• APAC stocks traded mixed following a similar lead from Wall Street with Mainland China leading the gains overnight.
• DXY eventually dipped under the 105.50 mark as Treasury yields held onto losses; EUR/USD rose above its 50 DMA while USD/JPY tested 149.50 to the downside.
• Bitcoin saw a volatile session as prices surged to levels near USD 35,000 before pulling back to around USD 33,000 and then stabilising around USD 34,500 - some cited ETF optimism.
• European equity futures are indicative of a slightly softer open for Europe, with the Euro Stoxx 50 future -0.1% after cash markets closed +0.4% yesterday.
• White House National Security Council spokesperson Kirby said the US does not believe this is a time for a ceasefire in the Israel-Hamas conflict; Israel confirmed two hostages were released by Hamas.
• Looking ahead, highlights include German GfK, UK Unemployment, EU/UK/US Flash PMIs, NBH Policy Announcement, supply from Netherlands, UK, Germany & US.
• Earnings from ASM International, Orange, Puma, Logitech, Novartis, Barclays, Microsoft, Alphabet, Visa, Coca-Cola, Texas Instruments, Verizon, General Electric.

US TRADE

EQUITIES

• US stocks were mixed in choppy trade with Ackman-induced gains pared into the close, while the Nasdaq was kept afloat by the pullback in bond yields.
• SPX -0.17% at 4,217, NDX +0.30% at 14,605, DJI -0.58% at 32,936, RUT -0.89% at 1,666.
• Click here for a detailed summary.

NOTABLE HEADLINES

• NVIDIA (NVDA) reportedly plans to enter the PC chip market with Arm (ARM) based CPU chip as early as 2025, according to Reuters citing sources; AMD (AMD) also plans to enter the Arm-based CPU chip market; both in a major new challenge to Intel (INTC). Microsoft (MSFT) has encouraged chip firms to focus on powering new AI features in Windows.

APAC TRADE

EQUITIES

• APAC stocks traded mixed following a similar lead from Wall Street with Mainland China leading the gains overnight.
• ASX 200 traded in the green with the upside led by Metals & Mining following the prior session’s gains in the complex, although gold names lag after the precious metal unwound some geopolitical risk premium after the weekend.
• Nikkei 225 gave up the 31k level in early trade as the prior day’s firming of the JPY weighed on the export-heavy index.
• Hang Seng and Shanghai Comp opened mixed with the former playing catch-up following its long weekend, whilst the latter gained as reports also suggested US and China held the first working group meeting.
• US equity futures resumed trade with a modest broad-based upside across the board, although the futures lacked momentum.
• European equity futures are indicative of a slightly softer open for Europe, with the Euro Stoxx 50 future -0.1% after cash markets closed +0.4% yesterday.

FX

• DXY eventually dipped under the psychological 105.50 mark as Treasury yields held onto losses overnight, whilst downside levels for the index include its 50 DMA at 105.187. G10s were firmer against the Dollar to varying degrees.
• EUR/USD rose above yesterday’s 1.0677 peak and its 50 DMA at 1.0678 as the Dollar waned.
• GBP/USD similarly benefitted from the DXY's retreat as the pair eventually topped yesterday's 1.2258 high.
• JPY held onto the prior day’s spoils as yields held at lows with little FX reaction seen to the BoJ’s unscheduled bond purchases and the mostly softer PMIs. USD/JPY tested 149.50 to the downside from a 149.78 APAC high as the Dollar fell.
• Antipodeans outperformed with Aussie at the top of the bunch irrespective of a deterioration in PMIs, although the upside was seemingly in tandem with a pickup in mainland Chinese equity markets.

FIXED INCOME

• 10yr UST futures held onto yesterday’s gains whereby the curve saw a large bull-flattening after Bill Ackman announced he was closing his US bond short.
• Bund futures edge above yesterday’s 128.36 high and closer to the 128.50 mark with participants on standby for this week's ECB confab.
• 10-year JGB futures found an overnight floor after the BoJ announced unscheduled purchases in the 5-10-year and 10-25-year buckets.

COMMODITIES

• Crude futures consolidated overnight after prices tumbled on Monday amid the lack of escalation in the Israel-Hamas situation leading to an unwind in the geopolitical risk premium. Brent reclaimed a USD 90/bbl+ handle after settling under the level yesterday.
• Spot gold slightly benefitted from the pullback in the Dollar but prices remained within yesterday's range.
• Copper futures briefly rose in tandem with gains in the Chinese mainland stock markets with added tailwinds from a pullback Dollar at the time.

