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US stocks declined in a risk-off day amid AI concerns and soft labour market proxies. On AI, NVIDIA (NVDA) CEO Huang warned that China could win the AI race vs the US, while the OpenAI CFO spoke on a government backstop for its USD 1tln expansion; however, this was later walked back. CEO Altman also later clarified that they do not have or want government guarantees for OpenAI data centres. On the labour market proxies, Challenger layoffs surged to a 7-month high, while RevelioLabs' estimate of nonfarm payroll declined by 9k in October, and the Chicago Fed estimate of the unemployment rate also ticked up slightly. USD was pressured following a trifecta of weak labour market data in which Challenger layoffs surged to 153.07k in Oct. from 54.064k, to a seven-month high, while RevelioLabs Total US Nonfarm Employment fell 9.1k M/M (prev. +60.1k M/M), and US Chicago Fed Estimates Unemployment Rate ticked higher. Looking ahead, highlights include Japanese Household Spending, Philippines GDP, Chinese Trade Data, Supply from Australia. 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 Japanese Household Spending, Philippines GDP, Chinese Trade Data, Supply from Australia. Click for the Newsquawk Week Ahead. US TRADE US stocks declined in a risk-off day amid AI concerns and soft labour market proxies. On AI, NVIDIA (NVDA) CEO Huang warned that China could win the AI race vs the US, while the OpenAI CFO spoke on a government backstop for its USD 1tln expansion; however, this was later walked back. CEO Altman also later clarified that they do not have or want government guarantees for OpenAI data centres. On the labour market proxies, Challenger layoffs surged to a 7-month high, while RevelioLabs' estimate of nonfarm payroll declined by 9k in October. The Chicago Fed estimate of the unemployment rate also ticked up slightly. SPX -1.12% at 6,720, NDX -1.91% at 25,130, DJI -0.84% at 46,914, RUT -1.88% at 2,417. Click here for a detailed summary. TARIFFS/TRADE US President Trump said they will need a game plan if the Supreme Court case on tariffs does not go well, and can do other things, but they are slow in comparison, while he added there are no new tariff announcements coming while the SCOTUS case is pending. US President Trump said talks with India are going well, while he added they will figure out a trip to India and that he will be going. US announced a temporary suspension of China's reciprocal tariffs in regular order, and cut China fentanyl tariffs to 10%. Discrepancies have emerged over the details of China's agreement with the US to pause rare-earth export restrictions, as Washington said past controls will also be eliminated, a condition that has not been announced by Beijing, according to Nikkei. Chinese Commerce Ministry said regarding an EU-China FTA that it is willing to explore the possibility of various trade and investment agreements. Mofcom also noted regarding semiconductor flows that China is committed to the stability and security of the global chip industry and will approve relevant export license applications of qualified Chinese exporters. EU spokesperson said Shein is engaging with the EU following France's ban. USTR moved the meeting to discuss USMCA to December 3rd-5th, according to the Federal Register. NOTABLE HEADLINES Fed's Barr (voter) said progress has been made on inflation, but there is still more work to do, while he noted a two-speed economy with wealthier households thriving and said the Fed has to pay attention to ensuring the job market is solid. Fed Governor Miran expects the Fed will cut in December and reiterated that he wants to get to neutral in 50bps moves, but a lot of his colleagues want 25bps. Miran added that they do not need 75bps cuts and do not need to make up for lost ground on cuts, while he also stated that the labour market deterioration is gradual and not accelerating. Fed's Williams (voter) said the natural rate of interest is hard to pin down and that model-based US neutral rate estimates around 1%. Fed's Goolsbee (2025 voter) said most labour market indicators show stability in the market and should be careful taking the payroll job number drop as an indicator of the job market, while he added that the unemployment rate is basically unchanged. Goolbee said he may be reluctant to continue the rate-cutting cycle, as well as noted there is very little private sector information about inflation, and it will be some