• APAC stocks traded cautiously following the losses stateside as participants digested earnings releases and negative stock-specific updates, while yields also continued to edge higher.
• DXY has pulled back a touch from recent gains, EUR/USD lingers just below the 1.08 mark, USD/JPY sits on a 152 handle.
• European equity futures are indicative of a contained cash open with the Euro Stoxx 50 future -0.1% after the cash market closed lower by 0.3% on Wednesday.
• ECB's Centeno said 50bps is on the table with the data to determine the size of the cut. He later noted that the Bank is likely lagging behind the curve.
• Looking ahead, highlights include EZ, UK & US Flash PMIs, US Weekly Claims, New Home Sales, ECB's Lane & McCaul, Fed's Hammack, BoE's Bailey & Mann.
• Earnings from Renault, Orange, Danone, UniCredit, Equinor, London Stock Exchange Group, Unilever, Abrdn, Bunzl, Barclays, Honeywell International, United Parcel Service, Southwest Airlines, Northrop Grumman, American Airlines Group, Union Pacific, Capital One Financial.

US TRADE

EQUITIES

• US stocks were pressured and the major indices all finished in the red with the tech-heavy Nasdaq 100 leading the declines amid weakness in mega-cap names Apple (-2.2%) and Nvidia (-2.8%) with the former weighed on by cautious analyst commentary and reports of Mac delays, while NVDA was hit after it announced a flaw in the Blackwell AI chip, although TSMC had fixed the issue. As such, sectors were largely in the red with Consumer Discretionary and Technology the laggards although Real Estate and Utilities showed some resilience and were the only industries to finish positively due to their haven nature in risk-off trade, while there was a deluge of earnings and stock specific headlines that added to recent woes with the highlights arguably the McDonald's (-5%) E.Coli outbreak and Boeing's (BA) (-1.8%) weak earnings report.
• SPX -0.92% at 5,797, NDX -1.55% at 20,067, DJIA -0.96% at 42,515, RUT -0.79% at 2,214.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Fed's Beige Book said on balance, economic activity was little changed in nearly all Districts since early September although two Districts reported modest growth. Furthermore, most Districts reported declining manufacturing activity but activity in the banking sector was generally steady to up slightly and loan demand was mixed, while some Districts noted an improvement in the outlook due to the decline in interest rates.
• Apple (AAPL) iPhone 16 orders were reportedly cut by around 10mln units for Q4 2024-Q2 2025 and there is no evidence yet that Apple Intelligence could boost iPhone shipments in the near term, according to TF International Securities analyst Ming-Chi Kuo. It was separately reported that Apple delayed its planned debut of Mac Studio until later in 2025 and is preparing to launch a new low-end iPad around spring 2025, as well as readies MacBook Air models with the M4 chip for early 2025.
• Tesla Inc (TSLA) Q3 2024 (USD): Adj. EPS 0.72 (exp. 0.58), Revenue 25.18bln (exp. 25.37bln). Gross margin 19.8% (exp. 16.8%), expects slight growth in vehicle deliveries in 2024. Tesla shares were higher by 12.1% after-hours
• T-Mobile US Inc (TMUS) Q3 2024 (USD): EPS 2.61 (exp. 2.42), Revenue 20.16bln (exp. 20.01bln).
• International Business Machines Corp (IBM) Q3 2024 (USD): Adj. EPS 2.30 (exp. 2.23), Revenue 14.97bln (exp. 15.07bln).

APAC TRADE

EQUITIES

• APAC stocks traded somewhat cautiously following the losses stateside where the major indices declined as participants digested earnings releases and negative stock-specific updates, while yields also continued to edge higher.
• ASX 200 initially retreated following a further deterioration in manufacturing PMI data but then gradually clawed back opening losses with the recovery spearheaded by resilience in defensives and tech.
• Nikkei 225 traded indecisively as participants reflected on recent currency moves and Japanese PMI data contracted.
• Hang Seng and Shanghai Comp were pressured amid weakness in the tech and property sectors with the latter industry not helped after Moody’s noted that several developers are to feel earnings pain, while macro newsflow remained quiet and a continuation of the firm liquidity efforts by the PBoC also failed to inspire a turnaround.
• US equity futures were mixed with mild outperformance in Nasdaq 100 futures after Tesla shares surged by a double-digit percentage after-market on the back of a strong earnings report.
• European equity futures are indicative of a contained cash open with the Euro Stoxx 50 future -0.1% after the cash market closed lower by 0.3% on Wednesday.

FX

• DXY took a breather after recent gains and with very little in the way of fresh catalysts although the attention now shifts to upcoming data releases stateside including Jobless Claims, New Home Sales and the latest PMI data.
• EUR/USD lacked direction following the recent slip beneath the 1.0800 handle and after the slew of ECB speakers including Centeno who stated that downside risks to growth are accumulating and that 50bps is on the table, while Panetta said the EZ economy is weakening and can't exclude that the ECB must go below neutral.
• GBP/USD was contained after retreating from near the 1.3000 level, while there were comments from BoE Governor Bailey who noted that disinflation had taken place faster than expected.
• USD/JPY continued its gradual pullback from yesterday's brief foray into 153.00 territory, while the recent price moves have spurred a renewal of the familiar jawboning by Japanese officials.
• Antipodeans rebounded off the prior day's lows but with the recovery limited following weak Manufacturing PMI data from Australia and the mixed risk appetite.
• PBoC set USD/CNY mid-point at 7.1286 vs exp. 7.1284 (prev. 7.1245).

