US stocks gained albeit in a choppy fashion with sentiment helped by better-than-expected data and outperformance was seen in the small-cap Russell 2000, while the Nasdaq 100 also saw decent gains as tech led the advances across the sectors and was buoyed by NVIDIA investing USD 5bln in Intel – this provided tailwinds for most semi names, aside from AMD and TSMC, as it is seen as a threat to their competitiveness.
USD extended on post-Powell gains with upside facilitated by data including a drop in initial jobless claims and a strong Philly Fed survey.
Looking ahead, highlights include New Zealand Trade Data, Japanese National CPI, BoJ Policy Decision & Post-Meeting Press Conference.
More Newsquawk in 2 steps:
1. Subscribe to the free premarket movers reports
2. Trial Newsquawk’s premium real-time audio news squawk box for 7 days
LOOKING AHEAD
Highlights include New Zealand Trade Data, Japanese National CPI, BoJ Policy Decision & Post-Meeting Press Conference.
Click for the Newsquawk Week Ahead.
US TRADE
US stocks gained albeit in a choppy fashion with sentiment helped by better-than-expected data and outperformance was seen in the small-cap Russell 2000, while the Nasdaq 100 also saw decent gains as tech led the advances across the sectors and was buoyed by NVIDIA investing USD 5bln in Intel – this provided tailwinds for most semi names, aside from AMD and TSMC, as it is seen as a threat to their competitiveness.
SPX +0.48% at 6,632, NDX +0.95% at 24,455, DJI +0.27% at 46,142, RUT +2.51% at 2,468.
Click here for a detailed summary.
TARIFFS/TRADE
US President Trump and Chinese President Xi are to hold a call at 14:00BST/09:00EDT on Friday, according to Bloomberg citing an official.
US President Trump said TikTok will be owned solely by US investors, while he said they could do an extension with China and are close to a deal. Trump also commented a deal was made with the UK and that they want to make adjustments.
Chinese Commerce Ministry said it will review approval for technology and intellectual property transfers linked to TikTok.
China’s Foreign Ministry said they are willing to continue dialogue with the world and keep supply chains stable.
US House Select Committee on CCP sent a letter to US President Trump, urging action in response to China’s weaponisation of critical minerals supply chains. To counter these practices, the recommended reciprocal measures include restricting or suspending Chinese airline landing rights at US and allied airports until China restores fair and open export flows, reviewing and potentially tightening export controls on commercial aircraft, parts, and services to China, as well as coordinating with allies to restrict outbound investments into China’s aviation sector.”
NOTABLE HEADLINES
US President Trump reportedly seeks to speed large power projects to meet AI demand, with the administration seeking to speed the development of power plants, power lines and other energy projects that can help meet rising electricity demand from AI and manufacturing, according to Bloomberg.
US President Trump’s administration asked the US Supreme Court to allow President Trump’s firing of Federal Reserve Governor Lisa Cook.
Fed Governor Cook urged the US Supreme Court to reject US President Trump’s request to immediately allow him to remove her, according to a filing.
US House Republicans sent a letter to Fed Chair Powell requesting actions to curb financial fraud.
US House Speaker Johnson said he believes House Republicans have the votes to pass a clean CR on Friday, according to Punchbowl’s Sherman.
DATA RECAP
US Philly Fed Business Index (Sep) 23.2 vs. Exp. 2.5 (Prev. -0.3)
US Philly Fed Prices Paid (Sep) 46.8 (Prev. 66.8)
US Philly Fed New Orders (Sep) 12.4 (Prev. -1.9)
US Philly Fed Employment (Sep) 5.6 (Prev. 5.9)
US Philly Fed Capex Index (Sep) 12.5 (Prev. 38.4)
US Leading Index Change MM (Aug) -0.5% vs. Exp. -0.1% (Prev. -0.1%, Rev. 0.1%)
US Initial Jobless Claims w/e 231.0k vs. Exp. 240.0k (Prev. 263.0k, Rev. 264k)
US Continued Jobless Claims w/e 1.92M vs. Exp. 1.95M (Prev. 1.939M, Rev. 1.927M)
FX
USD extended on post-Powell gains with upside facilitated by data including a drop in initial jobless claims and a strong Philly Fed survey.
EUR failed to sustain an early rebound and retreated back to sub-1.1800 territory owing to the firmer buck.
GBP gave way to the stronger dollar, while there were no major fireworks after the BoE policy meeting where they kept the Bank Rate unchanged at 4.00% and decided to slow QT to GBP 70bln from GBP 100bln, as both expected and made through 7-2 votes.
JPY weakened which saw USD/JPY return to around the 148.00 level, while participants look ahead to Japanese CPI data and the BoJ policy decision.
South African Central Bank maintained its Repo Rate at 7.00%, as expected, with the decision split.