time before they see any problems, which makes him more uneasy about front-loading rate cuts. Furthermore, he said he is not hawkish on rates and noted that the settling point for rates will be a fair bit below where it is today, as well as noted that when things are "foggy", it leads more towards caution and it is best to slow down. Fed's Hammack (2026 voter, hawk) said it is 'not obvious' that the Fed should cut interest rates again given inflation, while she added that Fed policy should stay modestly restrictive to lower inflation and that monetary policy is 'only barely restrictive, if at all'. Hammack said the Fed is seeing pressure on both sides of its employment and inflation mandates, while she expects elevated inflation through 2026. She also noted it will take a couple of years to get back to 2% inflation target and that the Fed's bigger miss is on the inflation side relative to the jobs mandate. Furthermore, she said inflation overshoot goes beyond tariff pressure and she is 'a little but nervous' about current policy given inflation, as well as stated that she would not want to cut rates into accommodative territory. US President Trump posted on Truth that "The Democrats will terminate the Filibuster in THE FIRST HOUR, if and when they assume “control” or power. Republicans have what the Democrats want — We should do it, NOW, and have the greatest three years in History!" US President Trump said he will give out the air traffic control contract over the next six weeks and that there are no concerns over air travel safety. US House Speaker Johnson said he is less optimistic about the shutdown ending. US judge ordered the Trump admin to fully fund SNAP food aid benefits by Friday. White House AI and crypto czar Sacks said “There will be no federal bailout for AI. The U.S. has at least 5 major frontier model companies. If one fails, others will take its place. DATA RECAP US Chicago Fed Estimates Unemployment Rate 4.36% (prev. 4.35% M/M); Hiring Rate for Unemployed Workers 44.81% (prev. 45.13% M/M); Layoffs and Other Separations Rate 2.10% (prev. 2.09%). Challenger October US Job Cuts jumped 175.3% to a 7-month high at 153.074k (prev. 54.064k in September) RevelioLabs Total US Nonfarm Employment Data (Oct. 2025): -9.1k M/M (prev. +60.1k) FX USD was pressured following a trifecta of weak labour market data in which Challenger layoffs surged to 153.07k in Oct. from 54.064k, to a seven-month high, while RevelioLabs Total US Nonfarm Employment fell 9.1k M/M (prev. +60.1k M/M), and US Chicago Fed Estimates Unemployment Rate ticked higher. There were also concerns around US AI after NVIDIA CEO Huang said China is going to win the race, while the OpenAI CFO asked about a government backstop, albeit this was later walked back. EUR benefitted from the dollar's demise and gained a firmer footing at the 1.1500 handle, while there were some comments from ECB officials, including de Guindos who noted slight optimism on growth and that inflation news is positive. GBP was among the outperformers owing to the weaker buck, and despite the brief pressure seen in the wake of the BoE meeting where the MPC held rates at 4.00% in a 5-4 vote (exp. 6-3, prev. 7-2), with Breeden, Ramsden, Dhingra, and Taylor dissenting in favour of a cut. BoE also tweaked its guidance to put more focus on inflation progress, while the accompanying MPR maintained 1-yr and 2-yr ahead CPI forecasts, but lowered its Q4 25 inflation forecast. Furthermore, Governor Bailey reiterated that the UK remained on a gradual downward path for rates, as well as commented that “with every cut in the Bank Rate, it becomes a closer decision on how much further rates need to fall”. JPY strengthened amid a haven bid and softer US yields which pressured USD/JPY briefly beneath the 153.00 level. Banxico cut rates by 25bps to 7.25%, which was in line with expectations, while the decision was made by a 4-1 vote split as Heath voted to keep rates at 7.50%. Banxico stated that the Governing Board deemed it appropriate to continue the rate-cutting cycle. Looking ahead, the Board will evaluate reducing the reference rate (prev. Looking ahead, the Board will assess further adjustments to the reference rate). Norges Bank kept rates unchanged at 4.00%, as expected, while Governor Bache said the job of overcoming inflation is not complete, and they are in no hurry to lower interest rates. Furthermore, it was stated that there is uncertainty about the outlook, but if the economy