• European bourses/US futures experience pressure as geopolitical tensions overshadow stronger than expected Chinese activity data
• DXY comfortably above 106.00 but just off best, Yuan unable to benefit from mentioned data while GBP benefits from UK CPI
• Debt benchmarks pressured post-data though have climbed off lows with Bunds probing positive territory post-supply
• Commodities derive support from China and geopols., crude benchmarks hit highs as the Iranian Foreign Ministry calls for an oil embargo on Israel
• Looking ahead, highlights include US Building Permits/Housing Starts, Speeches from Fed's Williams, Waller, Bowman, Harker & Cook, Supply from the US, Earnings from SAP, Netflix, Tesla, Morgan Stanley & Abbott.

LOOKING AHEAD

• US Building Permits/Housing Starts, Speeches from Fed's Williams, Waller, Bowman, Harker & Cook, Supply from the US, Earnings from SAP, Netflix, Tesla, Morgan Stanley & Abbott.
• Click here for the Newsquawk Week Ahead summary.

EUROPEAN TRADE

EQUITIES

• European bourses have been relatively steady amid a ramp-up in earnings, Euro Stoxx 50 -0.5%, but with an underlying negative bias increasing in magnitude as geopolitical tensions overshadow stronger than expected Chinese activity data.
• Sectors are mixed, Telecom names outperform following Tele2 while Retail derives support from Adidas. On the flip side, Real Estate lags after Barratt Developments commentary. More broadly, European heavyweight ASML is lowered after a miss on revenue and bookings alongside cautious commentary for FY23.
• Stateside, futures are in-fitting with European performance and as such reside in the red, ES -0.4%; focus remains on the yield environment, though action is steady at present ahead of numerous Fed officials, data points and key earnings including NFLX, TSLA & MS.
• ASML (ASML NA) Q3 (EUR): Revenue 6.67bln (exp. 6.71bln), Bookings 2.6bln (exp. 4.5bln), Net Income 1.9bln (exp. 1.8bln), Gross Profit 3.46bln, Margin 51.9%. Click here for more.
• Click here for more details.

FX

• Aussie aloft after a run of better-than-expected Chinese data and hawkish remarks from RBA Governor Bullock, AUD/USD eyes 0.6400 and AUD/NZD tops 1.0800.
• Yuan unable to benefit from GDP, IP and Retail Sales beats as Country Garden misses coupon grace payment deadline, USD/CNY and USD/CNH up to 7.3125 and 7.3275 peaks respectively.
• DXY comfortably above the 106.000 handle and towards the top-end of 106.010-320 range as Franc reclaims 0.9000+ status, Pound probes 1.2200 post-firmer than forecast UK CPI and Loonie gets fillip from resurgent crude prices; USD/CAD and EUR/USD closing in on option expiries between 1.3610-00 and 1.0595-1.0600 respectively.
• PBoC set USD/CNY mid-point at 7.1795 vs exp. 7.3079 (prev. 7.1796).
• Click here for more details.
• Click here for the Option Expires for the NY Cut.

FIXED INCOME

• Debt futures are pressured after above forecast Chinese and UK data in the form of GDP, IP, Retail Sales and CPI.
• Bunds down to 127.69 before bouncing in the wake of a solid German 10 year auction; further upside seen as US players enter the fray and potentially alongside security alerts, with Bunds attempting to move back into positive territory.
• Gilts arrest slide at 92.50 and close to support zone.
• T-note holding above 106-00 ahead of US housing data, 20 year supply and more Fed rhetoric.
• Click here for more details.

COMMODITIES

• Commodities are deriving support from a combination of geopolitical tensions and upbeat Chinese data.
• WTI and Brent Dec futures experienced an additional tailwind from the Iranian Foreign Minister calling on Islamic countries to impose an oil embargo "on the Zionist regime"; commentary which, over the course of several minutes, lifted the benchmarks to respective USD 88.57/bbl and USD 93.00/bbl session peaks.
• Spot gold is at highs of USD 1946/oz given escalating geopolitical tensions while base metals glean after stronger than expected Chinese activity data and the sessions USD weakness.
• 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
• 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.
• India extends sugar export curbs for raw sugar, white sugar, refined sugar and organic sugar under some codes beyond 31st October till further orders.
• Chevron (CVX) Australia welcomes the in-principle agreement with the Australian workers' union on the proposed agreement for workers at the Gorgon and Wheatstone facilities; will now progress to an employee vote.
• Iranian Foreign Minister says "We call on Islamic countries to impose an oil embargo on the Zionist regime", according to Al Jazeera.
• Click here for more details.

NOTABLE EUROPEAN HEADLINES

• 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.
• ECB's Visco says inflation is not yet consistent with underlying price stability.
• France's Lille, Lyon, Toulouse and Nice airports evacuated after a security risk alert, according to Sky News Arabia.. Subsequently, it has been reported that six airports across France have been evacuated after emailed 'threats of attack', according to AFP citing police source

EUROPEAN DATA RECAP

• UK CPI YY (Sep 2023) 6.7% vs. Exp. 6.6% (Prev. 6.7%); All Services 6.9% (prev. 6.8%); MM (Sep 2023) 0.5% vs. Exp. 0.5% (Prev. 0.3%)
• UK Core CPI YY (Sep 2023) 6.1% vs. Exp. 6.0% (Prev. 6.2%); MM (Sep 2023) 0.5% vs. Exp. 0.5% (Prev. 0.1%)
• EU HICP Final YY (Sep 2023) 4.3% vs. Exp. 4.3% (Prev. 4.3%); X Food & Energy Final YY (Sep 2023) 5.5% vs. Exp. 5.5% (Prev. 5.5%); X F, E, A & T Final YY (Sep 2023) 4.5% vs. Exp. 4.5% (Prev. 4.5%)

NOTABLE US HEADLINES

• Fed's Harker (2023 voter) reiterates that the Fed should extend its pause on rate increases, via WSJ.
• Click here for the US Early Morning Note.

GEOPOLITICS

ISRAEL-HAMAS

• Israeli military spokesperson 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
• 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.
• 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.
• Egyptian President says "the idea of displacing Palestinians to Sinai means dragging Egypt into a war against Israel", reported via Al Arabiya.
• US President Biden says the US will ensure that Israel has what it requires to defend itself. Hospital explosion was caused by the "other side", based on what he has seen.
• Iranian Foreign Minister says "We call on Islamic countries to impose an oil embargo on the Zionist regime", according to Al Jazeera.

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.
• Russian President Putin says the supplies of ATACMS missiles to Ukraine create additional threats; ATACMS will not change significantly; supplies of ATACMS to Ukraine is a mistake by the US, via Tass.
• Russian President Putin and Chinese President Xi spoke for three hours, Putin is optimistic about further cooperation with China.
• 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.

CRYPTO

• Bitcoin is marginally firmer on the session, currently residing around the mid-point of USD 28.33-28.98k parameters with specific newsflow somewhat light amid numerous broader macro/geopolitical developments.

APAC TRADE

• 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.

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.
• BoJ is reportedly considering using the returns from its ETF purchases to shore up finances prior to an eventual exit from monetary easing, via Nikkei.
• Former BoJ member Sakurai says BoJ could end negative rates by year-end; BoJ's negative rates may be scrapped before YCC tweak.

DATA RECAP

• Chinese GDP QQ (Q3) 1.3% vs. Exp. 1.0% (Prev. 0.8%); 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%)
• JPMorgan lifts their China 2023 GDP growth forecast to 5.2% (prev. view 5.0%); Goldman Sachs cuts China's 2023 GDP growth forecast to 5.3% from 5.4%.