• APAC stocks eventually traded mostly higher following a firm lead from Wall Street; Chinese stocks experienced a choppy session
• DXY traded under 112.00, USD/JPY was relatively stable, CNH weakened on the PBoC fixing
• South Korean President Yoon said North Korea has completed preparations for a seventh nuclear test
• Sky News sources suggest Jeremy Hunt is to remain UK Chancellor, while Penny Mordaunt wants the Foreign Secretary job
• European equity futures held a flat bias overnight, with the Euro Stoxx 50 future +0.1% after cash markets closed +1.5%
• Looking ahead, highlights include German Ifo Survey, Australian Federal Budget, US Richmond Fed, BoE's Pill, Supply from UK, Germany, the US. Earnings from Alphabet, Google, Microsoft, Centene, General Motors, UPS, ADM, General Electric, Raytheon, Coca-Cola, 3M, Visa, and more.

US TRADE

• US stocks were bid across the board although small caps underperformed somewhat ahead of a plethora of earnings this week in the busiest week of the Q3 season, with mega-caps Apple, Amazon, Alphabet, Meta and Microsoft among those set to report.
• SPX + 1.19% at 3,797, NDX +1.06% at 11,430, DJIA +1.34% at 31,500, RUT +0.35% at 1,748.
• Click here for a detailed summary.

NOTABLE HEADLINES

• US Treasury Secretary Yellen said the 20-year bond is less liquid and no decisions made on it; a number of other nations conduct bond buybacks.
• Apple (AAPL) is raising the price of Apple Music, Apple TV+ and Apple One.
• White House said it's not true there is a national security review of Elon Musk.
• UK FCA is launching an inquiry this week into moves by Apple (AAPL), Google (GOOG), Amazon (AMZN) and Meta (META) into retail financial services, FT reported; no regulatory changes are being proposed at this stage.

APAC TRADE

EQUITIES

• APAC stocks eventually traded higher following a firm lead from Wall Street, with the Chinese market experiencing a choppy session overnight.
• ASX 200 held onto gains as the clock ticks down for the unveiling of the Australian Federal Budget (at around 09:30BST/04:30ET), with gains in the index led by financials, telecoms and healthcare.
• Nikkei 225 remained above the 27,000 mark as its manufacturing stocks kept the index buoyed.
• KOSPI was supported by the chip sector but gains were capped as South Korean President Yoon said North Korea has completed preparations for a seventh nuclear test, whilst South Korean consumer inflation expectations also ticked up from the prior month.
• Hang Seng and Shanghai Comp were volatile throughout the session and both indices swung between gains and losses with the former dipping under the 15,000 mark at one point - desks pointed to continued angst following the CCP National Congress. The indices later surged whilst there were unconfirmed reports of Chinese intervention in the stock market.
• US equity futures were uneventful with price action caged throughout most of the session - the ES (Unch.) briefly fell under 3,800 at one point.
• European equity futures also held a flat bias overnight, with the Euro Stoxx 50 future +0.1% after cash markets closed +1.5%.
• Click here for a detailed summary.

FX

• DXY traded under 112.00 after printing a peak at 112.54 yesterday – in between its 10 DMA (112.58) and 21 DMA (112.49) - with contained/quiet price action in APAC hours.
• USD/JPY was relatively stable but saw a knee-jerk lower after Japan maintained its overall economic view unchanged that the economy is picking up moderately and said that "full attention" must be paid to market volatility - with USD/JPY moving from around 148.85 to 148.45 in two minutes before stabilising in a move that coincided with the release.
• GBP/USD was the outperformer and the pair traded above 1.1300 throughout most of the session.
• EUR/USD saw modest gains ahead of the 0.9900 mark after failing to mount the level yesterday.
• Antipodeans were also firmer with AUD/USD back above 0.6300 ahead of the Australian budget, while NZD/USD benefitted from AUD/NZD dipping back under 1.1100.
• CNH came under sudden pressure after the PBoC opted for the weakest Yuan fix since 2008, with USD/CNH moving from 7.3150 to 7.3625 in the two minutes after the fix.
• PBoC set USD/CNY mid-point at 7.1668 vs exp. 7.1348 (prev. 7.1230); weakest since 2008
• Click here for a detailed summary.