develops roughly as the Committee now envisages, the interest rate will be further reduced over the next year. Czech CNB Repo Rate 3.5% vs. Exp. 3.5% (Prev. 3.5%) FIXED INCOME T-notes rallied amid weak labour market proxies and risk-off trade. COMMODITIES Oil prices swung between gains and losses, and settled in the red with pressure seen amid risk-off trade, which was triggered by dismal US labour market data. Russian oil exports from western ports are to decline in November, according to Reuters citing sources. Russia's Volgograd oil refinery halted operations following Ukrainian drone attack, according to three industry sources via Reuters. US added uranium, copper and silver to a government list of critical minerals, while the list also includes metallurgical coal, potash, rhenium, silicon and lead, according to a US government site. GEOPOLITICAL MIDDLE EAST Israeli military began raids on Hezbollah sites in southern Lebanon. US reportedly prepares to establish military presence at airbase in Damascus, Syria, according to Reuters citing sources. US Special Envoy Witkoff said they will announce another country entering the Abraham Accords on Thursday night, while a senior US official later confirmed that Kazakhstan is to join the Abraham Accords. OTHER US President Trump’s admin currently has no plans to strike Venezuela and reportedly does not have legal justification, according to CNN citing lawmakers. Drones have been observed in the Swedish city of Gothenburg’s airport and traffic was halted, according to local press. ASIA-PAC NOTABLE HEADLINES Chinese Vice Premier Ding Xuexiang said China needs to abide by the principle of common but differentiated responsibilities, while he added that developed countries should take the lead in reducing emissions and providing finance. Furthermore, he said that they need to remove trade barriers holding back the green transition. EU/UK NOTABLE HEADLINES BoE held rates at 4.00% in a 5-4 vote (exp. 6-3, prev. 7-2), as Breeden, Ramsden, Dhingra and Taylor voted to cut. BoE Governor Bailey (post-meeting statement) said they see a gradual downward path for rates and noted that with every cut in the Bank Rate, it becomes a closer decision on how much further rates need to fall. Furthermore, Bailey responded that the market curve gives a reasonable view of the sensible path for rates when asked if he sees 3.5% as the terminal Bank Rate, while he reiterated that they have only seen one inflation print below target, which was welcome, but the MPC needs to see more than one number. UK Chancellor Reeves has told the Budget watchdog that she plans to increase income tax as she seeks to repair the public finances, according to The Times. Reeves is considering a 2p rise in income tax and a 2p cut in national insurance in an attempt to shift the burden of tax rises away from workers and on to other groups such as pensioners and landlords, while she is considering limiting the national insurance cut to earnings below GBP 50,270, reducing the rate from 8% to 6%. Furthermore, earnings over GBP 50,270 would still be subject to a 2% rate to ensure that those with the “broadest shoulders” bear the biggest burden. UK Chancellor Reeves considers a less dramatic cut to the UK's annual cash ISA allowance, while the government is also encouraging ISA providers to revamp their stocks-and-shares savings products, according to FT. ECB's de Guindos noted slight optimism on growth and that inflation news is positive. De Guindos also said he is more optimistic on services inflation and that the evolution of wages are fully aligned with projections, but added the level of uncertainty is huge and he is comfortable with the current level of rates. ECB's Schnabel said quantitative normalisation is proceeding smoothly, with strong liquidity positions of banks and abundant excess liquidity. Furthermore, she said regarding the new structural portfolio, that factors suggest tilting the structure towards shorter-dated assets. DATA RECAP UK S&P Global Construction PMI (Oct) 44.1 vs. Exp. 46.7 (Prev. 46.2) Italian HCOB Construction PMI (Oct) 50.7 (Prev. 49.8) French HCOB Construction PMI (Oct) 39.8 (Prev. 42.9) German HCOB Construction PMI (Oct) 42.8 (Prev. 46.2) German Industrial Output MM (Sep) 1.3% vs. Exp. 3.0% (Prev. -4.3%) EU HCOB Construction PMI (Oct) 44.0 (Prev. 46) EU Retail Sales MM (Sep) -0.1% vs. Exp. 0.2% (Prev. 0.1%, Rev. -0.1%) EU Retail Sales YY (Sep) 1.0% vs. Exp. 1.0% (Prev. 1.0%, Rev. 1.6%) Loading...
