• APAC stocks were mostly positive following the gains across global counterparts, although the upside was capped amid threats from Iran.
• Iran's Foreign Minister said pre-emptive actions by the resistance front could be expected in the coming hours (comments made last night).
• US President Biden will travel to Israel on Wednesday and will reaffirm US solidarity with Israel.
• European equity futures are indicative of a contained open with the Euro Stoxx 50 future -0.1% after the cash market closed up 0.3% yesterday.
• DXY is contained on a 106 handle, EUR/USD and USD/JPY oscillate around 1.0550 and 149.50 respectively, AUD leads, NZD lags.
• Looking ahead, highlights include UK Wages, German ZEW, US Retail Sales, Industrial Production, Business Inventories, Fed's Williams, Bowman, Barkin, Kashkari & ECB's de Guindos, Fed Discount Rate Minutes, Supply from UK & Germany.
• Earnings from Ericsson, JNJ, Prologis, Goldman Sachs, Bank of America & Lockheed Martin.

US TRADE

EQUITIES

• US stocks rallied and yields climbed amid a recovery in risk appetite as weekend geopolitical hedges were unwound despite not much change fundamentally and as risks of a wider conflict in the Middle East linger.
• SPX +1.06% at 4,374, NDX +1.18% at 15,173, DJI +0.93% at 33,985, RUT +1.59% at 1,747.
• Click here for a detailed summary.

NOTABLE US HEADLINES

• Fed's Harker (voter) said the Fed should not be considering more rate increases, while he is seeing signs of a better-balanced labour market and easier wage pressures.
• CNN's Manu reported that Jim Jordan said he would go to the floor and force a vote at noon on Tuesday even if he doesn’t have 217 votes initially, while he had previously said he would go to the floor once he had 217 votes locked down.

APAC TRADE

EQUITIES

• APAC stocks were mostly positive following the gains across global counterparts which unwound the recent geopolitical hedging and with President Biden to travel to the Middle East on Wednesday, although the upside was capped as risks of a widening conflict in the Middle East conflict lingered amid threats from Iran.
• ASX 200 was led by outperformance in tech and telecoms, while mining names also benefitted following Rio Tinto’s quarterly update which showed an increase in iron ore shipments despite a decline in output.
• Nikkei 225 was boosted at the open and briefly climbed above 32,000 although has since pulled back from intraday highs and proceeded to oscillate around the key aforementioned level.
• Hang Seng and Shanghai Comp. were both positive although the mainland lagged amid developer debt concerns with Country Garden on the cusp of a default as the grace period for a USD 15mln coupon payment expires today and with an Evergrande unit to seek creditor approval to extend yuan-denominated bonds.
• US equity futures lacked firm direction and took a breather after Monday's rebound.
• European equity futures are indicative of a contained open with the Euro Stoxx 50 future -0.1% after the cash market closed up 0.3% yesterday.

FX

• DXY was rangebound on a 106 handle as participants await US Industrial Production and Retail Sales data due today ahead of the key Fed speeches.
• EUR/USD eased back from yesterday's peak but with the reversal minimal after hawkish ECB comments.
• GBP/USD just about gave back the 1.2200 status as attention turns to UK wage data.
• USD/JPY was indecisive amid a lack of fresh drivers and remained stuck around the 149.50 focal point.
• Antipodeans were mixed with AUD/USD marginally boosted post-RBA minutes which included some hawkish rhetoric on inflation, while NZD/USD was contained after CPI data printed softer than expected.
• PBoC set USD/CNY mid-point at 7.1796 vs exp. 7.3038 (prev. 7.1798).

FIXED INCOME

• 10yr UST futures marginally extended on the prior day’s losses as yields continued to slightly edge higher amid the improved risk appetite and heading into this week’s busy schedule of Fed speakers.
• Bund futures remained pressured after recent selling and hawkish comments from ECB’s Lane.
• 10yr JGB futures were subdued in tandem with global peers and after weaker demand at the 20yr auction.

COMMODITIES

• Crude futures were subdued after the prior day's choppy performance amid ongoing geopolitical risks and against the backdrop of touted unwinding of US sanctions on Venezuela.
• Chevron (CVX) Australia spokesperson said they are continuing work to conclude the drafting of proposed enterprise agreements for Gorgon and Wheatstone facilities based on clarification provided by the Fair Work Commission, according to Reuters.
• US State Department said it welcomes the announcement by Maduro representatives and the unitary platform to resume negotiations, while it added the US will continue efforts to unite the international community to support the Venezuelan-led negotiation process.
• Spot gold was rangebound alongside an uneventful greenback ahead of data and Fed speakers.
• Copper futures were initially contained before seeing selling pressure ahead of the European open.

