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US President Trump said the meeting with Chinese President Xi will be three hours long before returning back to the US; says things will work out very well with Xi on Thursday. European and US equity futures are mixed; NQ outperforms, boosted by NVIDIA as it nears USD 5tln market cap. USD is firmer in the run-up to FOMC, AUD leads as hot CPI dashes RBA rate cut hopes. Fixed income contained awaiting the FOMC, with a mild bearish bias potentially stemming from positive trade updates. XAU returns back above USD 4k/oz, LME Copper reaches new ATHs amid positive US-China trade optimism US Pending Homes (Sep), FOMC & BoC Policy Announcements; US President Trump to meet South Korea's Leader, Speakers including Fed Chair Powell & BoC's Macklem, Supply from the US. Earnings from Meta, Microsoft, Alphabet, ServiceNow, Starbucks, eBay, Verizon, Boeing, CVS, Caterpillar, Etsy, Centene, Phillips 66. 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 TARIFFS/TRADE US President Trump said he had a great trip so far and expects to lower fentanyl-linked tariffs on China, while he will discuss farmers and fentanyl with China. Trump reiterated that he thinks they will have a great meeting with Chinese President Xi and relations with China are very good. Furthermore, Trump said he may speak about NVIDIA's (NVDA) Blackwell chip with Xi. US President Trump posts "Bringing back Trillions of Dollars to USA! A great trip. Dealing with very smart, talented, and wonderful Leaders. Tomorrow, President Xi of China. It will be a great meeting for both!!! President DJT". US President Trump says the meeting with Chinese President Xi will be three hours long before returning back to the US; says things will work out very well with Xi tomorrow. China's COFCO purchased three cargoes totalling 180k tonnes of US soybeans ahead of Trump-Xi meeting, according to sources cited by Reuters. US President Trump posted "For those that are asking, we didn’t come to South Korea to see Canada!" Trump separately commented that a trade deal with South Korea will be finalised very soon. South Korean President Lee's office said that South Korean President Lee and US President Trump will discuss trade, investment and Korean peace, while it noted that Lee is to gift a mock-up of a golden crown to Trump and hopes that Trump’s visit will lead to a tangible outcome of cooperation. US Senate passed a bill to terminate Trump tariffs against Brazil. Chinese President Xi confirms meeting with US President Trump on Oct 30th in South Korea, via Xinhua. Chinese Foreign Ministry, on the meeting between Presidents Trump and Xi, says will inject new momentum into steady development of US-China relations; stands ready to work with the US for positive outcomes. Japanese PM Takaichi told US President Trump that banning LNG imports from Russia will be difficult according to Nikkei. US President Trump says, "we did reach a deal on trade with South Korea", via Bloomberg. EUROPEAN TRADE EQUITIES European bourses (STOXX 600 +0.1%) are mixed, with price action this morning fairly rangebound awaiting today's key risk events which include the FOMC policy decision and a slew of earnings. European sectors hold a negative bias. Autos takes the top spot, boosted by post-earning strength in Mercedes Benz (+6.9%) - headline Q3 metrics were not so great, but sentiment was already dampened heading into the results and investors may instead focus on the EUR 2bln buyback. Analysts at Jefferies suggested that the divisions figures saw "comfortable beats". Other key movers today; GSK (+3%, headline beats and upgraded 2025 guidance), Deutsche Bank (+1.3%, strong Q3 profit growth), UBS (U/C, strong Q3 Net Income, plans USD 900mln buyback in Q4). US equity futures are mixed with the ES and NQ on a firmer footing whilst the RTY is subdued. The tech-heavy NQ outperforms, boosted by pre-market strength in NVIDIA (+3.2%) after US President Trump said he would discuss Blackwell chips with Chinese President Xi. A slew of earnings set for today, with added focus on Meta, Microsoft and Alphabet. Click for the sessions European pre-market equity newsflow Click for the additional news Click for a detailed summary FX DXY is on a firmer footing and trades at the upper end of a 98.62-99.00 range. Focus this morning has been on the ongoing US-China related updates, which in-brief have been positive. US President Trump said he had a great trip so far and expects to lower fentanyl-linked tariffs on China, while he will discuss farmers and fentanyl with China - most recently the President posted on Truth that "it will be a great meeting" for both countries. Elsewhere, Reuters reported that China's COFCO purchased three cargoes totalling 180k tonnes of US soybeans ahead of Trump-Xi meeting, according to sources cited by Reuters. Focus ahead is ultimately on the Fed policy announcement, where a 25bps cut is expected. Decision