• APAC stocks traded mixed following a similar performance on Wall St while the region also digested the latest Chinese GDP and activity data which topped forecasts.
• The latest geopolitical headlines included news of a strike on a hospital in Gaza which saw both sides point the blame at each other.
• European equity futures are indicative of a slightly softer open with the Euro Stoxx 50 future -0.2% after the cash market closed up 0.1% yesterday.
• DXY is steady on the 106 level, EUR/USD remains sub-1.0600, Cable sits below 1.22 ahead of inflation metrics.
• Looking ahead, highlights include UK CPI, EZ HICP (Final), US Building Permits/Housing Starts, ECB's Lagarde & Elderson, Fed's Williams, Waller, Bowman, Harker & Cook, Supply from Germany & US
• Earnings from ASML, Segro, Barratt Developments, Whitbread, Deutsche Boerse, Netflix, Tesla, Morgan Stanley & Abbott.

US TRADE

EQUITIES

• US stocks traded mixed and yields climbed following stronger-than-expected US Retail Sales and Industrial Production data, while participants also digested earnings releases, US chip restrictions and the latest geopolitical headlines including news of a strike on a hospital in Gaza which saw the sides point the blame at each other.
• SPX -0.01% at 4,373, NDX -0.33% at 15,122, DJIA +0.04% at 33,987, RUT +1.09% at 1,766.
• Click here for a detailed summary.

NOTABLE US HEADLINES

• Fed's Barkin (non-voter) said policymakers will have a good debate when asked if the Fed will keep rates unchanged at the November 1st meeting, while he added that the recent inflation report was only one report, coming after several good ones. Furthermore, Barkin stated that longer-term yields have moved up which has tightened financial conditions and the challenge with depending on yields is that they can move and they don't know where they will be three weeks from now given what's happening globally.
• Fed Discount Rate Minutes showed Cleveland Fed directors wanted a Discount Rate hike in September.
• Atlanta Fed GDPNow for Q3 was hiked to 5.4% from 5.1%.

APAC TRADE

EQUITIES

• APAC stocks traded mixed following a similar performance on Wall St where the focus was on retail sales data, earnings releases and geopolitical headlines including a deadly strike at a Gaza hospital which both sides blamed each other for, while the region also digested the latest Chinese GDP and activity data which topped forecasts.
• ASX 200 was positive as strength in healthcare, financials and the commodity-related sectors atoned for the losses in tech and utilities but with gains limited amid a higher yield environment.
• Nikkei 225 was indecisive after a recent source report noted potential hawkish revisions to the BoJ’s Core CPI forecasts, while the rise in yields prompted an unscheduled purchase operation by the BoJ.
• Hang Seng and Shanghai Comp. were varied despite better-than-expected Chinese GDP, Industrial Production and Retail Sales with several tech stocks hit after the US expanded chip restrictions and amid property sector woes as Country Garden is seen to likely have defaulted and with China property stocks gauge on course for its lowest since 2009.
• US equity futures were rangebound as participants reflected on the latest geopolitical headlines and Chinese data, while attention stateside turns to upcoming Fed speakers and earnings releases including from Netflix after-hours.
• European equity futures are indicative of a slightly softer open with the Euro Stoxx 50 future -0.2% after the cash market closed up 0.1% yesterday.

FX

• DXY was rangebound after it failed to sustain the initial gains from the stronger-than-expected US retail sales data and despite above-forecast industrial production and a higher yield environment, while the focus turns to the upcoming busy schedule of Fed speakers.
• EUR/USD took a breather after yesterday’s upward momentum was cut short just shy of the 1.0600 territory
• GBP/USD was little changed and languished beneath the 1.2200 level heading into the latest UK CPI data.
• USD/JPY traded sideways with a firm footing above 149.00 after the recent widening of yield differentials.
• Antipodeans were firmer with brief support seen following the encouraging Chinese data releases.
• PBoC set USD/CNY mid-point at 7.1795 vs exp. 7.3079 (prev. 7.1796).

FIXED INCOME

• 10yr UST futures attempted to nurse some of the prior day’s data-induced losses but with the rebound limited amid the higher yield environment and ahead of several Fed speakers.
• Bund futures were stuck near yesterday’s lows with a floor around the 128.00 level.
• 10yr JGB futures were subdued after the 10yr yield rose to its highest since 2013 and with only brief support seen following the BoJ’s announcement to conduct unscheduled bond purchases.

COMMODITIES

• Crude futures rallied following bullish inventories, as well as encouraging Chinese GDP and activity data.
• US Energy Inventory Data (bbls): Crude -4.4mln (exp. -0.3mln), Gasoline -1.6mln (exp. -1.1mln), Distillates -0.6mln (exp. -1.4mln), Cushing -1mln
• Russian Deputy PM Novak said it is still too early to talk about the OPEC+ decision in November, according to a Bloomberg interview.
• Australia's Offshore Alliance stated regarding the Chevron (CVX) deal that members voted 94% in support of an in-principle agreement to suspend protected industrial action.
• Spot gold was boosted amid strength across commodities as Chinese participants entered the fray.
• Copper futures gained with prices underpinned following the better-than-expected Chinese data.

CRYPTO

• Bitcoin traded marginally higher and gradually rose above the USD 28,500 level.

