• APAC stocks traded lower across the board, following the weak lead from Wall Street; Mainland China saw the shallowest losses among the majors.
• Meta shares fell 3.4% after-market during the earnings call despite rising almost 5% post-earnings; Alphabet closed with losses of near 10%.
• DXY found a firmer footing and traded in an APAC range north of 106.50; G10s were softer across the board while USD/JPY approached 150.50.
• European equity futures are indicative of a softer open, with the Euro Stoxx 50 future down 0.9% after cash markets closed up 0.2%.
• Looking ahead, highlights include US GDP, PCE Prices Advance, IJC, ECB & CBRT Policy Announcements, ECB's Lagarde & BoE's Cunliffe, and Supply from the US.
• Earnings: BNP Paribas, Danone, Evolution, Hellofresh, Mercedes Benz, STMicroelectronics, Saint Gobain, TotalEnergies, Volkswagen; Standard Chartered, Unilever, WPP; Valero, Comcast, UPS, Southwest, Mastercard, Merck & more.

US TRADE

EQUITIES

• US stocks were lower with losses led by the NDX as Alphabet shares tumbled almost 10%, with losses across stocks exacerbated by large bear-steepening in USTs following an awful demand reception at the 5-year auction,
• SPX -1.43% at 4,186, NDX -2.47% at 14,381, DJIA -0.32% at 33,036, RUT -1.67% at 1,651.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Meta Platforms Inc (META) Q3 2023 (USD): EPS 4.39 (exp. 3.63), Revenue 34.15bln (exp. 33.56bln); Q4 revenue view 36.5-40bln (exp. 38.76bln). Operating margin 40% (exp. 33.9%). REVENUE BREAKDOWN: Advertising 33.64bln (exp. 32.94bln). Family of Apps 33.94bln (exp. 33.08bln). Reality Labs 210mln (exp. 313.4mln). Other 293mln (exp. 212.7mln). Click here for the full earnings. Shares -3.4% after market - participants cited a cautious/conservative outlook.
• International Business Machines Corp (IBM) Q3 2023 (USD): EPS 2.20 (exp. 2.13), Revenue 14.75bln (exp. 14.73bln); still sees FY revenue at constant FX +3-5% (exp. +3.01%) Adj. gross margin 55.5% (exp. 54.9%). FCF 1.68bln (exp. 1.35bln). REVENUE BREAKDOWN: Software 6.27bln (exp. 6.26bln). Consulting 4.96bln (exp. 5.1bln). Infrastructure 3.27bln (exp. 3.15bln). Financing 186mln (exp. 186mln).Shares +1.4% after market.
• UAW confirms they have a tentative agreement with Ford (F), and said strikers should go back to work while voting for a deal. UAW's deal with Ford includes a 25% wage increase. Ford workers will receive an 11% immediate wage hike, according to Reuters.
• Morgan Stanley (MS) announces Ted Pick to become Chief Executive Officer on January 1, 2024; James Gorman to become Executive Chairman. Incoming CEO Ted Pick says this is a 'volatile environment' for investment banking, according to Reuters.
• Federal Reserve confirms the lower cap in response to data showing costs for debit card transactions have significantly changed over time. Proposes automatically updating interchange fee cap every two years in response to the latest reported data. Proposes lowering the cap on debit card interchange fees from 21 cents per transaction to 14.4 cents, according to Reuters.
• US House Republican Mike Johnson secured 217 votes needed for speaker, according to Reuters.
• Biden Admin is reportedly seeking USD 3.1bln to reimburse telecom firms for removal of additional Huawei and ZTE equipment from US networks, according to Reuters.

