• European bourses have commenced the session on the front foot as broader sentiment remains constructive largely in a continuation of yesterday's recovery.
• Stateside performance is very in-fitting, ES +1.5%, ahead of Fed speak and after a constructive update from Foxconn.
• USD continues to pullback to the broad benefit of peers, DXY sub-111.00 at worst while Cable reclaims 1.14
• Core debt is bid across the board, though has since dipped from best levels, with Gilts back above 100.00 but still multiple points shy of pre-Kwarteng levels.
• Crude benchmarks are modestly bid this morning, taking the lead from broader sentiment and associated FX action awaiting OPEC+
• Looking ahead, highlights include US Factory Orders Speeches from Fed's Williams, Logan, Daly, Mester & Jefferson, ECB's Lagarde, UK Chancellor Kwarteng.

As of 11:10BST/06:10ET

LOOKING AHEAD

• US Factory Orders Speeches from Fed's Williams, Logan, Daly, Mester & Jefferson, ECB's Lagarde, UK Chancellor Kwarteng.
• Click here for the Week Ahead preview.

GEOPOLITICS

RUSSIA-UKRAINE

• Ukrainian President Zelensky said the Ukrainian army's advances continue and new population centres were liberated in several regions, according to Reuters.
• US defence official said the US has not yet seen a large-scale reinforcement by Russian forces into Ukraine, according to Reuters.
• IMF Executive Board is to consider Ukraine's request for USD 1.3bln in emergency funding under a new food shock window on October 7th, while IMF staff will meet with Ukrainian authorities in Vienna for technical discussions on economic plans, according to a source cited by Reuters.
• Russian Kremlin says President Putin is likely to sign laws incorporating the annexed regions today. Do not want to partake in the West's rhetoric re. nuclear weapons. From the beginning, wanted to solve the conflict via negotiations, via Reuters.

OTHER

• North Korea fired a missile which flew over Japan and landed in the Pacific Ocean outside of Japan’s exclusive economic zone, while the missile was the first North Korean missile launch to fly over Japan since 2017 and prompted Japan to issue a warning for residents to take shelter. Furthermore, North Korea's missile reportedly flew 4,500km to an altitude of 970km and at speed of Mach 17, according to Yonhap.
• South Korean President Yoon warned of a resolute response after North Korea's missile launch, while South Korea's National Security Council condemned North Korea's missile test which it said was a serious provocation and that North Korea's constant provocations cannot be tolerated and will bring consequences, according to Reuters.
• Japanese Defence Minister Hamada says North Korea's missile was likely at least an intermediate-range ballistic missile, while they decided not to deploy missile destruction action after determining there was no danger to Japan and they are continuing with the defence build-up without ruling out options including counter-attack capabilities. Furthermore, Japanese Chief Cabinet Secretary Matsuno said it is possible that North Korea takes further provocative acts including conducting a nuclear test, according to Reuters.
• US warned about Russia and China attempting to sway American voters ahead of the upcoming mid-term elections, according to Associated Press.
• US President Biden said he remains gravely concerned about reports of the intensifying violent crackdown on peaceful protestors in Iran and the US will be imposing further costs this week on perpetrators of violence against peaceful protestors, according to Reuters.

EUROPEAN TRADE

EQUITIES

• European bourses have commenced the session on the front foot as broader sentiment remains constructive largely in a continuation of yesterday's recovery.
• Sectors are all in the green with Travel names outperforming amid Heathrow ending the passenger cap while defensively-biased names lag a touch given broader sentiment.
• Stateside performance is very in-fitting, ES +1.5%, ahead of Fed speak and after a constructive update from Foxconn.
• Foxconn (2317 TW) September sales +40.4% YY; Q3 revenue better than expected. Maintain FY22 guidance, as stated in August; Q4 outlook is cautiously positive. Need to closely monitor inflation, demand, COVID and supply chains in the period. September: strong revenue performance in smart consumer electronics products was the main driver of overall revenue; smart consumer electronics, cloud and networking products delivered strong double-digit growth.
• Apple (AAPL) iPhone exports from India doubling, according to Bloomberg, in a boon to the plan of Indian PM Modi; additionally, exports of India-made iPhones surpass USD 1bln in a five-month period, via ET Now citing sources.
• Click here for more detail.

FX

• USD continues to pullback to the broad benefit of peers, DXY sub-111.00 at worst before Fed speak and some US data.
• Cable's revival remains intact and saw a fleeting move above 1.14 while EUR/USD derives similar upside and is seemingly unfased by EUR/GBP readacross.
• NZD initially benefited from AUD pressure following the RBA slowing the pace of tightening; however, this gave way to broader seemingly USD/risk-induced upside before the antipodeans slipped once more.
• Click here for more detail.
• Click here for OpEx for the NY Cut.