aside, traders will be keen on any guidance (particularly in the context of policymakers' visibility surrounding the shutdown), and look out for details on plans to end QT. EUR is on the backfoot and trades within a 1.1620-1.1660 range; largely moving at the whim of the USD, given the lack of European specific newsflow. On the data front, Spanish Estimated GDP Q/Q printed in-line with expectations (0.6%), whilst Y/Y was a touch softer at 2.8% (exp. 3%) - no move in the Single-currency on this. Attention now turns to the ECB on Thursday, but will ultimately lack surprises as markets almost entirely price in no change to the current policy. JPY is very modestly lower today, with USD/JPY trading within a 151.55-152.44 range. Out of favour today after strengthening in the prior session thanks to the US-Japan trade deal and mild haven allure. Some focus has been on US Treasury Sec Bessent who said "The Government’s willingness to allow the Bank of Japan policy space will be key to anchoring inflation expectations and avoiding excess exchange rate volatility". GBP is one of the worst performing currencies today, continuing some of the underperformance seen in the prior session. The Pound has been out of favour recently, following the FT article which suggested Chancellor Reeves may face a GBP 20bln hit to UK public finances after a productivity downgrade. Currently towards the lower end of a 1.3199 to 1.3280 range. Antipodeans are mixed; the Aussie remains a touch firmer but off best levels following the region's hotter-than-expected inflation report, whilst the Kiwi has been dragged lower by the USD. PBoC set USD/CNY mid-point at 7.0843 vs exp. 7.0962 (Prev. 7.0856) Click for a detailed summary Click for NY OpEx Details FIXED INCOME USTs are lower by a handful of ticks, following on from a soft 7yr auction on Wednesday and as traders now await the Fed policy decision. A 25bps cut is all but certain. A decision that will likely be subject to dissent with Miran seemingly set to vote for 50bps again, after remarking since the September Fed that 25bps is too slow a pace of easing. Commentary from Powell will focus on December, -46bps implied by end-2025, and the balance sheet. QT forms the other part of the decision. Desks expect an announcement from the Fed on the balance sheet as Chair Powell suggested that the level of reserves hit an ample level in the coming months vs the current “abundant” level, a point the Fed has previously suggested it would want to hold reserves at. USTs are marginally pressured in a thin 113-11+ to 113-16+ band. Bunds are contained with a very marginal bearish bias, as is the case for USTs. Specifics light so far. Supply once again in focus from Germany, this time Bunds are offered after another dismal Bobl tap earlier in the week. Bunds currently at a 129.47 low, with downside of 10 ticks at most. Moving to France, another chance for a compromise to be found between the Lecornu government and Socialist Party. As Politico reports that the full debate on a French wealth tax (i.e. the Zucman tax) will not happen on Wednesday or Thursday, but is likely on Friday. Currently, the OAT-Bund 10yr yield spread is holding just shy of the 80bps mark. Gilts follow the mood across peers. The morning’s data showed an increase in individual mortgage borrowing to the highest since March 2025 with mortgage approvals also increasing. Activity driven by the effective interest rate on new mortgages dropping to 4.19%, its lowest since January 2023 when the rate was 3.88%. Gilts at the lower-end of a 93.71-89 band, within Tuesday’s 93.62 to 93.96 confines. No real move on the UK auction, which drew a b/c above 3.00x. UK sells GBP 3.75bln 4.125% 2033 Gilt: b/c 3.04x, average yield 4.191%, tail 0.3bps Click for a detailed summary COMMODITIES WTI and Brent are trading choppy today. Morning action saw the complex pressured, despite a bullish private sector inventory report in the prior session. A quite marked bout of pressure was seen at the European cash open, which happened to coincide with commentary via the Israeli military; they suggested that it begun a renewed enforcement of the Gaza ceasefire agreement, after striking the region in the past day. However, this has since entirely reversed, with the complex now slightly higher on the session. Brent Dec'25 trades in a busy USD 63.92-64.79/bbl range. Spot gold is back on a stronger footing today, after a three days of losses. Nothing really fresh for the upside, but likely some modest-buying after falling below the USD 4k mark earlier in the week; as it stands the yellow-metal trades in a USD 3,907.92-4,021.79/oz range and awaits the Fed policy decision. Base metals are entirely in the green, amidst the broadly positive sentiment across the APAC region in anticipation of the Trump-Xi meeting on Thursday. 