NOTABLE ASIA-PAC HEADLINES

• Chinese President Xi said at the Belt and Road Forum that cooperation has progressed from sketching the outline to filling the details and blueprints have turned to real projects. Xi also stated that China will build a new logistics corridor across the European continent linked by railway transportation and will enter into free trade agreements with more countries, as well as remove all restrictions on foreign investment access in the manufacturing sector. China will also deepen reform in state-owned enterprises, digital economy, intellectual property and government procurement.
• China's stats bureau said the positive momentum of China's economic recovery was more obvious in Q3 and that domestic economic growth has stabilised and picked up. Furthermore, it stated the foundation of the economic recovery and improvement needs to be further consolidated, while it also noted that if China's Q4 GDP Y/Y growth could hit above 4.4%, then the full-year target of around 5% could be achieved, according to Reuters.
• China said it firmly opposes export restrictions imposed by the US on advanced AI chips, according to the Chinese embassy in Washington.

DATA RECAP

• Chinese GDP QQ (Q3) 1.3% vs. Exp. 1.0% (Prev. 0.8%)
• Chinese GDP YY (Q3) 4.9% vs. Exp. 4.4% (Prev. 6.3%)
• Chinese Industrial Production YY (Sep) 4.5% vs. Exp. 4.3% (Prev. 4.5%)
• Chinese Retail Sales YY (Sep) 5.5% vs. Exp. 4.9% (Prev. 4.6%)

GEOPOLITICAL

ISRAEL-HAMAS

• Al Jazeera TV reported that at least 200 were killed in an Israeli air strike on a hospital in Gaza and an IDF spokesperson said they don't know yet what's the reason for the explosion at the hospital in Gaza and are checking what happened there. An Israeli military spokesperson later said that rockets fired by Palestinian Islamic Jihad passed by the hospital at the time of the strike and another spokesman said they intercepted a conversation in which militants acknowledged a misfire, according to Reuters.
• Palestinian Islamic Jihad spokesman denied Israeli allegations that the militant group is responsible for the strike, while Palestinian Hamas Leader Haniyeh said the hospital massacre is a new turning point.
• US President Biden said he is outraged and deeply saddened about the Gaza hospital attack, while he spoke with Jordan's King and Israeli PM Netanyahu and directed the national security team to continue gathering information about what happened, according to Reuters. Furthermore, President Biden reportedly plans to ask Congress for roughly USD 100bln in Ukraine, Israel, and border supplemental aid, according to Bloomberg.
• White House's Kirby said US President Biden will meet with families of victims and hostages of the Hamas attack and will be asking the Israelis some tough questions. Kirby added that President Biden will ask Israel about its plans going forward and will make it clear he doesn't want the conflict to expand, while Kirby added that there are no plans to put US boots on the ground in combat in Israel.
• White House has been discussing the possibility of using military force if Hezbollah joins the war in Gaza and attacks Israel with its huge arsenal of rockets, according to Axios citing US and Israeli officials.
• Jordan cancelled the summit with US President Biden and the Egyptian and Palestinian leaders in Amman on Wednesday and said there is no use in talking about anything else now except stopping the war.
• Palestinian President Mahmoud Abbas said targeting Gaza hospital is a hideous war massacre that cannot be tolerated and Israel has crossed all red lines. Furthermore, the Palestinian UN envoy, standing with Arab envoys, said they are outraged by the massacre at the Gaza hospital and blamed Israeli forces, while the envoy added that Arab envoys demand an immediate ceasefire.
• Egyptian President Sisi said he condemns in the strongest terms Israel's bombardment of the Gaza hospital and it is a clear violation of international law, while the UAE also condemned Israeli attack on the hospital in Gaza.
• Lebanon's Hezbollah announced Wednesday as "a day of unprecedented anger" against Israel and President Biden's visit to Israel. It was separately reported that Hezbollah is intensifying military preparations including an escalation in rocket fire and a pending decision from Tehran will determine whether the group will proceed with full-scale military actions, according to an i24 news journalist citing sources.
• Russia and UAE requested an urgent meeting of the UN Security Council on October 18th after the strike on the hospital in Gaza, according to TASS.
• Israel's national security headquarters told Israelis in Turkey to leave the country immediately.

OTHER

• Russian ambassador to the US said the decision by the US to send ATACMS to Kyiv is a grave mistake, according to AFP News Agency.
• US Assistant Secretary of Defense Ratner said China is stepping up coercive and risky behaviour in the South China Sea, while he added that China is seeking to intimidate the international community.
• US military is willing to discuss with Japan and South Korea forming trilateral operational plans for contingencies involving North Korea and China, according to Nikkei citing a top US general for nuclear operations.
• Finland's National Bureau of Investigation is probing several ships that were present in the area at the time of the Baltic Connector pipeline incident on October 8th, while the ships under investigation include Russian Sevmorput and Chinese NewNew Polar Bear.

EU/UK

NOTABLE HEADLINES

• ECB's de Guindos said economic activity remains subdued and is expected to stagnate until year-end, while the financial stability outlook is fragile as the system adapts to a higher rate environment.
• ECB's Holzmann said not out of the woods yet on inflation and further shocks may require additional rate hikes.
• ECB's Stournaras said the Middle East crisis casts a shadow over the ECB meeting and the Israel-Hamas war supports the case for keeping rates on hold, according to FT.