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APAC stocks were mostly subdued following the mixed lead from Wall St, where the majority of sectors declined but tech outperformed. RBA kept Cash Rate unchanged at 3.60%, as expected; judged some of the increase in underlying inflation in Q3 was due to temporary factors. European equity futures indicate a lower cash market open with Euro Stoxx 50 future down 0.8% after the cash market closed with gains of 0.3% on Monday. DXY is flat, antipodeans lag with AUD softer post-RBA. JPY outperforms, underpinned by a haven bid and more verbal intervention. In a rare pre-budget press conference today, UK Chancellor Reeves will indicate she is prepared to break Labour’s manifesto promise not to raise income tax, according to The Telegraph. Looking ahead, highlights include Canadian Trade, US RCM/TIPP, New Zealand Jobs, RBNZ FSR, BoJ Minutes (Sep), French Assembly PLF vote process begins, ECB’s Lagarde, Nagel and Balz, BoE’s Breeden & Fed's Bowman, Supply from UK & Germany. Earnings from Phillips, Evonik, Fresenius MC, Ferrari, BP; AMD, Supermicro, Marathon, Pfizer & Uber. 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 ultimately closed mixed, with NDX outperforming while RUT and Dow lagged. Upside in the SPX and NDX was primarily due to the heavy cap tech stocks, with Amazon (AMZN) lifting the indices after it inked a USD 38bln deal with OpenAI to supply NVIDIA (NVDA) chips. However, breadth in the market was weak with only Consumer Discretionary, Tech and Utilities posting gains while the equal-weight S&P 500 (RSP) was sold. Elsewhere, T-notes settled flat in choppy trade, selling off from morning highs on a slew of IG deals, including a chunky USD 17.5bln from Google parent Alphabet. In FX, the Dollar saw marginal gains, but CHF was the clear laggard after soft inflation metrics in Switzerland. Oil prices settled slightly firmer in choppy trade. Oil gapped higher after the OPEC+ agreement on Sunday, which hiked output by 137k BPD as expected in December, but is to pause in Q1. Meanwhile, US President Trump threatened strikes in Nigeria due to the killing of Christians in the country. Economic data saw a miss in the ISM Manufacturing PMI report, but the Atlanta Fed GDP upgraded its Q3 growth estimate in the wake of the data and is set to be updated on Wednesday after the ISM Services PMI report. SPX +0.17% at 6,852, NDX +0.44% at 25,973, DJI -0.48% at 47,337, RUT -0.33% at 2,471. Click here for a detailed summary. TARIFFS/TRADE US Treasury Secretary Bessent said he will be at the Supreme Court to emphasise the importance of tariffs, according to Fox News. US Trump admin officials reportedly torpedoed NVIDIA's (NVDA) push to export AI chips to China, according to WSJ sources. BoC Governor Macklem said US companies are largely paying for US tariffs. South Korea’s Industry Ministry said it is to expand financial and policy support for exporters facing US and EU steel tariffs, while South Korea will restructure the steel sector as the industry shows mounting signs of a crisis, and will also take pre-emptive steps to adjust production capacity in oversupplied products. Panama Canal chief said reduction in world trade is likely next year amid economic slowdown and expects passage of LPG vessels to continue increasing, while the chief said Panama Canal’s market share of US LPG exports to Asia rising to more than 95% from 80% and that the long-term reservation system allocated more slots this time than in the previous edition. Chinese Commerce Ministry says regarding Nexperia, that it urges the Dutch government to stop interfering company affairs, adds will resolutely safeguard rights and interests of firms. Dutch government has not demonstrated a constructive attitude and actions, and escalated the global supply chain crisis despite China's reasonable demands. Netherlands should bear the full responsibility of turmoil and chaos in the global semiconductor production and supply chain. NOTABLE HEADLINES Fed Governor Cook said every meeting is live and policy is not on a pre-set path, while she stated the recent cut was appropriate due to job market risks and risks to both sides of the mandate are elevated. Cook commented that the Fed uses a lot of alternative data, which are all important to take into account and that it is important to be timely and use the most current incoming data for the December rate decision. Fed's Daly (2027 voter) said she supported a rate cut and that a rate cut was appropriate, while she added that inflation is still above target, and need to get it down. Daly said the labour market has softened quite a bit and that they need to keep policy modestly restrictive. Furthermore, she has an open mind on December and stated that 50bps of cuts