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US House to vote on a bill which could end the shutdown and keep the government funded through January 2026. European bourses are broadly firmer and continue to make highs, US equity futures also gain with the RTY (+1%) outperforming. USD is firmer ahead of a slew of Fed speakers, GBP pressured on political uncertainty; JPY lags. Global bonds are softer given the risk tone, Gilts lag with PM Starmer pressured into PMQs. Crude benchmarks pull back after Tuesday’s gains, XAU remains rangebound. Looking ahead, highlights include BoC Minutes (Oct), EIA STEO, OPEC MOMR, Speakers including ECB’s de Guindos, Fed’s Paulson, Bostic, Williams, Waller, Miran, Collins; US Treasury Secretary Bessent. Supply from the US. 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 that they are going to lower some tariffs on coffee, according to a Fox News interview. Dutch Economy Minister Karremans said he spoke to EU Trade Commissioner Sefcovic about Nexperia and said they are both determined to ensure that supply chains are restored as quickly as possible, while they are committed to securing supply in the semiconductor space and are working closely with European and International partners. US and Saudi officials have held intense negotiations in recent weeks to finalise a number of agreements, including a defence pact, ahead of Saudi Crown Prince MBS meeting US President Trump in the US next week, via Axios citing sources. EUROPEAN TRADE EQUITIES European bourses (STOXX 600 +0.6%) have opened largely firmer, once again carrying on the positive momentum displayed over the last two days. The FTSE 100 underperforms with sentiment in the region hit amidst fears that PM Starmer's leadership is "vulnerable". European sectors are also primarily in the green. The biggest winners thus far today are Utilities (+1.1%), Banks (+1.1%) and Automobiles & Parts (+1.3%). The latter has been boosted by a broker upgrade for Ferrari (+2%). For the Tech sector, Infineon (+6.6%) soars after reporting strong Q3 metrics and providing solid AI-related commentary. US equity futures (ES +0.3%, NQ +0.6%, RTY +0.1%) are trading on a firmer footing. The NQ is firmer today as Tech returns back to a firmer footing, with sentiment boosted by Infineon and Foxconn results; the latter said it was "very optimistic" about AI-driven demand. Click for the sessions European pre-market equity newsflow Click for the additional news Click for a detailed summary FX DXY is flat/modestly firmer and trades in a very busy 99.44 to 99.61 range, with newsflow exceptionally quiet today. Focus in the prior session was ultimately on the dire weekly ADP prelim estimate, which led to some pressure in the USD. Docket today thins out from a data perspective, but a slew of Fed speakers will take the spotlight; Fed’s Paulson, Bostic, Williams, Barr, Waller, Miran, Collins and Treasury Secretary Bessent are all on the docket. Markets remain focused on government shutdown developments. To recap briefly, the US passed a funding bill to end the longest-ever shutdown in the prior day – this was then voted 8-4 by the House Rules Committee to advance it to the House Floor for consideration. Expectations are for the bill to be passed (albeit subject to dissent); overall, this will keep the US government funded till at least January 30th. EUR is essentially flat vs the USD. Failed to breach 1.16 to the upside in overnight trade, making a peak at 1.1588, to then fall back towards session lows of 1.1571. It is worth highlighting that the EUR is mildly stronger vs the broadly weaker GBP (which is suffering from political related pressure). European-specific newsflow has been exceptionally light today. Featuring an unrevised German inflation report, whilst Italian Industrial Output topped the most optimistic of analyst expectations. Docket should pick up later in the day, in the form of ECB speak via Schnabel (Hawk) and de Guindos (Dove) – no text release is expected from either. JPY is the worst-performing G10 currency today, given the generally positive risk environment with other haven assets generally sold (ex-gold). ING opines that one reason to keep the USD/JPY higher, is Japan’s agreement to invest directly in the US. This pressure in the JPY has led to continued jawboning from the Japanese officials; overnight, Finance Minister Katayama said she has seen “one-sided and sharp foreign exchange moves” recently, adding that it is being watched with a “high sense of urgency”. Whilst in the past similar jawboning has helped strengthen the JPY, the comments overnight were unable to boost the currency today. GBP is pressured vs the USD today, with regional political uncertainty on the forefront of traders minds. On that, in the prior session, The Guardian reported that Downing Street was fearing that some of the PM’s closest viewed PM Starmer as “vulnerable” to leadership change in the wake of the Budget. More recently, Wes Streeting has come out to clarify his support for Starmer, adding that he has not had talks with anyone, regarding any attempts to oust his leader. Antipodeans are mixed today, with the Aussie sitting towards the top of the G10 pile whilst the Kiwi is essentially flat. Nothing really driving the modest outperformance