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APAC stocks were mixed after an early sell-off following the losses stateside, where tech underperformed amid valuation concerns. European equity futures indicate a lower cash market open with the Euro Stoxx 50 future down 0.7% after the cash market closed with losses of 0.3% on Tuesday. The USD rally has paused for breath (DXY remains above 100), EUR/USD is unable to reclaim 1.15 status, USD/JPY failed to hold below 153. Global fixed income benchmarks remain supported, crude futures lack direction, Gold remains below USD 4k. Looking ahead, highlights include German Industrial Orders, EZ, UK & US Final PMI, EZ Producer Prices, US ADP, US ISM Services PMI, Riksbank, NBP & BCB Policy Announcements, ECB Wage Tracker, US Supreme Court Tariff hearing begins, Speakers including ECB's Nagel, BoE's Breeden, BoC's Macklem & Rogers, Riksbank's Jansson, US QRA, Supply from Germany. Earnings from BMW, Novo Nordisk, Pandora, AMC, Arm, Snap & McDonald’s SNAPSHOT Newsquawk in 3 steps: 1. Subscribe to the free premarket movers reports 2. Listen to this report in the market open podcast (available on Apple and Spotify) 3. Trial Newsquawk’s premium real-time audio news squawk box for 7 days US TRADE EQUITIES US stocks declined with underperformance in the Nasdaq 100 as the Tech sector was weighed on by weakness in Palantir (-8%) post-earnings, which also pressured other AI plays, such as NVDA (-4%). Palantir reported a stellar quarter and raised guidance, although some were concerned by their elevated valuation, whilst also adding to the downbeat picture was Michael Burry's latest 13-F showing him having bought 5mln put options in PLTR, and 1mln puts in NVDA. Given the pullback in PLTR shares after a solid report, other sectors with stretched valuations have also taken a hit, including uranium/nuclear and rare earth stocks. SPX -1.16% at 6,773, NDX -2.07% at 25,436, DJI -0.53% at 47,086, RUT -1.76% at 2,427. Click here for a detailed summary. TARIFFS/TRADE US President Trump posted the "United States Supreme Court case is, literally, LIFE OR DEATH for our Country. With a Victory, we have tremendous, but fair, Financial and National Security. Without it, we are virtually defenseless against other Countries who have, for years, taken advantage of us. Our Stock Market is consistently hitting Record Highs, and our Country has never been more respected than it is right now. A big part of this is the Economic Security created by Tariffs, and the Deals that we have negotiated because of them." US President Trump posts it was his "Great Honor to just meet with high level Representatives of Switzerland. We discussed many subjects including, and most importantly, Trade and Trade Imbalance. The meeting was adjourned with the understanding that our Trade Representative, Jamieson Greer, will discuss the subjects further with Switzerland’s Leaders." White House posted the Executive Order modifying duties addressing the synthetic opioid supply chain in China. White House said it is not interested in selling to China at this time regarding NVIDIA (NVDA) Blackwell chips. China announced it will suspend 24% US tariffs for a year but will maintain 10% US tariffs, while it will lift some tariffs on US agriculture goods from November 10th. Chinese Premier Li said some unilateral and protectionist measures have had severe impacts on the economic world order, while he said they should uphold equality and mutual benefit and consolidate the foundation of legitimate common interest. Li stated that it is all the more important for them to stay committed to mutual cooperation and pursue free trade when economic growth is slowing. Furthermore, he said China is willing to stand with all parties to foster an open and inclusive environment, as well as commented that countries should not seek unilateral wins at the expense of others, and need to balance their interests against the greater good. White House said US President Trump feels positively about the relationship with India and trade teams continue to be in serious discussions, while it added that President Trump and Indian PM Modi speak frequently. NOTABLE HEADLINES US Transportation Secretary Duffy warned that the US DoT may need to close some airspace if the government shutdown continues. Democrat Mikie Sherrill won the New Jersey Governor election and Democrat Abigail Spanberger won the Virginia Governor election, while Democrat Zohran Mamdani won the New York mayoral election. APAC TRADE EQUITIES APAC stocks were mixed after an early sell-off following the losses stateside, where tech underperformed amid valuation concerns. ASX 200 was rangebound as resilience in defensives and the top-weighted financial sector provided a cushion. Nikkei 225 suffered heavy losses and briefly fell beneath the 50,000 level with the downturn led by tech-related stocks. KOSPI collapsed alongside the tech bloodbath, which prompted the Korea Exchange to briefly trigger sidecars on the KOSPI and KOSDAQ. Hang Seng and Shanghai Comp are mixed after paring most of their earlier losses following somewhat mixed Chinese RatingDog Services and Composite PMI data in which the former marginally topped estimates, but the composite figure slowed, while both the US and China made adjustments to their