they are ready to shoot down jets and view Russia’s Estonia incursion as deliberate, according to Bloomberg.
US President Trump said he wants Turkish President Erdogan to stop buying Russian oil and that Putin ought to stop the war in Ukraine, adding that NATO’s relationship with the US is the strongest it has ever been. He noted that Erdogan could have a big influence over Russia’s war in Ukraine, according to Reuters.
Dutch PM warned Russia over further incursions into NATO airspace, according to Bloomberg.
Denmark’s Chief of National Police said a state of national emergency may be raised, according to TV 2 Denmark cited by Faytuks. Danish police later confirmed operations against unidentified drones over Aalborg Airport have concluded, saying drones previously spotted in North Jutland are no longer present in the airport’s airspace. The National Police Chief added that there were events at military facilities. Danish Defence Minister said there is no evidence of a link to Russia and the decision was taken not to shoot the drones. Russia’s Embassy denied involvement in the incident, according to Reuters.
Polish PM Tusk, commenting on President Trump’s language about Ukraine reclaiming its land, said “Behind this surprising optimism lies a promise of reduced US involvement and a shift of responsibility for ending the war to Europe”, according to Reuters.
Danish PM said she spoke with NATO Secretary General Rutte about the serious situation related to drones over Danish airports, and they agreed NATO would work with Denmark on steps to ensure safety and security, according to Reuters.
German Defence Minister Pistorius said two Russian Luch Olymp surveillance satellites are currently pursuing two Intelsat satellites monitored by German forces. He said the threat Russia poses in space can no longer be ignored and that offensive capabilities in space need to be discussed, according to Reuters.
German Chancellor Merz said Germany will take all measures towards effective deterrence to stop repeated violations of airspace, according to Reuters.
The US deployed jets against Russian bombers near Alaska, according to CNN.
NATO Secretary General Rutte said it is clear Russian President Putin is not willing to play ball on talks, and regarding Trump’s comments that NATO should shoot down Russian planes that violate airspace, he said this would be done if necessary, according to Reuters.
RUSSIA-UKRAINE
Ukraine attempted to attack the Kursk nuclear power plant, TASS reported, though the plant continues to operate normally and no casualties were reported, according to Reuters.
Ukraine’s naval drones attacked Russian ports in Novorossiysk and Tuapse on Wednesday, temporarily suspending operations at Transneft’s oil pumping complex and oil terminal, according to an intelligence source cited by Reuters.
The IAEA said a drone was downed and detonated about 800 metres from the perimeter of Ukraine’s South nuclear power plant overnight; 22 UAVs were observed late last night and this morning, and the IAEA team heard gunfire and explosions, according to Reuters.
MIDDLE EAST
US President Trump said he thinks he will make a major announcement on Syria today, according to Reuters.
WSJ’s Norman reported his understanding is that Iran is still heading for snapback sanctions, with no change over the last 24 hours despite diplomatic efforts, according to WSJ.
Israel struck Sanaa, the Houthi-run capital in Yemen, according to Reuters.
Iran’s Foreign Minister told the UK Foreign Minister that Tehran had offered multiple diplomatic initiatives to keep diplomacy open, but the E3 decided to snap back UN sanctions to align with the US “maximum pressure” policy. He said the consequences of the snapback will be upon those who initiated and supported it, according to Aslani via X.
US President Trump said there were good talks on Gaza and that he had really good talks with Israeli PM Netanyahu; he added that a hostage deal could happen soon, according to Reuters.
OTHERS
Turkish President Erdogan said the US and Turkey will discuss F-35s, Halkbank, and a range of topics, according to Reuters.
US President Trump said he had good talks with Turkish President Erdogan and that the meeting was conclusive on many things, according to Reuters.
ASIA-PAC
NOTABLE HEADLINES
India’s government has drafted a proposal to relax foreign investment rules for e-commerce exports, according to Reuters.
China’s BYD slashed prices of its second-generation Qin Plus sedan by 10,000 yuan until the end of the year, according to Reuters.
EU/UK
NOTABLE HEADLINES
Italy’s Economy Minister said the digital euro plan will take two years to be implemented, according to Reuters.
ECB’s Cipollone said they stand ready to react if inflation is expected to deviate significantly from the 2% target in the medium term, according to the ECB.
Volkswagen (VOW3 GY) cut output and paused production at its German EV plants, according to Bloomberg.
DATA RECAP
German GfK Consumer Sentiment (Oct) -22.3 vs. Exp. -23.3 (Prev. -23.6, Rev. -23.5)
French Consumer Confidence (Sep) 87.0 vs. Exp. 87.0 (Prev. 87.0)
UK CBI Distributive Trades (Sep) -29.0 (Prev. -32.0)
LATAM
Banxico cut rates by 25bps as expected to 7.50%, Heath dissented in favour of maintaining rates at 7.75%.
BCB’s Galipolo said unemployment levels are a positive surprise and hitting record lows, adding that the central bank has no specific strategy for FX swaps. He noted the central bank is well positioned to operate under a floating FX rate and intervene only in cases of market dysfunction, according to Reuters.
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