this year makes the Fed better positioned, while they need to make a decision that balances risks. US President Trump said he is going to ask the Transportation Secretary to take a look at terminating New York City congestion pricing, while he added it is highly unlikely that he will be contributing federal funds to NYC if Mamdani wins the mayoral race. US Treasury expects to borrow USD 569bln in privately-held net marketable debt in the Oct-Dec quarter (prev. expected USD 590bln), assuming an end-Dec cash balance of USD 850bln (prev. 850bln). APAC TRADE EQUITIES APAC stocks were mostly subdued following the mixed lead from Wall St, where the majority of sectors declined but tech outperformed amid strength in some of the mega-caps following deal announcements. ASX 200 was softer with the downside led by the utilities, materials, mining and resources industries, while participants also awaited the RBA decision in which the central bank kept the Cash Rate unchanged at 3.60%, as expected. Nikkei 225 swung between gains and losses with participants indecisive on return from the extended weekend and alongside a quiet calendar. Hang Seng and Shanghai Comp were lacklustre amid quiet pertinent catalysts and after a report that Trump admin officials torpedoed NVIDIA's push to export AI chips to China. Nonetheless, the downside was limited amid a slew of comments from the Beijing officials at the Global Financial Leaders' Investment Summit in Hong Kong, including from the PBoC's Deputy Governor, who stated they will enhance Hong Kong's status as a global financial centre and will strengthen policy support. US equity futures (ES -0.9%, NQ -1.2%) gradually retreated following the prior day's mixed performance and weak US ISM data. European equity futures indicate a lower cash market open with Euro Stoxx 50 future down 0.8% after the cash market closed with gains of 0.3% on Monday. FX DXY kept afloat and briefly reclaimed the 100.00 status for the first time since the beginning of August, although upside was capped after recent weak ISM data and with little reaction seen to the latest Fed commentary including from Fed's Cook (voter) who said every meeting is live and policy is not on a pre-set path, while Daly (2027 voter) said she supported last week's rate cut decision, but is keeping an open mind on December. EUR/USD briefly dipped to sub-1.1500 territory, with the single currency not helped by the recent soft PMI data from the bloc. GBP/USD was subdued following recent indecision amid quiet pertinent catalysts and ongoing UK fiscal woes. USD/JPY saw two-way trade alongside the choppy risk environment and initially gained a firmer footing at the 154.00 handle, but then slid from intraday highs. Antipodeans lacked demand alongside the mixed overnight risk sentiment, while there was some slight pressure seen after the RBA rate decision in which it kept rates unchanged at 3.60%, as expected, and raised its projections for inflation, although its forecasts were based on the technical assumption for rates to be lowered 3.4% in June 2026, and 3.3% afterwards. FIXED INCOME 10yr UST futures were rangebound after the prior day's whipsawing amid weak ISM data and corporate issuances. Bund futures traded sideways near a 3-week low with price action contained ahead of ECB speakers and German supply. 10yr JGB futures tracked the recent downside in global counterparts as Japanese participants returned from the long-weekend and with little in the way of catalysts or data releases to spur prices. COMMODITIES Crude futures lacked demand after the prior day's choppy performance following the recent OPEC+ decision and comments from the OPEC Secretary-General, while a source report noted that the OPEC+ decision to keep oil output targets steady in Q1 came after Russia lobbied for the pause because it would struggle to increase exports due to Western sanctions. OPEC+ decision on Sunday to keep oil output targets steady in Q1 came after Russia lobbied for the pause because it would struggle to increase exports due to Western sanctions, according to Reuters citing sources. Spot gold trickled lower with prices back beneath the USD 4,000/oz level amid a slightly firmer dollar. Copper futures were pressured amid the mostly downbeat mood in Asia. CRYPTO Bitcoin was indecisive and returned to flat territory after several failed attempts to hold above the USD 107k level. NOTABLE ASIA-PAC HEADLINES Chinese President Xi met with Russian Prime Minister Mishustin and said in the meeting that the sides should steadily expand mutual investment and maintain close communication, as well as create new cooperation growth points and cooperate in areas such as AI, digital economy and green development. Chinese Vice Premier He said Hong Kong’s competitiveness