FIXED INCOME

• 10yr UST futures were uneventful in APAC trade after the curve steepened further during US hours yesterday.
• Bund futures posted mild gains but the December contract remained well within yesterday's range.
• 10yr JGB futures were flat in early hours with little action seen throughout the session as the yield traded on either side of the BoJ’s 0.25% level, although the 20yr JGB yield rose to 1.275% - the highest since July 2015, whilst the 30yr yield rose to 1.685% - the highest since September 2014.
• Click here for a detailed summary.

COMMODITIES

• Crude moved sideways overnight after both contracts settled lower yesterday, with some mild downticks seen across the complex ahead of the Chinese cash open in a move that was seemingly sentiment-driven at the time.
• IEA's Birol said the OPEC+ decision to cut output by 2mln BPD is a risky one especially as several economies are on the brink of recession; the Global LNG market to tighten further next year as European imports increase and China's appetite may rebound, via Reuters.
• The European Commission is to discuss a proposal today for a permanent fix to decouple gas from electricity prices, according to Politico.
• Spot gold oscillated on either side of USD 1,650/oz with the yellow metal’s 10 DMA around 1,649.30/oz.
• CME copper was modestly softer amid the cautious mood across the markets and following China’s equity selloff yesterday and volatile price action today.
• Click here for a detailed summary.

CRYPTO

• Crypto markets were uneventful overnight with Bitcoin still above USD 19,000 and Ethereum north of USD 1,300.

NOTABLE HEADLINES

• US Treasury Secretary Yellen is unaware of Japan's FX intervention and Tokyo hasn't informed them.
• US officials are said to have started talks with Chinese chip equipment maker Naura Technology Group over new export restrictions, according to SCMP sources.
• PBoC relaxed cross-border funding by raising the macroprudential parameter to 1.25 from 1.
• PBoC injected CNY 230bln via 7-day reverse repos at a maintained rate of 2.00% for a daily injection of CNY 228bln
• China State Planner said China is to promote the expansion of foreign investments focusing on the manufacturing industry.
• Japan kept its overall economic view unchanged that the economy is picking up moderately, and added that "full attention" must be paid to market volatility. Govt raised Capex view for the first time in eight months; downgrades view on imports.
• Japanese Finance Minister Suzuki does not comment on daily forex moves, ready to take appropriate action on FX movements if necessary; watching FX with a high sense of urgency. Suzuki said they are in constant communication with US authorities and he is aware of US Treasury Secretary Yellen's comments that she did not know about Japan's intervention.
• Japanese government official citing BoJ Governor Kuroda said sharp one-sided JPY weakening is not desirable for the economy; BoJ will work closely with govt to monitor financial and currency market moves and their impact on Japan's economy and prices
• Japanese PM Kishida is to appoint former Health Minister Goto as the new economy minister to replace Yamagiwa, via NHK
• South Korean Oct 12-month consumer median inflation expectation 4.3% (prev. 4.2% in Sep), according to the BoK.
• RBNZ Chief Economist said the RBNZ anticipates that inflationary pressures will ease and notes that falling house prices are expected to slow consumption.

GEOPOLITICS

RUSSIA-UKRAINE

• US State Department said there would be consequences for Russia if uses a dirty bomb or nuclear bomb, according to Reuters.
• US military official sees no indications Russians have made a decision to employ nuclear weapons.
• Russia will regard the use of a "dirty bomb" by Kyiv as an act of nuclear terrorism; Russia said it has not intended nor intends to use nuclear weapons in Ukraine, according to a letter cited by Reuters.

OTHER

• US DoJ said four Chinese nationals, including three intelligence officials, have been charged in a spy recruitment campaign, according to Reuters.
• US President Biden Administration is to warn of election infrastructure threats, according to Politico.
• South Korean President Yoon said North Korea has completed preparations for a seventh nuclear test, via Yonhap.

NOTABLE EU/UK HEADLINES

• BoE's Ramsden said PMI data is consistent with the UK economy being in a recession; have to take account of the fall in the value of the Pound, which has been relatively stable as of yet. A temporary expanded collateral repo facility will hopefully have a role but has not been called on yet. He was reluctant to go down the bond purchase route. The energy markets financing scheme is at the limit of what I would want to be doing as a Central Banker. He said will have to see if the energy markets financing scheme gets used.
• Sky News sources suggest Jeremy Hunt is to remain UK Chancellor, while Penny Mordaunt wants the Foreign Secretary job.
• EU has warned that a price cap on natural gas will need the involvement of the UK and Switzerland for it to be effective, according to Bloomberg citing sources.