Norwegian Key Policy Rate 4.0% vs. Exp. 4.0% (Prev. 4.25%). Norges Bank stated the economic outlook is uncertain, but if the economy evolves broadly as currently projected, the policy rate will be reduced further in the course of the coming year. However, the Committee judged that a somewhat higher policy rate will likely be needed ahead compared with the outlook in June. Furthermore, Norges Bank Governor Bache said activity picked up more than expected, and the timing of the next move is not certain.
FIXED INCOME
T-notes were lower with treasuries sold across the curve on a drop in jobless claims and strong Philly Fed data.
COMMODITIES
Oil prices were lower with the energy complex weighed on by Trump comments and with the EU reportedly planning to phase out Russian LNG quicker than expected.
US President Trump said there is a lot of oil left in the North Sea and need oil prices to come down further. Trump separately commented that if the oil price drops, Russian President Putin will have no choice but to end the war, while he is disappointed by other countries buying Russian oil.
Qatar raised the November term price for Al-Shaheen oil to USD 3.61/bbl, according to Reuters citing sources.
GEOPOLITICAL
MIDDLE EAST
Israeli Army warned of a second wave of attacks on South Lebanon, according to Bloomberg.
Lebanese Army said Israeli aggressions and violations hinder its deployment in southern Lebanon and continued attacks and violations will hinder implementation of its plan, beginning from the southern Litani area, according to Sky News Arabia.
Gulf Cooperation Council (GCC) Secretary-General said an attack on any of the Gulf countries is an attack on all of them and Israeli aggression against Qatar is a violation of its sovereignty, according to Sky News Arabia.
German Chancellor Merz said they will have an answer to the Israel sanctions debate within the EU over the next week, and will reach a decision before the Copenhagen summit. Merz said he shares Spain’s criticism of Israel’s conduct, but does not share their belief that it constitutes genocide, while he shares the assessment that Israel’s actions in Gaza are not proportional to their stated goals.
French President Macron told Israel’s Channel 12 that the return of UN sanctions on Iran will happen, while WSJ’s Norman posted that Macron thinks a snapback is a done deal, because the latest news they had from the Iranians is not serious.
WSJ’s Norman said he was hearing that Iran might withdraw the resolution they crafted with Russia condemning attacks on its nuclear sites, and that it was headed for defeat at the IAEA general conference.
US President Trump said the US is attempting to regain control of Bagram airbase in Afghanistan.
RUSSIA-UKRAINE
US President Trump said he will be harsh if he has to ask Russian President Putin for a ceasefire, but it doesn’t feel like the time to do so. Trump also commented that drones in Poland should not have been that close, and he was unhappy with NATO when he saw they were buying oil from Russia. It was also reported that US President Trump and UK PM Starmer discussed increasing defence support for Ukraine, while President Trump said Russian President Putin has let him down.
EU plans to phase out Russian LNG more quickly after Trump push, according to Bloomberg. It was separately reported that a European official confirmed that the European Commission is discussing a proposal to accelerate a ban on Russian LNG in the 19th package of sanctions against Russia.
EU is reportedly to propose new Russian sanctions as soon as this week, according to Bloomberg sources.
ASIA-PAC
NOTABLE HEADLINES
BoJ is likely to maintain a hiking stance regardless of the next Japanese PM, due to sticky inflation making a pause difficult, according to WSJ citing sources.
EU/UK
NOTABLE HEADLINES
BoE kept the Bank Rate unchanged at 4.00% (exp. 4.00%) in a 7-2 vote (exp. 7-2; prev. 5-4 to cut rates) in which Dhingra and Taylor voted to cut rates by 25bps, while it voted 7-2 to slow the QT pace to GBP 70bln (exp. 70bln; prev. GBP 100bln) and 2025/26 gilt sales will be split 40:40:20 between short-, medium- and long-maturity buckets in initial proceed terms (2024/25 had equal split). BoE statement maintained the phrase “a gradual and careful approach to the further withdrawal of monetary policy restraint remains appropriate” and maintained language that monetary policy is not on a pre-set path. BoE Governor Bailey said we’re not out of the woods yet, so any future rate cuts will need to be made gradually and carefully, while he stated the new QT target means the MPC can continue to reduce the size of the balance sheet while continuing to minimise the impact on the gilt market.
BoE Governor Bailey said the timing and scale of additional rate cuts are uncertain, while he continues to think there will be more rate cuts with the timing and scale more uncertain than pre-August. Bailey said regarding QT, that he does not think there’s a stress in the market, and that slowing the QT pace is a sensible and pragmatic reaction to markets.
ECB’s de Guindos said need to pay a lot of attention to NEER rather than just EUR/USD, while he added that risk of undershooting for the ECB is “not big” or “especially relevant” and that risks to inflation are balanced and two-sided.
German government is to raise additional EUR 10.5bln via capital market in Q4, while it was later reported that the German Parliament approved the budget for 2025 with record investments.
Loading…