• APAC stocks were higher amid tailwinds from recent trade-related rhetoric, including US President Trump's comments on Friday that 100% tariffs are not sustainable and that he will be meeting with Chinese President Xi.
• Nikkei 225 surged to a fresh all-time high above the 49,000 level amid a reignition of the Takaichi trade with the LDP leader on track to become Japan's first female PM following an agreement to form a coalition with Japan's Innovation Party.
• In China, PBoC maintained LPRs as expected, whilst Chinese GDP, Industrial Production and Retail Sales either matched or topped forecasts, and the CPC Central Committee is also holding a four-day closed-door meeting through to Thursday.
• US President Trump said on Friday that they are getting along with China, and it looks like the meeting with China will go forward, while he could move the November 1st deadline up if he wanted. Trump added that they will make a deal that will be good for both countries and thinks they will be in a strong position in trade talks with China.
• Israel’s Channel 12 reported that Israel was attacking Gaza, while the Israeli military said Hamas carried out multiple attacks against Israeli forces beyond the ‘yellow line’, violating the ceasefire; both sides later said they will adhere to the ceasefire once again.
• S&P lowered France to 'A+' from 'AA-'; Outlook Stable, while it cited heightened risks to budgetary consolidation; European equity futures indicate a positive cash market open with Euro Stoxx 50 futures up 0.8% after the cash market finished with losses of 0.8% on Friday.
• Looking ahead, highlights include German Producer Prices (Sep), Canadian Producer Prices (Sep), US Leading Index (Sep), New Zealand Trade (Sep), CCP 4th Plenum (20th-23rd), Speakers including ECB’s Schnabel & RBA’s Jones, Supply from EU & Italy, Earnings from Sandvik, Zions Bancorp & Cleveland Cliffs.

SNAPSHOT

• Click for the Newsquawk Week Ahead.

US TRADE

EQUITIES

• US stocks were predominantly bid on Friday, in which the SPX, NDX and DJI all posted gains, although the RUT saw further pressure. Nonetheless, the regional banking ETF had pared some of the prior day's losses following woes at ZION and WAL, as bank earnings were strong and helped with the reversal in sentiment, while US commentary on China was also supportive of the risk-on trade, as President Trump responded "no" when asked if he thinks the high tariffs on China will stay, and noted they get along well with China and that he will be meeting Chinese President Xi in two weeks.
• SPX +0.53% at 6,664, NDX +0.65% at 24,818, DJI +0.52% at 46,191, RUT -0.60% at 2,452.
• Click here for a detailed summary.

TARIFFS/TRADE

• US President Trump said he wants China to buy soybeans at least in the amount they were buying before, and he believes that China will make a deal on soybeans, while he added that they can lower what China has to pay in tariffs, but China has to do things for them too and they do not want China to play a rare earth game with them.
• US President Trump signed a proclamation on Friday to address the threat to national security from imports of medium and heavy-duty vehicles, parts and buses, while an official had announced that Trump is to impose 25% tariffs on heavy-duty trucks effective November 1st and will impose 10% tariffs on imported buses, as well as provide significant tariff relief for automakers’ US production.
• US President Trump said on Friday that they are getting along with China, and it looks like the meeting with China will go forward, while he could move the November 1st deadline up if he wanted. Trump added that they will make a deal that will be good for both countries and thinks they will be in a strong position in trade talks with China.
• US President Trump’s administration is reportedly quietly watering down some tariffs and has exempted more products from US tariffs in recent weeks, while it offered to exempt hundreds of more goods from farm products when countries strike deals with the US, according to WSJ.
• US Treasury Secretary Bessent and Chinese Vice Premier He Lifeng engaged in candid, in-depth and constructive discussions regarding trade and will meet in person in the week ahead to continue their discussions.
• Dutch Economy Minister Karremans said the Nexperia intervention was needed due to the former CEO’s actions, and he will speak with a Chinese government official about Nexperia within days. Furthermore, he said China and Europe both have an interest in solving problems around Nexperia, and commented that China has the wrong impression that the Netherlands and the US ‘teamed up’ on Nexperia.
• South Korea sees a higher chance of a trade deal with the US by the APEC summit.