APAC TRADE

EQUITIES

• APAC stocks traded lower across the board, following the weak lead from Wall Street as participants juggle earnings, geopolitics, and data as major central banks line up for their next confabs, with the ECB due today, while the BoJ, FOMC, and BoE are slated for next week.
• ASX 200 was dragged lower by its Tech sector, mirroring a similar sectoral performance seen stateside. Energy, however, was among the better performers.
• Nikkei 225 also saw its losses led by the Tech sector, whilst the losses in the JPY vs the USD failed to cushion the downside for the index.
• KOSPI saw its chip sector languish, facing added headwinds as SK Hynix slumped over 4% post-earnings.
• Hang Seng and Shanghai Comp opened lower, but their losses were shallower than those of their regional peers, potentially amid stimulus optimism, while reports, before the Chinese market opened, suggested that US President Biden was expected to meet with Chinese Top Diplomat Wang Yi on Friday at the White House.
• US equity futures softened across the board, with the NQ (-1.1%) lagging after Meta shares initially rose almost 5% following earnings but later fell into losses of over 3% during the earnings call.
• European equity futures are indicative of a softer open, with the Euro Stoxx 50 future down 0.9% after the cash market closed up 0.2%.

FX

• DXY found a firmer footing and traded in an APAC range north of 106.50. Higher yields kept the Buck buoyed, with the next potential resistance at the 6th of October peak at 106.98.
• EUR/USD and GBP/USD softened amid the stronger Dollar. The Euro is on standby ahead of the ECB, while Cable overnight dipped under 1.2100.
• USD/JPY extended gains above 150.00 after seeing a bid during the Wall Street closing bell as barriers around the psychological level were taken out, whilst the Japanese officials overnight sang from the same hymn sheet and kept the pair buoyed.
• Antipodeans lagged amid the broader risk tone. NZD/USD fell under 0.5800 and AUD/USD dipped under 0.6300, while RBA Governor Bullock offered mixed commentary despite more analyst calls for a November hike.

FIXED INCOME

• 10yr UST futures were flat, following Wednesday’s bear-steepening amid a poorly digested 5-year auction. Hawkish BoC tones and hot US new home sales data added pressure ahead of an expected rebound in Thursday's Q3 US GDP data.
• Bund futures edged lower overnight and remained sub-128 as traders gear up for the upcoming ECB confab.
• 10-year JGB futures were also subdued, with the 10-year Japanese debt yield edging towards 90 basis points as participants look ahead to potential fireworks by the BoJ next week.
• US sold USD 52bln of 5yr notes at 4.899%; tails by 1.9bps
• Bill Ackman made USD 200mln from his bet against US Treasuries, according to FT

COMMODITIES

• Crude futures held onto the prior day's gains as momentum surrounding a Gaza ground invasion picked up steam after confirmation from the Israeli PM that the operation would go ahead at some point.
• Spot gold drifted higher overnight despite upticks in the Dollar, in what appeared to be risk-induced gains.
• Copper futures were flat overnight, following the prior session's slide, prior session’s slide as optimism surrounding Chinese stimulus kept the red metal cushioned.

CRYPTO

• Bitcoin saw mild gains overnight but remained under USD 35k.

NOTABLE ASIA-PAC HEADLINES

• RBA Governor Bullock said CPI was a little higher than expected but was about where we thought it would come. She added that goods prices coming down, but services inflation remains persistent, but she's still considering whether CPI was a "material" change to outlook. Bullock said services inflation is higher than what the RBA is comfortable with and will have to build this into forecasts. She said she would not like to say if CPI makes the rate rise more likely, and said there will be a change to the inflation forecast, but she's not sure if it will be material. Bullock said the RBA is wary of inflation and has made it clear that the RBA might have to hike again but has not yet decided whether a rise is needed, according to Reuters.
• Westpac economists change their call on RBA, and now see a rate rise in November, according to Reuters.
• Japan Finance Minister Suzuki said closely watching FX moves with a high sense of urgency, according to Reuters. Suzuki added they stick to previous currency policy, closely watching FX moves.
• Japanese PM Kishida said BoJ's monetary policy aims to achieve sustainable inflation in tandem with wage hikes and does not contradict the government's inflation countermeasures, according to Reuters. Japanese PM Kishida says BoJ holds ETFs and JGBs as part of its monetary policy.
• PBoC injected CNY 424bln via 7-day reverse repos with the rate at 1.80% for a CNY 80bln net daily injection.
• PBoC set USD/CNY mid-point at 7.1784 vs exp. 7.3265 (prev. 7.1785)
• SK Hynix (000660 KS) - Q3 (KRW) Revenue at 9.1tln (exp. 8.17tln). Operating loss 1.8tln (exp. loss 1.7tln). Net loss 2.2tln (exp. loss 1.5tln); Sees about 10% rise in Q4 DRAM shipments vs Q3 due to the rise in sales. Q3 DRAM average selling price is up about 10% vs Q2. Q3 NAND average selling price is down slightly vs Q2. 2024 CAPEX to be higher than 2023, but to keep the hike to a minimum. Plans a fall of teens % in Q4 NAND shipments vs Q3, aiming to cut low-profit sales. Semiconductor prices are starting to stabilize.