CRYPTO

• Bitcoin saw a volatile session as prices surged to levels near USD 35,000 before pulling back to around USD 33,000 and then stabilising around USD 34,500; some cited ETF optimism.
• Grayscale received a court order in its fight with SEC over Bitcoin ETF and Grayscale court ruling sends Bitcoin ETF approval back to SEC, according to Bloomberg

NOTABLE ASIA-PAC HEADLINES

• The US Treasury Department said the US and China held the first meeting of the economic working group which serves as a channel to discuss bilateral economic policies, according to Reuters.
• Former Chinese Vice Premier Liu He has retained his position as office director for a key economic policymaking body headed by Chinese President Xi, according to SCMP sources.
• Japan aims to set shared standards with the US and Europe on subsidies for EVs, chips and other "critical fields", according to Nikkei citing the Japanese Minister of Economy, Trade and Industry.
• Japan will extend until Spring 2024 subsidies to curb utility bills and will extend until April 2024 subsidies to curb fuel prices, according to a draft economic package cited by Reuters.
• BoJ unscheduled bond purchases: offered to buy JPY 100bln in 10-25yr JGBs and JPY 300bln in 5-10yr, according to Reuters.
• PBoC injected CNY 593bln via 7-day reverse repos with the rate at 1.80% for a CNY 522bln net daily injection.
• PBoC set USD/CNY mid-point at 7.1786 vs exp. 7.2992 (prev. 7.1792).

DATA RECAP

• South Korean PPI Growth YY* (Sep) 1.3% (Prev. 1.0%)
• South Korean PPI Growth MM* (Sep) 0.4% (Prev. 0.9%)
• Australian Manufacturing PMI (Oct P) 48.0 (Prev. 48.7)
• Australian Services PMI (Oct P) 47.6 (Prev. 51.8)
• Australian Composite PMI (Oct P) 47.3 (Prev. 51.5)
• Japanese JibunBK Manufacturing PMI Flash (Oct) 48.5 (Prev. 48.5)
• Japanese JibunBK Services PMI Flash (Oct) 51.1 (Prev. 53.8)
• Japanese JibunBK Composite PMI Flash (Oct) 49.9 (Prelim. 52.1)

ISRAEL-HAMAS

• Israel confirmed two hostages released by Hamas were handed over to the Israeli military, according to a statement.
• On reports of the release of 50 hostages, a US State Department spokesperson says, "I've seen those reports. I can't confirm them.", according to a CBS reporter. Gaza hostage talks have reportedly been held up over Hamas' demand for fuel; Hamas wants fuel included in aid convoys but Israel wants all hostages released before permitting fuel delivery to Gaza, according to WSJ.
• White House National Security Council spokesperson Kirby said the US does not believe this is a time for a ceasefire in the Israel-Hamas conflict, according to Reuters.
• US President Biden, when asked about a ceasefire, said we should have hostages released, according to Reuters.
• Hamas said its leader Omar Daraghmeh was killed in Israeli prisons as a result of torture, according to Al Jazeera.
• Senior Hamas Leader Khaled Meshaal told Sky News that civilian hostages held by Hamas will be released if Israel reduces air strikes on Gaza.
• The US State Department said they are concerned about the possibility of conflict moving from Gaza to north, and to southern Lebanon, according to Reuters.
• IDF said it has "attacked several Hezbollah targets, including a surveillance and monitoring post in southern Lebanon", according to Al Arabiya.
• "Israeli occupation forces storm the village of Burqa, north of Nablus in the West Bank, amid gunfire", according to Al Jazeera.
• The US has intelligence that Iranian-backed militia groups are planning to ramp up attacks against US forces in the Middle East, as Iran seeks to capitalize on the backlash in the region to US support for Israel, according to CNN citing US officials.
• US official said Iran is seeking to escalate the conflict in the region, according to Bloomberg, adding Iranian fingerprints are all over the uptick in attacks while adding US presence in the Middle East includes intel sharing.
• Russian Foreign Minister says "US reinforcements in the Middle East threaten to escalate [tensions]", according to Al Arabiya.
• China's Foreign Minister had a call with the Israeli Foreign Minister on Monday, according to Chinese state media.
• US President Biden spoke with Israeli PM Netanyahu on Monday and discussed the war in Gaza, according to Axios citing a White House official.

OTHERS

• Russian President Vladimir Putin suffered a cardiac arrest in the presidential bedroom on Sunday, an insider group revealed; he regained consciousness, according to Sky News Australia citing unverified Telegram reports.
• "Iran-backed militants have launched a drone attack against the al-Omar oil field, which hosts the largest US base in Syria, causing two explosions in the area", according to Iran International citing Syrian press.
• US Navy announces interception of missiles and drones launched by the Houthis across the Red Sea days ago", according to Al Arabiya.
• US Secretary of State Blinken is to host China's top diplomat Wang Yi in Washington between Oct 26-28th, according to a senior admin official cited by Reuters, adding that the US is concerned over China's recent destabilising actions in the South China Sea.
• The EU still lacks "very clear evidence" of unfair practices to launch a formal probe into China's wind power industry, according to Reuters sources.

EU/UK

NOTABLE HEADLINES

• REUTERS POLL: BoE to hold the Bank Rate at 5.25% on Nov 2nd, according to 61 out of 73 economists; 12 expect 25bps rise to 5.50%; first BoE rate cut to 5.0% to come in Q3 2023 (unch from Sept poll).