in the Aussie today, but it is worth highlighting some massive option expiries in the Aussie; 0.6495-0.6505 (2.4bln), 0.6525-30 (1.2bln), 0.6550-60 (906mln). PBoC set USD/CNY mid-point at 7.0833 vs exp. 7.1141 (Prev. 7.0866). Click for NY OpEx Details Click for a detailed summary FIXED INCOME USTs are pressured today, in-fitting with global bonds, as US paper scales back some of the ADP-related upside seen in the prior session and as risk sentiment today is boosted (equity futures firmer across the board). USTs currently trade at the bottom end of a 112-27 to 113-00+ range, and with price action relatively muted so far. Not really much on the data docket today, but a slew of Fed speakers will take the spotlight; Fed’s Paulson, Bostic, Williams, Barr, Waller, Miran, Collins and Treasury Secretary Bessent are all on the docket. Markets remain focused on government shutdown developments. To recap briefly, the US passed a funding bill to end the longest-ever shutdown in the prior day – this was then voted 8-4 by the House Rules Committee to advance it to the House Floor for consideration. Expectations are for the bill to be passed (albeit subject to dissent); overall, this will keep the US government funded till at least January 30th. Bunds lower at the start of the European day, opened at 129.19 with losses of a handful of ticks, briefly rebounded to a 129.24 peak with gains of a tick before getting dragged lower as the European risk tone continues to improve. Currently holding just off a 129.02 trough with downside of 21 ticks at most, if the move continues and the figure is breached then yesterday's 128.97 base comes into view. Bunds also potentially lower in sympathy with Gilts (see below) given the speculation around UK PM Starmer and associated price action as we get ever closer to the November Budget. For Germany, no move to Final CPI, which was unrevised, as expected. More recently, remarks from ECB's Kocher of note, as he said it would not be too surprising if the ECB holds rates steady in 2026, especially if inflation and growth projections play out as expected. A mixed Bund auction (2046 strong, but 2056 line garnered a 1.3x b/c), had little impact German paper at the time. This afternoon, the French National Assembly is to hold the first reading on the Social Security articles, with reference to the suspension of pension reform, set to occur around 14:00GMT. Politico writes that the articles should be adopted. Into this, OATS trade better than peers with the mood-music relatively constructive for PM Lecornu at this particular stage. Narrowing the OAT-Bund 10yr yield spread down to 74bps, the lowest since August. Gilts are underperforming vs peers, scaling back some of jobs-related upside seen in the prior session, which saw odds of a December BoE rate cut boosted. Moreover, political uncertainty in the region has crept back into the markets following a report in The Guardian. On that, in the prior session, The Guardian reported that Downing Street were fearing that some of the PM’s closest viewed PM Starmer as “vulnerable” to leadership change in the wake of the Budget. More recently, Wes Streeting has come out to clarify his support for Starmer, adding that he has not had talks with anyone, regarding any attempts to oust his leader. Obviously today's PMQs from around 12:00GMT onward will draw significant attention and both GBP and Gilt trades will watch for any signs of a drop in support for Starmer as we count down to the Budget; equally, a particularly strong performance could offset some of the pressure seen in Gilts this morning. Germany sells EUR 0.898bln vs exp. EUR 1.0bln 2.50% 2046 and EUR 1.14bln vs. exp. 1.5bln 2.90% 2056 Bund. Click for a detailed summary COMMODITIES Crude benchmarks grinded lower throughout the APAC session and have continued to move lower as the European session gets underway, despite the IEA releasing a report indicative of oil demand growth. After closing +1.6% in Tuesday’s session, WTI and Brent initially c. USD 0.50/bbl to a trough of USD 60.54/bbl and 64.71/bbl, respectively, as the market awaits reports from the EIA and OPEC. Most recently, Tass reported that Russia is prepared to continue talks with Ukraine in Istanbul. While there was no significant price action at the time, the complex has continued lower to USD 60.41/bbl and USD 64.30/bbl, respectively. Later today, the EIA and OPEC are expected to release their monthly oil reports. In its prior report, EIA raised its 2025 demand forecast and its view on global oil production, while OPEC maintained its 2025 and 2026 oil demand forecasts. Spot XAU continues to oscillate within Tuesday’s USD 4097-4149/oz band as the market awaits a flurry of Fed speakers that could hint of the direction of travel for rates. After peaking at USD 4145/oz, XAU fell lower as it was weighed on by a stronger dollar and the generally constructive risk tone. The yellow metal troughed just shy of Tuesday’s low before rebounding back higher and currently trading at USD 4125/oz. Base metals remain rangebound as the market waits for a fresh specific catalyst and having struggled to make any headway overnight amid an indecisive APAC session. Currently, 3M LME Copper is oscillating in a tight USD 10.79k-10.86k/t band despite the positive