• APAC stocks eventually traded firmer across the board as the well-received earnings from Amazon and Intel pushed sentiment into the positive after the mostly lower close on Wall Street.
• US equity futures resumed trading on a firmer footing as Amazon shares rose by over 5% in the after-market as the Co. was bullish on AWS in its conference call, while Intel shares had soared 7.5% amid high demand for AI products.
• US President Biden ordered strikes against two facilities in Syria used by Iran’s IRGC and Iran-backed groups and will take additional measures if attacks by Iran's proxies continue, according to Reuters citing the Pentagon.
• European equity futures are indicative of a modestly firmer open with Euro Stoxx 50 future +0.3% after cash markets had closed -0.6% on Thursday.
• Looking ahead, highlights include US PCE Price Index, Personal Income/Consumption
• Earnings: Air France, Carlsberg, Eni, Equinor, Sanofi; NatWest; Exxon, Chevron, Abbvie, Aon, Charter, Colgate, Phillips 66

US TRADE

EQUITIES

• US stocks were mostly lower amid the losses in Meta post-earnings alongside other large cap names. The relief of the strong 7yr Treasury auction provided some support but indices extended back lower in late trade.
• SPX -1.18% at 4,137, NDX -1.89% at 14,110, DJI -0.76% at 32,784, RUT +0.34% at 1,657.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Amazon.com Inc (AMZN) Q3 2023 (USD): EPS 0.94 (exp. 0.58), Revenue 143.1bln (exp. 141.41bln). Q4 23 net sales view 160-167bln (exp. 167bln). Q3 23 Operating income USD 11.19bln (exp. 7.71bln). Online stores net sales USD 57.27bln (exp. 56.82bln). Physical Stores net sales 4.96bln (exp. 4.99bln). Third-Party Seller Services net sales 34.34bln (exp. 33.4bln). Subscription Services net sales 10.17bln (exp. 10.13bln). AWS net sales USD 23.06bln (exp. 23.13bln). North America net sales USD 87.89bln (exp. 87.12bln). International net sales USD 32.14bln (exp. 32.08bln). Operating margin 7.8% (exp. 5.46%). Co. said it is seeing the pace and volume of closed AWS deals pick up. CFO said the Co. still sees customers being cautious on price, is using AI to show more relevant ads to shoppers. Lower inflation helped it with regard to certain shipping rates. Cost optimisation work in cloud is starting to slow down. Shares rose 5.3% after market.
• Intel Corp (INTC) Q3 2023 (USD): EPS 0.41 (exp. 0.22), Revenue 14.2bln (exp. 13.53bln); Datacenter & AI revenue 3.8bln (exp. 3.94bln); Guides Q4 revenue between 14.6-15.6bln (exp. 14.35bln); Q4 EPS Non-GAAP 0.44 (exp. 0.32). CEO said, "We see signs of normalization in the server market as we enter Q4". Shares rose 7.7% after market.
• US Treasury Secretary Yellen said US GDP is a good strong number, economy is doing very well but not expecting growth to continue at that pace; what we have looks like a soft landing. "We see good strong consumer spending, US growth is contributing to stronger global outcomes, Americans feel good about personal finances and jobs but seem worried about the economy." She added part of the yield increase is a reflection of expectations that interest rates will be higher for longer and it reflects the stronger economy. She said it is possible that longer-term yields will come down, but no one knows for sure, according to Reuters.
• UAW made a new proposal to General Motors (GM) as the sides bargain to end the strike, according to Bloomberg. GM is said to prepare a counteroffer on Thursday or Friday. Unions offer is similar to the tentative deal reached by Ford (F). (Newswires)
• US House Speaker Johnson thinks any stopgap spending bill should have conditions, via Fox News interview.