3M LME Copper currently in a USD 10,987.75-11,146.3/t range. India's MRPL Exec says they will not be purchasing Russian oil due to risks. US Private Energy Inventory Data (bbls): Crude -4.0mln (exp. -0.2mln), Distillate -4.4mln (exp. -1.7mln), Gasoline -6.3mln (exp. -1.9mln), Cushing +1.7mln. Ukraine hits two oil depots in Russian-occupied Crimea, according to an SBU official. Click for a detailed summary NOTABLE DATA RECAP Spanish Estimated GDP QQ (Q3) 0.6% vs. Exp. 0.6% (Prev. 0.8%) Spanish Retail Sales YY (Sep) 4.2% (Prev. 4.5%, Rev. 4.7%) Swiss Investor Sentiment (Oct) -7.7 (Prev. -46.4) UK Mortgage Approvals (Sep) 65.944k vs. Exp. 64.0k (Prev. 64.68k, Rev. 64.963k); Consumer Credit (Sep) 1.491B GB vs. Exp. 1.5B GB (Prev. 1.692B GB, Rev. 1.749B GB); M4 Money Supply (Sep) 0.6% (Prev. 0.4%); Mortgage Lending (Sep) 5.489B GB vs. Exp. 4.1B GB (Prev. 4.308B GB, Rev. 4.277B GB) NOTABLE EUROPEAN HEADLINES Politico reports that the full debate on a French wealth tax (i.e. the Zucman tax) will not happen on Wednesday or Thursday, but is likely on Friday. NOTABLE US HEADLINES US President Trump said they have secured commitments of over USD 18tln in new investments and that probably USD 21tln–22tln of investment is coming into the US by the end of the second term. Trump said he expects 4% GDP growth next quarter and that factories are booming in the US, while he commented that they will not have the Federal Reserve raising rates. GEOPOLITICS Israeli Military says it begins renewed enforcement of Gaza ceasefire agreement. North Korea fired a missile and stated that the missile is part of its nuclear forces, according to KCNA. Chinese Defence Ministry said it held talks with India about the border, while it added that both sides had active and in-depth communication on the control of the western section of the China-India border. Furthermore, they agreed to continue to maintain communication and dialogue through military and diplomatic channels. US Defense Secretary Hegseth said the security situation around Japan remains severe and noted that their alliance is critical to deterring Chinese military aggression. "The strikes in the Gaza Strip are nearing completion", according to i24's Stein citing Israeli officials from Jerusalem Post; "In light of the ongoing violations, additional response measures will be taken.". CRYPTO Bitcoin is a little lower and trades around USD 113k, with Ethereum posting losses to a larger magnitude and hovers around USD 4k. APAC TRADE APAC stocks were predominantly in the green following the tech strength on Wall St, where most indices extended on record highs, while participants now await the approaching flurry of risk events, including the FOMC and mega-cap earnings. ASX 200 retreated with the index dragged lower by notable weakness in health care, real estate, industrials, financials and tech, while firmer-than-expected inflation data further dampened hopes for a cut at next week's RBA meeting. Nikkei 225 extended its rally and outperformed against regional peers after climbing above the 51,000 level for the first time, with tech stocks buoyed after the gains in US counterparts and strong Advantest earnings. Shanghai Comp was positive but with gains capped amid thinner volumes, with Stock Connect trade shut alongside the closure of markets in Hong Kong for a holiday, while it was also reported that China's COFCO purchased 180k tonnes of US soybeans ahead of the Trump-Xi meeting. NOTABLE ASIA-PAC HEADLINES South Korean President Lee said the global economy is facing various challenges, including supply chain shifts, while he added that a deepening trade and investment partnership is fundamental to Asia-Pacific nations, and he will propose an AI initiative at the APEC summit. US Treasury Secretary Bessent commented that he looks forward to working with Japan's Finance Minister Katayama and is encouraged by her understanding of how Abenomics has moved from a reflationary policy to a program that must balance growth and inflation concerns. Bessent also stated that "The Government’s willingness to allow the Bank of Japan policy space will be key to anchoring inflation expectations and avoiding excess exchange rate volatility." Japanese Chief Cabinet Secretary Kihara said 'no comment' on US Treasury Secretary Bessent’s X post, while Kihara added that monetary policy falls under the jurisdiction of the Bank of Japan and he expects the BoJ to conduct monetary policy to appropriately achieve the inflation target. Furthermore, he said the government will continue to closely coordinate with the BoJ. DATA RECAP Australian CPI QQ (Q3) 1.3% vs. Exp. 1.1% (Prev. 0.7%); YY (Q3) 3.2% vs. Exp. 3.0% (Prev. 2.1%) Australian RBA Trimmed Mean CPI QQ (Q3) 1.0% vs. Exp. 0.8% (Prev. 0.6%); YY (Q3) 3.0% vs. Exp. 2.7% (Prev. 2.7%) Australian RBA Weighted Median CPI QQ (Q3) 1.0% vs. Exp. 0.9% (Prev. 0.6%); YY (Q3) 2.8% vs. Exp. 2.7% (Prev. 2.7%) Australian Weighted CPI YY (Sep) 3.50% vs. Exp. 3.10% (Prev. 3.00%) Australian CPI Annual Trimmed Mean YY (Sep) 2.80% (Prev. 2.60%) Loading...
