Copyright ZeroHedge
US Senate voted 60 vs 40 to advance the government funding bill through the procedural hurdle, moving it closer towards passage, after 8 Democrats supported the measure in a rare Sunday session. European and US equity futures are stronger across the board as senators take first steps to ending the US government shutdown; NQ +1.5%. USD softer against high-beta FX but higher against havens amid the risk-on mood. USTs slip on US Government shutdown related progress, Gilts digest reports of a dividend tax hike. Commodities follow the positive sentiment stateside and constructive Chinese inflation figures. Looking ahead, highlights include Chinese M2 & New Yuan Loans (Oct), Speech from Fed's Daly, Musalem, Supply from the UK. 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 USTR announced the suspension of action in the Section 301 investigation of China's targeting of maritime logistics and shipbuilding sectors for dominance, with the action to be suspended for one year as of 00:01 EST on November 10th, while the USTR said the US will negotiate with China pursuant to Section 301 regarding the issues raised in the investigation. FBI Director Patel visited China last week to talk about fentanyl and law enforcement, according to sources cited by Reuters. China’s Commerce Ministry said it suspended the 2024 ban on approving exports to the US of dual-use items related to gallium, germanium, antimony, and superhard materials until 27th November 2026. China halted special port fees for US vessels for one year and removed sanctions on US-linked units of Hanwha Ocean (042660 KS) for a year. China’s Commerce Ministry said China has taken measures to exempt the export of Nexperia chips compliant with civilian use from export controls, and it welcomes the European side to continue to urge the Dutch side to correct ‘wrongful’ practices. Mofcom also said that China hopes the Netherlands will promote the early resolution of the Nexperia semiconductor issue, and that China agreed to a request from the Dutch Economics Ministry to send officials to China for talks. EU Trade Commissioner Sefcovic said they welcome confirmation given by China’s MOFCOM on further simplification of export procedures for Nexperia chips to EU and global clients. India and Australia held further talks on boosting trade and economic ties, while they reaffirmed a desire for an “early conclusion” of a Comprehensive Economic Cooperation Agreement, according to Bloomberg citing a statement by the Indian government after India’s Commerce Minister Goyal met Australian Trade Minister Farrell. China Commerce Ministry said it makes adjustments to management catalogues of drug-related precursor chemicals; will require license for export of certain chemicals to the US, China, Canada and Mexico. EUROPEAN TRADE EQUITIES European bourses (+1.3%) are stronger across the board, with sentiment boosted amidst progress related to the US Government shutdown. Price action saw indices open on a strong footing and continue to rise as the morning progressed. European sectors are almost entirely in the green, with a clear cyclical bias. Tech and Basic Resources leads whilst Optimised Personal Care lags. For Basic Resources specifically, the sector has been lifted by upside across underlying metals prices - upside facilitated by the risk sentiment and better-than-expected Chinese inflation figures over the weekend. US equity futures (ES +1%, NQ +1.4%, RTY +1.2%) are entirely in the green, with clear outperformance in the tech-heavy NQ. Overall, sentiment boosted by the shutdown-related progress; on that, eight democrats voted with Republicans to advance a deal which would reopen the government and keep it funded until the end of January. Separately, NVIDIA (+3.5%) benefits from the risk tone and after CEO Huang said that the Co. has very strong demand for Blackwell chips and asked TSMC (2330 TT) for more wafers to meet strong AI demand. Click for the sessions European pre-market equity newsflow Click for the additional news Click for a detailed summary FX The DXY trades choppily after a rangebound APAC session, showing a mixed tone against major peers as participants digest upbeat US–China trade headlines and optimism over a potential resolution to the US government shutdown. The latter followed reports that eight Democrats backed the Republican spending bill to advance past a key procedural vote. Looking ahead, the data docket is void of any pertinent releases, so focus will be on speeches from Fed's Daly and Musalem. The DXY currently holds within a tight 99.46–99.74 band, comfortably inside Friday’s broader 99.40–99.87 range. EUR/USD trades without clear direction around the 1.1550 mark amid a lack of fresh drivers from the Eurozone, while ECB’s Sleijpen warned against rushing into the issuance of joint European bonds, arguing such a move would ultimately burden the bloc with higher debt levels. Regional newsflow was light through the morning, leaving the pair largely at the mercy of broader dollar dynamics. Despite the softer USD backdrop, the euro failed to meaningfully capitalise, with upside momentum likely constrained by sizeable option expiries clustered below and around the 1.1500 handle. EUR/USD currently