tariffs following last week's Trump-Xi talks. US equity futures (ES -0.2%, NQ -0.4%) extended on the tech-led declines which had been triggered by valuation concerns. European equity futures indicate a lower cash market open with the Euro Stoxx 50 future down 0.7% after the cash market closed with losses of 0.3% on Tuesday. FX DXY paused its recent run advances in which the DXY surpassed the 100.00 level for the first time since the beginning of August amid the reassessment of Fed rate cut expectations and the risk-off tone across equities. Catalysts from the US were light as the shutdown matched the longest on record (35 days), although there was some attention on elections in which New Jersey and Virginia governor races, as well as the New York City Mayor race were all won by Democrat candidates, while data is set to return on Wednesday, including ISM Services and monthly ADP jobs. EUR/USD rebounded off the prior day's trough but remained beneath 1.1500 amid a lack of catalysts from the bloc. GBP/USD lingered around 7-month lows after yesterday's underperformance as UK Chancellor Reeves's pre-Budget speech, failed to alleviate fiscal concerns. USD/JPY retreated amid the early bloodbath in stocks but then bounced off a floor around the 153.00 as stocks came back from extremes, while there was little reaction seen to outdated minutes from the BoJ's September meeting, which noted that members agreed current real interest rates are very low, and the BoJ is likely to continue raising interest rates if its economic and price projections materialise. Antipodeans were choppy amid the fluctuations in stocks and somewhat mixed Chinese PMI data. PBoC set USD/CNY mid-point at 7.0901 vs exp. 7.1336 (Prev. 7.0885) FIXED INCOME 10yr UST futures benefitted from an early flight to quality, but with further upside capped ahead of the QRA. Bund futures initially gained amid the widespread risk-off mood but then reversed course as some of the losses in stocks were plugged, while participants now await German Industrial Orders and Bund issuances. 10yr JGB futures tracked the upside in global peers amid the tech sell-off, although JGBs later saw a bout of pressure following a weaker 10yr auction. COMMODITIES Crude futures lacked direction after the prior day's whipsawing and with demand not helped by the mixed private sector inventory data which showed a much larger-than-expected build in headline crude stockpiles, but wider-than-expected drawdowns for gasoline and distillate inventories. US Private Energy Inventory Data (bbls): Crude +6.5mln (exp. +0.6mln), Distillate -2.5mln (exp. -2mln), Gasoline -5.7mln (exp. -1.1mln), Cushing +0.4mln. Saudi Aramco CEO said most of their capital is going into gas growth, while they are looking into lithium and at first processing plants by 2027. Spot gold nursed some of yesterday's losses after recently sliding below the USD 4,000/oz level and amid a haven bid. Copper futures traded indecisively after retreating yesterday alongside the risk-off environment across global markets. CRYPTO Bitcoin saw two-way trade and initially dipped beneath the USD 100k level before recouping all of its early losses. NOTABLE ASIA-PAC HEADLINES BoJ Minutes from the September 18th-19th Meeting stated that members agreed current real interest rates are very low, and the BoJ is likely to continue raising interest rates if its economic and price projections materialise. Furthermore, members agreed there is high uncertainty on trade policy developments and their impact on the economy, while a few members said it is appropriate to maintain current monetary policy to scrutinise trade policy impact on the domestic and overseas economy, as well as prices. DATA RECAP Chinese RatingDog Services PMI (Oct) 52.6 vs. Exp. 52.5 (Prev. 52.9) Chinese RatingDog Composite PMI (Oct) 51.8 (Prev. 52.5) GEOPOLITICS MIDDLE EAST IAEA's Grossi said Iran must seriously improve cooperation with UN inspectors to avoid heightening tensions with the West, according to FT. OTHER US President Trump’s administration has developed a range of options for military action in Venezuela, including direct attacks on military units that protect President Maduro and moves to seize control of the country’s oil fields, according to NYT citing US officials. The report noted that President Trump has yet to make a decision about how or even whether to proceed, and officials said he was reluctant to approve operations that may place American troops at risk or could turn into an embarrassing failure. However, many of his senior advisers are pressing for one of the most aggressive options of ousting Maduro from power. North Korea shows signs of preparing to launch additional spy satellites aided by Russia, while it was also reported that North Korean leader Kim could conduct a nuclear test in the near future if he wants, according to South Korea's spy agency. US Secretary of Defense Hegseth said the US military carried out a lethal kinetic strike on a vessel in international waters in the Eastern Pacific. EU/UK NOTABLE HEADLINES UK Chancellor Reeves is to urge insurance bosses to increase investment in London, according to FT. The Times' Shadow MPC says that BoE should wait to cut rates again until after the November 26th budget. The decision was via a narrow 5-4 vote. Loading...