CRYPTO

• Bitcoin was subdued after reversing the surge from the fake spot Bitcoin ETF approval report.
• Binance said it will stop accepting new UK users from 17:00BST on 16th October 2023.
• Israel ordered a freeze on some crypto accounts in a bid to block funding for Hamas with about 100 accounts on Binance closed after appeals for donations appeared on social media, according to FT

NOTABLE ASIA-PAC HEADLINES

• RBA Minutes from the October meeting stated the board considered raising rates by 25bps or holding steady and agreed the case for holding steady was the stronger one, while members noted data on inflation, jobs and updated forecasts would be available at the November meeting. RBA Minutes stated members acknowledged upside risks to inflation were a significant concern and said progress in lowering service sector inflation was slow, while the Board had a low tolerance for a slower return of inflation to the target and it stated that further tightening may be required if inflation is more persistent than expected.

DATA RECAP

• New Zealand CPI QQ (Q3) 1.8% vs. Exp. 2.0% (Prev. 1.1%)
• New Zealand CPI YY (Q3) 5.6% vs. Exp. 5.9% (Prev. 6.0%)
• RBNZ Sectoral Factor Model Inflation Index (Q3) 5.2% (Prev. 5.8%)

GEOPOLITICAL

• Israeli PM Netanyahu spoke With Russian President Putin and made it clear that Israel will not stop the Gaza operations until Hamas is destroyed, according to Reuters. It was separately reported that Russian President Putin told Israeli PM Netanyahu that Russia is ready to help end the confrontation in the region and resolve it peacefully, according to TASS
• Iran's Foreign Minister said pre-emptive actions by the resistance front could be expected in the coming hours, according to state TV. Comment was made around 20:53BST on Monday.
• US Secretary of State Blinken confirmed US President Biden will travel to Israel on Wednesday and will reaffirm US solidarity with Israel, while he added that Biden will make it clear that Israel has the right to defend itself and will underscore their message to any actor trying to take advantage of the crisis to attack Israel. Furthermore, Blinken said US and Israel agreed to develop a plan that will allow aid to reach Gaza civilians and noted it is critical that aid begin to flow into Gaza as soon as possible.
• White House's Kirby said US President Biden expects to hear from Israeli officials about what they need, while he added that President Biden will then travel to Amman to meet with Jordan's King Abdullah, Egyptian President El-Sisi and Palestinian Authority President Abbas.
• US Central Command head General Kurilla flew to Israel for talks with military leaders with the visit aiming to ensure Israel has what it needs to defend itself and is focused on avoiding expansion of the conflict.
• Russia's draft UN Security Council resolution on Israel and Gaza failed to receive the minimum nine votes needed, while the Russian UN envoy said the UN Security Council is hostage to Western countries and the UN vote shows who is in favour of a truce in Gaza and delivery of humanitarian aid. Furthermore, the US envoy to the UN accused Russia of giving cover to a terrorist group that brutalises civilians by not condemning Hamas in a draft resolution, according to Reuters.
• US Defense Secretary Austin has put in "be ready to deploy" orders for a select number of American troops should Israel need them, while a separate report stated that about 2,000 troops were told to prepare for deployment.
• The delay in the Israeli ground attack on Gaza is reportedly due to a growing concern that Hezbollah is waiting for the moment that most IDF forces are committed to Gaza to open a full front with the IDF in the north, according to Jerusalem Post sources.
• Hamas military wing spokesperson said they have captives of other nationalities who are guests and will be released when circumstances allow, while they warned of participation of any foreigners in the battle alongside Israeli troops. Furthermore, the Hamas' Diaspora office head said there are 6k prisoners in Israeli prisons that they want to be freed in exchange for Israeli captives and said Lebanon's Hezbollah thankfully took steps, but the battle needs more.
• Russian President Putin said China's proposal for peace talks with Ukraine could become a realistic basis for a peace agreement, according to an interview with Chinese television. However, he also accused Ukraine of not allowing peace negotiations, according to DPA.

EU/UK

NOTABLE HEADLINES

• ECB President Lagarde said she is watching oil for inflation risks.
• ECB Chief Economist Lane said the current interest rate of 4% will do a great deal to bring inflation back down, especially as there’s still more tightening in the pipeline. Lane said the most effective way to tighten policy further, if necessary, is to further increase the interest rate and if they have inflation shocks that are sufficiently large or sufficiently persistent, they have to be open to doing more. Furthermore, he said only when they are sufficiently confident of reaching the target, they can normalise policy, but this is quite some distance from where they are now.