trades within a 1.1542–1.1583 band. USD/JPY climbed at the open as improved sentiment surrounding US–China trade ties and renewed hopes for a US government reopening drove outflows from haven currencies. The JPY stands as the clear laggard among the majors, with moves largely reflecting an unwind of prior risk premia rather than fresh domestic developments. Comments from Japanese PM Takaichi ahead of the European open failed to elicit any notable market reaction. The pair gapped higher from Friday’s 153.41 close, opening at 153.77 before reclaiming the 154 handle. USD/JPY now trades within a 153.40–154.23 range. GBP/USD eased slightly overnight from last week’s highs but remained confined to a narrow range around the 1.3150 mark amid a quiet news backdrop. The high-beta currency finds modest support from a softer dollar and improved risk sentiment, though gains are capped as traders exercise caution ahead of the November 26th Budget. The Telegraph reported overnight that UK Chancellor Reeves is preparing to raise the dividend tax rate as part of fiscal tightening efforts. GBP/USD currently trades within a 1.3136–1.3184 range. The Antipodeans are the standout gainers amid a broadly constructive risk tone and ongoing USD softness, benefiting from the easing in US–China trade tensions and firmer Chinese inflation data over the weekend. Chinese CPI and PPI figures surprised modestly to the upside, reinforcing optimism around domestic demand stabilisation. AUD outpaced its Kiwi counterpart, aided by strength in gold and copper prices, while NZD’s gains were more measured as AUD/NZD extended its advance beyond the 1.1550 mark. China will raise its retail prices of gasoline and diesel from Tuesday, based on recent changes in international oil prices, according to Xinhua. Click for a detailed summary Click for NY OpEx Details FIXED INCOME USTs are underperforming today and currently reside at session lows within a 112-15 to 112-23 range. Downside comes after a week of safe haven-related inflows after a string of poor private labour market figures, downbeat UoM sentiment metrics, AI-bubble related fears and ongoing US government shutdown; the latter has recently shown signs of progress, which has boosted risk sentiment today. In terms of details, the US Government shutdown is showing some early signs of progress after eight democrats voted with Republicans to advance a deal which would reopen the government and keep it funded until the end of January. Price action today has only really been one direction, and that’s downwards; overnight saw the USTs open at 112-23 (highest today) and continue to trundle lower to make a fresh trough of 112-15 in early European hours. Bunds are weaker today, albeit to a lesser extent than global peers; currently trading off by around 10 ticks in a 128.80 to 128.96. Gapped below 129.00 at the open, and continued to drip lower overnight and into the European open. However, the German paper then caught a slight bid just after the cash open, which took Bunds back a couple of ticks above opening levels, to make a current peak of 129.02. Really not much from a European perspective today, aside from a downbeat EZ Sentix print, which printed below the most pessimist of analyst expectations. Gilts are on the back foot, in-fitting global peers but to a lesser magnitude than their US counterparts. Newsflow ultimately solely focused on the looming UK budget at the end of this month; on that, Chancellor Reeves is reportedly set to increase the rate of dividend tax, according to The Telegraph. This follows on from reports via the same press which suggested that Reeves was looking to hike income tax by 2%, whilst simultaneously cutting NI by that same magnitude. Gilts have seemingly been getting accustomed to continued reports of tax-related newsflow, after Reeves provided a slight reprieve to markets are she failed to reiterate her tax-related pledges at a presser in recent weeks. Click for a detailed summary COMMODITIES Crude benchmarks have bid higher to start the week as it follows the positive sentiment seen stateside as the Senate passes the funding bill. WTI and Brent gradually moved c. USD 0.65/bbl higher throughout the APAC session to peak at USD 60.38/bbl and USD 64.24/bbl, respectively. As the European session got underway, benchmarks briefly extended on gains before sharply reversing lower to a trough of USD 60.01/bbl and 63.85/bbl despite a lack of drivers. On geopolitics, Russia launched over 400 drones and 45 missiles at Ukrainian energy infrastructure. Spot XAU has trended higher throughout APAC trade and into the European session despite the potential end of the US government shutdown, which should act as a headwind for haven assets. XAU drove higher straight from the open at USD 4k/oz and has broken above the highs of the 9-day range at USD 4050/oz. The yellow metal has peaked at USD 4085/oz and is currently trading at session highs. Base metals have advanced higher over hopes of the end of the US government shutdown. 