NOTABLE HEADLINES

• Fed's Musalem (2025 voter) said on Friday that he could support a path with another cut if more risks to the jobs market emerge and inflation is contained, while he sees limited space before rate cuts would make policy accommodative. Musalem said the Fed should not be on a preset course and that it is important for the Fed to be cautious right now, as well as noted that it is premature to say what comes with FOMC meetings after October.
• US said on Friday that about 1,400 workers will be furloughed at the Nuclear Weapons Security Agency as of Monday due to the government shutdown.
• NVIDIA (NVIDIA) and TSMC (2330 TT) unveiled the first completed US-made wafers that will eventually become Blackwell chips, and which are said to be the single most important chips now being produced in America, according to Axios.
• Microsoft (MSFT) leaders are reportedly worried that meeting OpenAI's rapidly expanding computing demand could lead to overbuilding servers that might not generate a financial return, according to The Information. It was separately reported on Friday that new analysis of download trends and daily active users provided by Apptopia showed that ChatGPT’s mobile app growth may have hit its peak as estimates indicate that new user growth, measured by percentage changes in new global downloads, slowed after April, according to TechCrunch.

APAC TRADE

EQUITIES

• APAC stocks were higher amid tailwinds from recent trade-related rhetoric including US President Trump's comments on Friday that 100% tariffs are not sustainable and that he will be meeting with Chinese President Xi, while it was also reported that US Treasury Secretary Bessent and Chinese Vice Premier He engaged in candid, in-depth and constructive discussions regarding trade and will meet in person in the week ahead to continue their discussions.
• ASX 200 marginally gained amid strength in tech and industrials, although the index notably lagged behind regional peers amid weakness in the commodity-related sectors.
• Nikkei 225 surged to a fresh all-time high above the 49,000 level amid a reignition of the Takaichi trade with the LDP leader on track to become Japan's first female PM following an agreement to form a coalition with Japan's Innovation Party.
• Hang Seng and Shanghai Comp joined in on the positive mood with the Hong Kong benchmark led higher by strength in tech, and as participants digested the latest Chinese data releases, including GDP, Industrial Production and Retail Sales which either matched or topped forecasts, while the CPC Central Committee is also holding a four-day closed-door meeting through to Thursday to discuss the five-year development plan.
• US equity futures kept afloat following last Friday's positive momentum and amid some tariff-related optimism.
• European equity futures indicate a positive cash market open with Euro Stoxx 50 futures up 0.8% after the cash market finished with losses of 0.8% on Friday.

FX

• DXY traded rangebound with mild losses seen amid the mostly risk-on mood to start the week and following the recent softer tone from US President Trump on China after he noted on Friday that 100% tariffs are unsustainable and that he will be meeting with Chinese President Xi in two weeks. Apart from the trade-related headlines, there were few fresh catalysts from the US, with the Fed on a blackout period and with no end yet in sight regarding the government shutdown.
• EUR/USD bounced off Friday's trough but remained beneath the 1.1700 handle with gains capped as recent comments from ECB officials provided little to spur prices, and after S&P lowered France's sovereign credit rating to 'A+' from 'AA-'.
• GBP/USD eked out marginal gains amid mild strength in cyclical currencies, although the upside was limited after BoE Governor Bailey warned that Brexit would have a negative impact on the UK economy for the foreseeable future.
• USD/JPY edged marginally higher and briefly reclaimed the 151.00 status amid the positive risk tone and with Japan's LDP leader on course to win the PM vote in parliament tomorrow, but then gradually faded the moves and returned to flat territory with the pair also not helped by hawkish comments from BoJ's Takata.
• Antipodeans mildly benefitted from the positive risk appetite, and after a slew of Chinese data in which GDP, Industrial Production and Retail Sales either matched or topped forecasts.

FIXED INCOME

• 10yr UST futures were lacklustre after a recent slump, with demand hampered amid the risk-on mood after President Trump said 100% tariffs are not sustainable and he plans to meet Chinese President Xi in two weeks.
• Bund futures languished beneath the 130.00 level following Friday's pullback, while EU supply and German PPI loom.
• 10yr JGB futures retreated amid the strength in Japanese stocks and a resumption of the Takaichi trade with the LDP leader on track to become Japan's first female PM at tomorrow's parliamentary vote following an agreement between the LDP and Ishin to form a coalition.