FIXED INCOME

• Core debt is bid across the board, though has since dipped from best levels, with Gilts back above 100.00 but still multiple points shy of pre-Kwarteng levels.
• Bunds and USTs have been directionally in-fitting though magnitudes a touch more contained with the US yield curve steepening.
• The morning's UK and German (I/L) issues passed without event, and we now look to the daily BoE Gilt op as a catalyst, particularly given yesterday's pronounced reaction.
• UK DMO Chief Stheeman says markets can digest 2022/23 Gilt issuance "reasonably smoothly", questions remain for pension and LDI regulation and expects bid-offer spreads to narrow for Gilts when the market is calmer.
• Click here for more detail.

COMMODITIES

• Crude benchmarks are modestly bid this morning, taking the lead from broader sentiment and associated FX action.
• Benchmarks are firmer by just shy of USD 1/bbl and towards the top-end of the sessions parameters and more broadly are well within the ranges of the last few days/weeks.
• Precious and base metals have benefited from the pullback in the USD. Lifting spot gold back above USD 1700/oz to a session best USD 10/oz above the figure and bringing the 50-DMA into focus at USD 1723/oz
• Saudi Aramco CEO says they maintain their market within Asia, despite demand from Europe; oil spare capacity is extremely low, market is focused on short-term economics, rather than long-term, via Reuters.
• Trafigura Chief Economist says sees dated Brent oil benchmark price above USD 75bbl at the end of next year, via Reuters.
• US Treasury Official Harris says Russian oil price cap will be high enough to maintain Russian incentive to continue producing; not yet been a decision on the price, via Reuters. December 5th sanctions will target Russian crude, then diesel and lastly lower value products such as Naphtha.
• Click here for more detail.

NOTABLE EUROPEAN HEADLINES

• UK PM Truss said abolishing the 45p top rate of tax was a tiny part of the plan and had become an unnecessary distraction, according to The Telegraph.
• German Finance Minister Lindner says they are open to joint steps on the international gas market, prepared to discuss measures to contain gas prices, EU power market needs to be reformed and joint purchases need to be considered.
• EU Economy and Single Market Commissioners have called for joint EU borrowing to deal with the energy crisis.

NOTABLE HEADLINES

• IMF MD Georgieva said a global recession can be avoided if fiscal policies are consistent with monetary policy tightening and that the responsibility is on the Fed to be mindful that the spillover impact on the rest of the world is "very high., according to Reuters.
• Click here for the US Early Morning Note.

CRYPTO

• Bitcoin is bid and briefly reclaimed the USD 20k handle, though has since dipped marginally back beneath the figure.

APAC TRADE

• APAC stocks notched firm gains as the region took impetus from the strong performance on Wall St where stocks rallied amid a decline in the dollar and yields, while equities were unfazed by North Korea's latest launch.
• ASX 200 gained at the open as the commodity-related sectors led the broad gains across the index after recent strength in oil and precious metals, while stocks were further boosted after the RBA opted for a smaller than expected rate increase of 25bps.
• Nikkei 225 advanced closer to the 27k level after the latest Tokyo CPI data printed in line with expectations.
• KOSPI strengthened despite North Korea's missile launch which flew over Japan for the first time since 2017 and prompted Japan to issue a warning for residents to take shelter, before landing outside of Japan’s EEZ.

NOTABLE APAC HEADLINES

• China is demanding that foreign diplomats provide floor plans of Hong Kong missions, according to FT.
• Taiwan is to open its border and lift quarantine rules in 10 days, according to the Ministry of Foreign Affairs.
• RBA hiked the Cash Rate Target by 25bps to 2.60% (exp. 50bps hike). RBA stated that the Board is committed to returning inflation to the 2–3% range over time and expects to increase interest rates further over the period ahead. RBA added that today’s increase in interest rates will help achieve this goal and that the Cash Rate had been increased substantially in a short period of time, while the size and timing of future interest rate increases will continue to be determined by the incoming data and the Board’s assessment of the outlook for inflation and the labour market.

NOTABLE APAC DATA

• Tokyo CPI YY (Sep) 2.8% vs Exp. 2.8% (Prev. 2.9%)
• Tokyo CPI Ex. Fresh Food YY (Sep) 2.8% vs Exp. 2.8% (Prev. 2.6%); Ex. Fresh Food & Energy YY (Sep) 1.7% vs Exp. 1.6% (Prev. 1.4%)
• Australian Building Approvals MM (Aug) 28.1% vs. Exp. 5.0% (Prev. -17.2%, Rev. -18.2%); Home Loans MM (Aug) -3.4% vs Exp. -3.0% (Prev. -8.5%)