APAC TRADE

EQUITIES

• APAC stocks eventually traded firmer across the board as the well-received earnings from Amazon and Intel pushed sentiment into the positive after the mostly lower close on Wall Street.
• ASX 200 supported by its Consumer Staples sector, while an uptick in M/M PPI had kept the Industrial Sector’s gains capped, and Tech had resided as the laggard.
• Nikkei 225 saw its gains driven by its Industrial sectors, potentially following the US GDP metrics, while the Pharma sector lagged as Takeda shares slumped over 7% following their earnings.
• Hang Seng and Shanghai Comp opened mixed with the former firmer as its earnings season picked up and as the Hang Seng Tech index rose over 2%. Sentiment for the Mainland was initially muted but improved, while reports via China’s Securities Journal suggested China was likely to reduce the reserve requirement ratio in Q4 to support government bond issuance.
• US equity futures resumed trading on a firmer footing as Amazon shares rose by over 5% in the after-market as the Co. was bullish on AWS in its conference call, while Intel shares had soared 7.5% amid high demand for AI products.
• European equity futures are indicative of a modestly firmer open with Euro Stoxx 50 future +0.3% after cash markets had closed -0.6% on Thursday.

FX

• DXY traded towards the upper end of a tight 106.51-67 range vs. the previous day’s 106.52-89 parameter and with price action quiet amid a lack of developments ahead of US PCE.
• EUR/USD and GBP/USD were uneventful and traded flat just above 1.0550 and under 1.2150 respectively, while EUR/GBP also traded sideways but found support at 0.8700.
• USD/JPY gradually edged lower amid the hotter-than-expected Core Tokyo CPI coupled with geopolitical headlines after the Tokyo lunch break, although the pair remained on a 150 handle.
• Antipodeans were mixed with the Aussie narrowly outperforming after Aussie PPI picked up M/M following the hotter-than-expected CPI earlier in the week.

FIXED INCOME

• 10yr UST futures took a breather following the prior day’s gains as desks had cited short covering, while a fairly strong 7-year auction alleviated some demand concerns from the 5-year auction earlier in the week.
• Bund futures held onto the prior day’s gains above 128.50 but with price action contained post-ECB and ahead of the US PCE.
• 10-year JGB futures traded on a firmer footing with the corresponding yield also pulling back a touch from the previous day's high of 0.89% as focus had turned to the upcoming BoJ meeting.
• US sells USD 38bln of 7yr notes at 4.908%; stops-through by 0.2bps.

COMMODITIES

• Crude futures edged higher following reports that the US carried out airstrikes on Iranian proxy forces in Syria, with Brent reclaiming USD 88/bbl+ status.
• Spot gold held a positive bias amid the softer Dollar alongside the geopolitical headlines.
• Copper futures recovered as the Dollar eased towards the bottom of its range, while reports suggested Codelco had posted a 2.1% Y/Y increase in Q3 copper production and Peru is reportedly planning to cut red tape for the mining sector.
• Codelco posted a 2.1% Y/Y increase in Q3 copper production, according to Bloomberg.
• Peru is reportedly planning to cut red tape for the mining sector as part of a package expected to be unveiled next week to stem recession, according to Reuters citing the Economy Minister.
• US appeals court blocked the order requiring an expansion of planned federal offshore oil and gas auction in the Gulf of Mexico pending appeal, according to Reuters.

CRYPTO

• Bitcoin traded on either side of USD 34,000 with prices picking up off lows in tandem with geological headlines.

NOTABLE ASIA-PAC HEADLINES

• China likely to reduce the reserve requirement ratio (RRR) in Q4 to support government bond issuance, according to China Securities Journal citing analysts.
• China's former Premier Li Keqiang has passed away, according to state media CCTV; reportedly died of a heart attack at 68 years old.
• Fantasia Holdings (1777 HK) is entering into a framework cooperation agreement which could assist the group in alleviating its liquidity pressure and facilitate communication with its onshore creditors, according to Reuters.
• Japanese Finance Minister Suzuki said it is important for currencies to move stably reflecting fundamentals; No comment on forex levels, no comment on currency intervention; Will take thorough steps on FX with a strong sense of urgency, according to Reuters.
• Japanese PM Kishida said he thinks companies' willingness to raise wages is very strong, and said the next 2-3 years will be a crucial period for wage hikes, according to Reuters.