risk tone across Europe and stateside. ANZ sees gold prices peaking around USD 4,800/oz by mid-2026. IEA's World Energy Outlook report stated that LNG supplies are to grow 50% or by 300bln cubic meters by 2030, while IEA sees no demand peak for oil before 2050 under the current policies scenario. Click for a detailed summary NOTABLE DATA RECAP German HICP Final YY (Oct) 2.3% vs. Exp. 2.3% (Prev. 2.3%); MM (Oct) 0.3% vs. Exp. 0.3% (Prev. 0.3%) Italian Industrial Output YY WDA (Sep) 1.5% vs. Exp. -0.5% (Prev. -2.7%, Rev. -3.0%); MM SA (Sep) 2.8% vs. Exp. 1.5% (Prev. -2.4%, Rev. -2.7%) NOTABLE EUROPEAN HEADLINES UK Health Secretary Wes Streeting announces his support for UK PM Starmer Any talk of a challenge against PM Starmer is self-defeating and not true. Have not had talks with anyone about getting rid of Starmer. Adds that the PM is not fighting for his job. UK Chancellor Reeves is reportedly considering an increase in taxes on alcohol in line with elevated inflation, via CityAM citing sources. ECB's Kocher says that given recent data, a somewhat stronger growth outlook is not impossible. Would not be too surprising if ECB hold rates steady in 2026. If inflation and growth projections play out, rates may not change for a long time. NOTABLE US HEADLINES US Supreme Court extended the pause on a judge's order that required the Trump administration to fully fund food aid for 42mln Americans this month amid the federal government shutdown. White House is exploring rules that would upend shareholder voting with the Trump admin examining new measures to curb the influence of proxy advisers and index-fund managers, according to WSJ. GEOPOLITICS RUSSIA-UKRAINE Russian defence units destroyed a Ukrainian drone heading towards Moscow. Russia is reportedly ready to resume talks with Ukraine in Istanbul, via Tass. Russia's Kremlin says the reports of contact with London was true, adds that dialogue with the UK not continued as the UK showed no desire to listen to Russia's position. OTHER Australian PM Albanese said Indonesia and Australia have concluded negotiations on a new bilateral treaty on common security, and if either or both countries’ security is threatened, the treaty commits them to consult and consider what measures may be taken, individually or jointly, to deal with those threats. Furthermore, the treaty commits Australia and Indonesia to consult at a leader and ministerial level on a regular basis on matters of security, while it represents a major extension of existing security and defence cooperation. US President Trump has sent a letter to the State of Israel President Herzog requesting that Israel PM Netanyau is pardoned, describing the trial as "unjustified", via Jerusalem Post. CRYPTO Bitcoin is a little lower and slips below USD 105k whilst Ethereum underperforms and heads back below USD 3.5k. APAC TRADE APAC stocks traded mixed with the region indecisive amid light fresh catalysts and as participants digested earnings. ASX 200 was rangebound with upside limited as strength in the commodity-related sectors was offset by weakness in tech, telecoms, consumer discretionary and financials, while the latest Home Loans data from Australia firmly topped estimates. Nikkei 225 swung between gains and losses and traded on both sides of the 51,000 level in the absence of any key data and following a slew of earnings, including from SoftBank, which is pressured despite reporting a 191% rise in 6-month net, as it also announced a 4-for-1 stock split and that it offloaded its entire stake in NVIDIA. Hang Seng and Shanghai Comp were mixed despite the PBoC's Q3 monetary policy implementation report, in which it reiterated to implement an appropriately loose monetary policy and strengthen the transmission of policy, while an NDRC official recently noted private investment has slowed down this year, and there are challenges in private investment but also flagged a plan to support private investment to flow to high-value service sectors. NOTABLE ASIA-PAC HEADLINES Chinese President Xi said in a meeting with Spain's King that China is willing to work with Spain to build a comprehensive strategic partnership that is steadier, while he added that a relationship of trust has been forged between China and Spain. RBA Deputy Governor Hauser said their best guess is that monetary policy is still restrictive, and the committee is debating this, while he added that if it turns out they are no longer mildly restrictive, that has important implications for future policy. Hauser also stated that there are some ups and downs in consumption readings, with the central case being for a gradual, modest recovery and noted there are no levels of unemployment that will make the central bank happy. Japanese PM Takaichi says appropriate monetary policy is very important and they will be coordinating closely with the BoJ to attain economic growth. Two new members of Japan's top government economic panel are calling for larger economic stimulus Y/Y. DATA RECAP Australian Home Loans QQ (Q2) 9.6% vs Exp. 2.6% (Prev. 2.0%) Australian Owner-Occupied Loan Value QQ (Q2) 4.7% vs Exp. 2.5% (Prev. 2.4%) Australian Investor Housing Finance QQ (Q2) 17.6% vs Exp. 4.0% (Prev. 1.4%) South Korean Unemployment Rate (Oct) 2.6% (Prev. 2.5%) Loading...