DATA RECAP

• South Korean BOK Manufacturing BSI (Nov) 71.0 (Prev. 69.0)
• South Korean GDP Growth QQ Advance (Q3) 0.6% (Prev. 0.6%)
• South Korean GDP Growth YY Advance (Q3) 1.4% (Prev. 0.9%)
• Japanese Foreign Invest JP Stock w/e 214.7B (Prev. 1259.9B, Rev. 1263.9B)
• Japanese Foreign Bond Investment w/e -151.7B (Prev. 794.0B, Rev. 808.1B)
• Australian Import Prices (Q3) 0.8% (Prev. -0.8%)
• Australian Export Prices (Q3) -3.1% (Prev. -8.5%)

GEOPOLITICS

ISRAEL-HAMAS

• "IDF carried out an unusual and extensive ground raid by infantry and armored forces inside the Gaza Strip", according to Israeli press citing Army Radio; "According to the report, the raid took place on a larger scale and deeper inside Gaza" "The objective of the raid was to attack Hamas targets from the Gaza Strip and strengthen the defense." "The defense establishment says that this is a more extensive operation than the raids carried out so far in the past two weeks inside the Gaza Strip." Thereafter, the Israeli Army said soldiers have since exited Gaza, according to Bloomberg.
• The Israeli army announced the downing of a surface-to-air missile launched from Lebanon, according to Sky News Arabia.
• Russia and China vetoed the US-drafted UN Security Council Resolution on Israel and Gaza, according to Reuters.
• The US embassy in Kuwait said it is aware of threats made on social media by Alwiyat Al-waad Al-haq, a militia group in Iraq, against US military bases in Kuwait, according to Reuters.
• Israeli PM said we are preparing for a ground invasion, timing of invasion will be reached by consensus. He said he won't give details Doing everything possible to bring hostages home, adding civilians in Gaza should move to the South and encourage Israeli citizens to carry arms, and said he will have to answer for what happened on Oct 7th.
• Israeli military spokesperson said the war will be long and we will need to be resilient, according to Reuters.
• Hamas fighters reportedly trained in Iran before the October 7th attacks, according to WSJ citing sources; roughly 500 Hamas and Palestinian militants received specialized combat training. Sources add they have no information suggesting the training was Intended for October 7th.
• The Iranian Foreign Minister arrived in New York for international talks after the intensification of the crisis in Gaza, according to Al Jazeera citing Iranian press IRNA.

OTHER

• US President Biden is expected to speak with Chinese Top Diplomat Wang Yi on Friday at the White House, according to Reuters sources.
• Russian Defence Minister Shoigu said "we are to start training on nuclear strike", according to Reuters.
• An explosion was heard near a US base in the suburbs of al-Hasakah in north-eastern Syria, according to Iran International citing Syrian press.

NOTABLE HEADLINES

• Citi/YouGov Inflation Expectation Survey (Sep): Short-term expectations 4.2% (prev. 4.4% in August); 5-10yr ahead remains at 3.3%, according to Reuters.