3M LME Copper gapped higher to USD 10.75k/t and bid higher throughout the APAC session to a peak of USD 10.83k/t as the European session gets underway. Currently, the red metal is oscillating in a tight c. USD 30/t band. Iraq set the December Basrah medium crude Official Selling Price to Asia at minus USD 0.35/bbl vs Oman/Dubai average, while it set the OSP to Europe at minus USD 2.95/bbl vs Dated Brent and set OSP to North and South America at minus USD 1.35/bbl vs ASCI. White House said Hungary received an exemption from US sanctions for using Russian energy for a year. ExxonMobil CEO said they will “pace” spending on low-carbon projects due to disappointing customer demand and with government policies failing to provide the right incentives to create viable markets, according to FT. Industry group warned that EU climate rules risk energy security and that methane emission regulations due in 2027 will force cargoes to be diverted from Europe, according to FT. Shanghai Gold Exchange is to waive transaction fees for some gold contracts from November 11 to the end of 2026. Click for a detailed summary NOTABLE DATA RECAP EU Sentix Index (Nov) -7.4 vs. Exp. -4.0 (Prev. -5.4) Norwegian Core Inflation YY (Oct) 3.4% vs. Exp. 3.0% (Prev. 3.0%); MM (Oct) 0.6% vs. Exp. 0.2% (Prev. 0.2%) NOTABLE EUROPEAN HEADLINES ECB's de Guindos said the ECB firmly believes the level of rates are correct. UK faces an increase in young adults leaving the country owing to low salaries, rising tax burden and a lack of affordable housing, according to wealth managers cited by FT. UK Chancellor Reeves is reportedly set to increase the rate of dividend tax, according to The Telegraph. ECB’s Sleijpen cautioned against signing off too easily on joint European bonds and said they ultimately only lead to higher debt, according to Bloomberg. Fitch affirmed Ireland at AA; Outlook Stable and affirmed Latvia at A-; Outlook Stable. NOTABLE US HEADLINES US Senate voted 60 vs 40 to advance the government funding bill through the procedural hurdle, moving it closer towards passage, after 8 Democrats supported the measure in a rare Sunday session. US Treasury Secretary Bessent said the impact of the government shutdown on the economy is getting worse and worse, while he also stated that they are making substantial progress on inflation and expect prices to come down over the coming months. Bessent also commented that President Trump’s suggestion that Americans may receive a tariff “dividend” of at least USD 2,000 could come via the tax cuts passed in his signature economic policy bill earlier this year. White House Economic Adviser Hassett said US GDP could be negative in Q4 if the government shutdown drags on. US Supreme Court allowed the Trump administration to withhold billions in funding for food aid for now. It was separately reported that the Trump admin ordered US states to stop paying full food aid benefits to low-income American families and said that they are "unauthorised". Fed survey on Friday noted that policy uncertainty, including trade policy, central bank independence and availability of economic data, was the most frequently cited risk to US financial stability, while AI was added as a top stability concern, and respondents also cited geopolitical risks, inflation, monetary tightening, and higher long-term rates as top salient risks. Fed’s Williams (voter) said the gap between rich and poor risks a US downturn and suggested that poorer Americans’ mounting problems could be a factor in whether the central bank cuts rates in December, while he sees a balancing act for the December rate meeting, according to FT. US President Trump called for Senate Republicans to send government money given to health insurance companies and send it directly to the people. Boeing (BA) spokesperson said they recommended to the three operators of the MD-11 freighter that they suspend flight operations, while UPS (UPS) and FedEx (FDX) spokespersons said they made the decision to immediately ground their MD-11 fleets following the Louisville crash. NVIDIA (NVDA) CEO said they have very strong demand in Blackwell chips and asked TSMC (2330 TT) for more wafers to meet strong AI demand, while he stated that business is growing strongly and there will be a shortage of different things, as well as noted said Samsung (005930 KS), SK Hynix (000660 KS), and Micron (MU) have scaled up capacity. US appeals court said Trump administration must fully fund SNAP food aid benefits. GEOPOLITICS MIDDLE EAST Israel received the body of a deceased soldier from the Red Cross. Taliban spokesperson said the ceasefire that has been established has not been violated by them so far, and it will continue to be observed, while he added that Pakistan is not ready to take responsibility for maintaining internal security of their own country, so negotiations didn’t yield a result. Turkish President Erdogan said a high-level Turkish delegation will visit Pakistan within a week to discuss Afghanistan ceasefire talks, aiming to conclude the process. Syria carried out a nationwide pre-emptive operation targeting Islamic State cells. RUSSIA-UKRAINE Russia's Kremlin, on US President Trump's remarks about ending the war in Ukraine in the not-too-distant future, said Russia would also like to end the conflict as soon as possible. Russia remains open to resolving the conflict through diplomacy, but the situation is stuck. Foreign Minister Lavrov continues to do his job, ignoring fake