DATA RECAP

• Japanese CPI Tokyo Ex fresh food YY (Oct) 2.7% vs. Exp. 2.5% (Prev. 2.5%)
• Japanese CPI, Overall Tokyo (Oct) 3.3% (Prev. 2.8%)
• Chinese Industrial profit YTD (Sep) +11.9%% (Prev. +17.2%); YTD -9.0% (prev. -11.7%)
• New Zealand ANZ Consumer Confidence Index Oct: 88.1 (prev. 86.4); Consumer Confidence (M/M): 2.0% (prev. 1.6%).
• Australian PPI YY (Q3) 3.8% (Prev. 3.9%)
• Australian PPI QQ (Q3) 1.8% (Prev. 0.5%)

GEOPOLITICS

US-IRAN

• "US military carried out airstrikes on Iranian proxy forces in Syria in response to recent attacks on US bases since Oct 17", according to sources via Fox News' Griffin.
• US President Biden ordered strikes against two facilities in Syria used by Iran’s IRGC and Iran-backed groups and will take additional measures if attacks by Iran's proxies continue, according to Reuters citing the Pentagon.
• US Defense Official said Iran is responsible for strikes by its proxies against US troops in Iraq and Syria, according to Reuters.
• "Two IRGC facilities near Abu Kamal in Syria struck in US airstrikes; no word as to whether any Iranians were present at the facilities at the time, according to sr military official. “This has nothing to do with the conflict in Israel and Gaza”; Fox News
• US did not coordinate strikes in Syria with Israel, according to an official cited by Reuters

ISRAEL-HAMAS

• Israel's military said it was aware of a security incident near its Red Sea border with Egypt early on Friday, which follows reports of an explosion in the Egyptian town of Taba, according to Reuters.
• Egyptian media noted a rocket falling in the Egyptian city of Taba and wounding five people, according to Al Arabiya; reportedly hit a residential building, according to BNO News.
• Israeli Defence Minister said forces are fully prepared and will start military ground operation in due course, according to Reuters.
• Israeli fighter jets flew over Jenin city and its camp in West Bank, according to Al Jazeera.
• US Pentagon said 900 troops are deploying or have deployed to the Middle East from the continental US, including air defence operators. US troops have been attacked at least 12 times in Iraq and four times in Syria in the past week by Iran-affiliated groups. US troops were targeted in Iraq earlier on Thursday but the attack was unsuccessful, according to Reuters.
• Iran's Foreign Minister said to the US that Iran does not want expansion of the Israel-Hamas war; said if genocide continues the US will not be spared "from this fire", and said Hamas is ready to release civilian prisoners and the world should support the release of 6000 Palestinian prisoners. Iran warned Washington over its military and financial support to Israel, according to Reuters.
• A senior Hamas official told The Associated Press on Thursday that the Palestinian militant group had expected stronger intervention from Hezbollah in its war with Israel, in a rare public appeal to its allies in the region.
• Eight drones have been shot down in Syria's Hama and Aleppo countryside, according to State News citing the Defence Ministry.
• US and Qatar agree to revisit Gulf country's ties to Hamas after Gaza hostage crisis, according to Washington Post.
• EU summit agreed to call for "humanitarian corridors and pauses" in Gaza, according to Reuters.

OTHER

• White House's Kirby said National Security Adviser Sullivan looks forward to meeting China's Wang and continuing conversation with China; the Middle East will be part of Sullivan's discussions with Wang. Sullivan will have the opportunity to raise issues of concern like the South China Sea and also seek to reopen military-to-military communications, according to Reuters.
• US Treasury Secretary Yellen said not a penny of the USD 6bln in Iran oil proceeds held by Qatar have been touched; Iran oil proceeds can be only used for humanitarian proceeds not comfortable in discussing diplomatic conversations on them - Bloomberg TV Objective of China export and investment restrictions is to focus them on national security as narrowly as possible. We have constructive and deepening discussions with China on areas of mutual concern at a staff level.
• China's Premier expressed strong support for Iran in protecting its sovereignty, and opposed any external interference in Iran, according to Reuters.

EU/UK

NOTABLE HEADLINES

• ECB sources, via Reuters, said policymakers agreed to debate PEPP reinvestment end date in early 2024 and to debate minimum reserves as part of the framework review in the spring. The more complex issue of what proportion of their deposits commercial banks should park at their central bank and the enumeration of these mandatory reserves should happen only later. The expectation was that reinvestments would not end abruptly and the ECB would follow the sort of gradual approach it did with the larger APP.
• BoE's Cunliffe said a digital version of the Pound is probably needed, according to Reuters.

EM

• Chile Central Bank cuts benchmark interest rate by 50bps to 9.00% (exp. 75bps cut); decision unanimous, according to Reuters.