FIXED INCOME

• 10yr UST futures nursed some of the losses from recent bear flattening with a rebound facilitated by support at 111.00.
• Bund futures traded rangebound beneath the 133.00 level with demand restricted following this week's bond sell-off.
• 10yr JGB futures were indecisive amid the non-committal risk tone in Tokyo and after weaker results from the latest 20yr JGB auction, although prices were later boosted as Japanese stocks eventually faltered again.

COMMODITIES

• Crude futures recouped the prior day's losses amid ongoing geopolitical concerns and with mild upside also seen after reports of explosions in the Syrian capital of Damascus due to Israeli aggression.
• Spot gold regained some composure after sliding from its record highs alongside recent dollar strength.
• Copper futures gradually edged higher but with further upside capped amid the mixed risk appetite.

CRYPTO

• Bitcoin rebounded overnight and returned to above the USD 67,000 level.

NOTABLE ASIA-PAC HEADLINES

• BoJ Governor Ueda said the BoJ is still maintaining a "fairly easy" monetary stance and underlying inflation has been rising slowly. Ueda said when there is huge uncertainty, would usually want to proceed cautiously and gradually, while he added that it is very hard to pin down the appropriate size of rate hikes from here on and it is very important to make clear their basic monetary policy strategy to contain excessive build-up of yen carry trade positions.
• Japanese Finance Minister Kato said no comment on FX levels and intervention but noted it is desirable for currencies to move stably reflecting economic fundamentals and is closely watching FX moves with a sense of urgency, while he added that one-sided, rapid FX moves were recently seen in the FX market.

DATA RECAP

• South Korean GDP QQ Advance (Q3) 0.1% vs. Exp. 0.5% (Prev. -0.2%)
• South Korean GDP YY Advance (Q3) 1.5% vs. Exp. 2.0% (Prev. 2.3%)
• Japanese JibunBK Manufacturing PMI Flash SA (Oct) 49.0 (Prev. 49.7)
• Japanese JibunBK Services PMI Flash SA (Oct) 49.3 (Prev. 53.1)
• Japanese JibunBK Composite PMI Flash SA (Oct) 49.4 (Prev. 52.0)
• Australian Judo Bank Manufacturing PMI Flash (Oct) 46.6 (Prev. 46.7)
• Australian Judo Bank Services PMI Flash (Oct) 50.6 (Prev. 50.5)
• Australian Judo Bank Composite PMI Flash (Oct) 49.8 (Prev. 49.6)

GEOPOLITICS

MIDDLE EAST

• Israel Broadcasting Corporation announced IDF's readiness to respond to the Iranian missile attack.
• Explosions were heard in Syria's capital Damascus as a result of Israeli aggression, according to Syrian state TV.
• Iraqi armed factions loyal to Iran announced the targeting of a vital target in the Golan with drones.
• Hezbollah operations room said it used new drones and precision missiles for the first time in strikes against Israel.
• US Secretary of State Blinken asked to reduce the intensity of attacks in Beirut during his visit to Israel, according to Al Jazeera. It was also reported that a rocket attack in Israel forced Blinken to briefly take shelter, according to NBC.
• Pentagon said US Secretary of Defense Austin expressed concern in a call with his Israeli counterpart about reports of strikes against the Lebanese army, according to Sky News Arabia.
• Turkey hit PKK targets in Northern Iraq and Syria after a deadly attack in Ankara, according to Turkish security sources.

OTHER

• US President Biden said the US is announcing today that it will provide USD 20bln in loans to Ukraine.
• US asked G7 to consider sanctions on Russian palladium and titanium, according to Bloomberg.

EU/UK

NOTABLE HEADLINES

• BoE Governor Bailey said disinflation has taken place faster than expected in the UK and elsewhere, while he added that a high UK savings rate reflects consumer caution and noted that UK inflation is below target but is pushed around by annual base effects.
• UK Chancellor Reeves will announce at the IMF plans to change the debt measurement rule to target public sector net financial liabilities which will open the door for the government to spend up to an additional GBP 50bln on infrastructure projects, according to The Guardian citing a government source.
• ECB's Centeno said downside risks to growth are accumulating and 50bps is on the table with the data to determine the size of the cut. He later noted that the Bank is likely lagging behind the curve.
• ECB's Escriva said the risk to inflation remains balanced.
• ECB's Holzmann said a quarter-point rate cut is probable in December and they are unlikely to have a 50bps cut in December but such a move is possible, while another option is a hold due to the October move, according to Bloomberg.
• ECB's Panetta said the ECB has clearly seen improvement in the inflation outlook and low inflation and weak growth are conducive to further cuts, while he added the EZ economy is weakening and can't exclude that the ECB must go below neutral. Furthermore, he said they are still far away from the neutral rate and would not take for granted that they will stop at the neutral rate.
• ECB's Vasle says no urgency in talking about undershooting inflation target and cutting rates below neutral; should keep cutting rated in "measured" increments.