news. Ukrainian President Zelensky said Russia launched 450 drones and 45 missiles to attack Ukraine’s energy sector and infrastructure. Ukrainian drone attack disrupted power and heating supply in Russia’s Voronezh. Russian Defence Ministry said Russian forces captured Rybne in Ukraine’s Zaporizhzhia region and Russian forces hit energy facilities supporting the operations of Ukraine’s defence industry, while it noted that Ukrainian attempts to unblock surrounded units in the Kupiansk and Pokrovsk areas were repelled. Russian Foreign Minister Lavrov said that he is ready to hold an in-person meeting with US Secretary of State Rubio and that regular contact with the US is important for discussing the Ukrainian issue, but noted that ending the conflict in Ukraine is impossible without eliminating its causes and taking Russian interests into account. Lavrov said work is being undertaken on Russian President Putin’s order to prepare proposals for potential Russian nuclear tests and that Russia is currently awaiting confirmation from the US that the anchorage agreements remain in force, while he stated that the US informed Russia via diplomatic channels that it is considering Putin’s proposal to adhere to the limits set out in nuclear arms control treaty after February 2026. OTHER North Korea’s Defence Minister said North Korea will show more offensive actions and that the US nuclear carrier escalates tension in the Korean peninsula, while he added that US Secretary of Defence Hegseth's visit to the DMZ shows a hostile nature. China’s mission to the EU said China lodged a representation with the EU on Taiwan’s Vice President entering the European Parliament. CRYPTO Positive risk sentiment has boosted the crypto complex, with Bitcoin back above USD 106k, and Ethereum pops above USD 3.6K. BoE proposes that 60% of assets backing stablecoins can be held in short-term UK Government debt securities, with at least 40% held at the bank. APAC TRADE APAC stocks traded higher amid the improving US-China trade environment and with hopes of ending the US government shutdown as several Democrats supported Republicans to pass a measure through the procedural vote in a rare Senate session on Sunday. ASX 200 gained with the upside led by the mining and tech sectors, while financials also showed resilience despite ANZ positing a decline in fiscal 2025 cash profit. Nikkei 225 rallied amid a weaker currency and as participants digested earnings, while it was also reported that Japan's GPIF posted a July-September quarterly investment return of JPY 14.45tln. Hang Seng and Shanghai Comp ultimately conformed to the upbeat mood amid the improving US-China trade environment, as both the US and China relaxed trade restrictions on each other, while there was also inflation data over the weekend which printed above forecasts, although factory gate prices remained in deflation. NOTABLE ASIA-PAC HEADLINES BoJ Summary of Opinions from the October 29th-30th meeting noted that one member said the BoJ is expected to keep raising interest rates if the economic and price forecasts materialise, while a member said it is important to check the initial momentum towards next year’s wage talks as firms firm up plans after US tariffs were set at 15%. It was stated that the key to future policy decisions is whether firms maintain positive wage-setting behaviour, while there was the opinion that uncertainty remains over the outlook, but Japan will see conditions align to adjust the policy rate depending on economic and price developments. Furthermore, a member said there is no need to rush, but interest rates must be raised without losing appropriate timing. BoJ's Nakagawa said the BoJ is expected to continue raising interest rates in accordance with improvements in the economy and prices, while she added the BoJ will make appropriate policy decisions, taking into account that uncertainty surrounding trade policies remains high. Japanese PM Takaichi said the government must restore market trust in Japan's finances, but boosting investment is also needed to strengthen economic growth, while she is not ruling out a sales tax cut as an option in the future, although the immediate priority is to compile a package of steps to cushion the blow from rising cost of living. China’s National Radio and Television Administration launched a campaign to address the spread of inappropriate animated videos. UK probes whether buses made in China can be turned off from far away after Norway found Yutong vehicles could be ‘stopped or rendered inoperable’ by the Chinese company, according to FT. Earthquake of magnitude 6.21 strikes east cost of Honshu in Japan. China issues measures on boosting private investment via Xinhua. China to also encourage private capital to invest in railway, nuclear power. Will clean up "unreasonable" access restriction for services sector. China will guide private capital to participate in low-altitude economy, commercial aerospace and other fields in an orderly manner. China to meet reasonable credit demand for private firms. DATA RECAP Chinese CPI MM (Oct) 0.2% vs. Exp. 0.0% (Prev. 0.1%) Chinese CPI YY (Oct) 0.2% vs Exp. 0.0% (Prev. -0.3%) Chinese PPI YY (Oct) -2.1% vs. Exp. -2.2% (Prev. -2.3%) Loading...