and attractiveness prove the city thrives under the 'One Country, Two Systems' framework, while he added that Hong Kong will further enhance and improve its status as a global financial centre. He also stated that Hong Kong should strengthen cooperation with the mainland and hopes that Hong Kong will continue to play an active role in connecting the world and advancing global governance. Furthermore, he stated that the global economic environment has seen new challenges this year and it is important to deepen trade and economic activities with other countries. PBoC Deputy Governor said will work to enhance Hong Kong's status as a global financial centre, and strengthen policy support. China's Financial Regulator Vice Minister said Hong Kong-funded institutions will be supported to develop in the mainland, and they will continue to deepen the Connect programmes, while they will also prevent cross-border financial risks. China reportedly offers its tech giants cheap power to boost domestic AI chips, according to FT. RBA kept Cash Rate unchanged at 3.60%, as expected, with the decision unanimous. RBA noted that inflation has recently picked up and domestic economic activity is recovering, but the outlook remains uncertain. The board judged it was appropriate to remain cautious, updating its view of the outlook as the data evolves, and it remains alert to the heightened level of uncertainty about the outlook in both directions, while it judged that some of the increase in underlying inflation in the September quarter was due to temporary factors. In terms of the Quarterly Statement on Monetary Policy, the RBA sharply raised forecasts for core inflation out to the second quarter of 2026 with June 2026 Trimmed Mean Inflation now seen at 3.2% (prev. forecast 2.6%) and June 2026 CPI now seen at 3.7% (prev. forecast 3.1%). Furthermore, it stated that recent data suggests there could be more excess demand in the economy than previously thought, while its forecasts assume a cash rate of 3.6% through the end of 2025, 3.4% in June 2026, and 3.3% afterwards. RBA Governor Bullock said at the post-meeting press conference that it is possible less easing might be needed in this round than in the past, while she stated that they did not consider cutting rates and that a rate hike was also not considered. Bullock said they discussed holding rates and the outlook for policy, and are being cautious, while it is possible that there are no more rate cuts, and possible that there are some more cuts. Furthermore, she said the board believes policy is close to neutral and will go meeting by meeting, as well as noted that the board does not have a bias on policy and they are at the right spot on monetary policy at the moment. Japan's Finance Minister Katayama says seeing one-sided rapid moves and closely watching FX moves with a high sense of urgency. DATA RECAP South Korean CPI MM (Oct) 0.3% vs. Exp. 0.0% (Prev. 0.5%) South Korean CPI YY (Oct) 2.4% vs. Exp. 2.1% (Prev. 2.1%) GEOPOLITICS MIDDLE EAST Palestinian media reported that IDF vehicles fired at areas in the Maghazi refugee camp in the central Gaza Strip, according to Sky News Arabia. RUSSIA-UKRAINE Blast at a petrochemical plant in Russia's Bashkortostan caused the partial collapse of a workshop, according to TASS. European Commission draft text stated that Ukraine is showing remarkable commitment to joining the EU but must decisively reverse recent negative trends in the fight against corruption, and boost rule of law reforms, according to Reuters. OTHER Peru's Foreign Minister announced that the country decided to break diplomatic relations with Mexico, due to Mexico's unfriendly act of starting a process to grant asylum to former PM Betssy Chavez. EU/UK NOTABLE HEADLINES In a rare pre-budget press conference today, UK Chancellor Reeves will insist she will take the required steps to right public finances for "years to come", according to The Telegraph. The article suggests she will indicate that she is prepared to break Labour’s manifesto promise not to raise income tax. Those briefed on the speech suggest that Reeves will outline big-picture arguments rather than revealing policy decisions. UK PM Starmer informed Labour MPs at a private meeting that the budget would be determined by "tough but fair decisions", adding that the backdrop to the fiscal update was "worse than even we feared". The article frames it as increasing speculation of income tax rises, by Starmer saying they would reject austerity and protect the NHS. (FT) French Socialist Party Olivier said his party will give the government additional time to come up with a budget it deems acceptable before deciding whether to use its power in parliament to topple the administration, according to Bloomberg. Loading...