COMMODITIES

• Crude futures were subdued after recently slipping to their lowest levels since early 2021 amid a supply glut, while geopolitical developments, including a violation of the Gaza ceasefire and a Ukrainian drone strike on a major gas processing plant in southern Russia, did little to spur prices.
• US President Trump said India will continue to pay massive tariffs if they don't restrict Russian oil purchases, while he added that Indian PM Modi told him 'He's not going to be doing the Russian oil thing'.
• Ukrainian drones struck the Orenburg plant, which is a major gas processing plant in southern Russia, forcing it to suspend its intake of gas from Kazakhstan, according to AP.
• Spot gold was choppy but off last Friday's lows after finding support around the USD 4,200/oz level.
• Copper futures gained amid the positive risk appetite and as participants digested the latest Chinese GDP and activity data, in which the key figures either matched or topped forecasts.

CRYPTO

• Bitcoin climbed overnight and eventually reclaimed the USD 110k status.

NOTABLE ASIA-PAC HEADLINES

• Chinese Loan Prime Rate 1Y (Oct) 3.00% vs. Exp. 3.00% (Prev. 3.00%)
• Chinese Loan Prime Rate 5Y (Oct) 3.50% vs. Exp. 3.50% (Prev. 3.50%)
• PBoC Governor Pan said on Friday that the Chinese economy remains on track with positive signs, and noted that prices remain stable with Core CPI picking up, while he also said that monetary policy will remain appropriately loose.
• Chinese tech giants paused stablecoin plans after Beijing raised concerns about the rise of currencies controlled by the private sector, according to FT.
• Japan’s LDP and the Japan Innovation Party agreed to form a coalition government. It was separately reported that Japan’s Innovation Party (Ishin) is considering staying out of the Cabinet and cooperating from outside, while Ishin party leader Yoshimura is to meet LDP leader Takaichi at 10:00BST/05:00EDT to finalise the coalition agreement.
• BoJ's Takata said monetary policy remains accommodative even as the achievement of the inflation target is in sight and the initial fear over the impact of tariffs has diminished, while he added they must be mindful of the risk Japan may see inflation overshoot expectations. Takata stated that the BoJ must communicate with markets on the assumption inflation target has been roughly achieved and they need to discuss monetary policy on assumption the price target has already been achieved, as well as noted that the BoJ needs to gradually shift policy in several stages, as Japan's economy is on the cusp of seeing a "true dawn".

DATA RECAP

• Chinese GDP QQ SA (Q3) 1.1% vs. Exp. 0.8% (Prev. 1.1%, Rev. 1.0%)
• Chinese GDP YY (Q3) 4.8% vs. Exp. 4.8% (Prev. 5.2%)
• Chinese Industrial Output YY (Sep) 6.5% vs. Exp. 5.0% (Prev. 5.2%)
• Chinese Retail Sales YY (Sep) 3.0% vs. Exp. 3.0% (Prev. 3.4%)
• Chinese Urban Investment (YTD) YY (Sep) -0.5% vs. Exp. 0.1% (Prev. 0.5%)
• Chinese House Prices MM (Sep) -0.4% (Prev. -0.3%)
• Chinese House Prices YY (Sep) -2.2% (Prev. -2.5%)
• New Zealand CPI QQ (Q3) 1.0% vs. Exp. 1.0% (Prev. 0.5%)
• New Zealand CPI YY (Q3) 3.0% vs. Exp. 3.0% (Prev. 2.7%)

GEOPOLITICS

MIDDLE EAST

• Israel’s Channel 12 reported that Israel was attacking Gaza, while the Israeli military said Hamas carried out multiple attacks against Israeli forces beyond the ‘yellow line’, violating the ceasefire. It was separately reported by Axios that US and Israeli sources said that Israel notified the US administration in advance of the strikes in Gaza, while the Israeli military said it began a wave of attacks against Hamas targets in southern Gaza, but later said it is resuming enforcement of the Gaza ceasefire after it was ‘violated’ by Hamas.
• Israeli government spokesperson said Israel has continued to fulfil its obligations to the ceasefire and noted that they are in a ceasefire but soldiers can act to defend themselves.
• Israeli PM Netanyahu instructed that the Rafah crossing will not be opened until further notice, while an opening will be considered based on whether Hamas returns deceased hostages and implements the agreed-upon framework. It was separately reported by Israeli media that Israel is to halt the supply of aid to Gaza until further notice, while an Israeli official said aid into Gaza was halted due to the truce breach by Hamas.
• US informed the guarantor nations of the peace agreement of credible reports indicating an imminent ceasefire violation by Hamas against the people of Gaza, according to the State Department, which stated that if Hamas proceed with this attack, measures will be taken to protect the people of Gaza and preserve the integrity of the ceasefire.
• A US official cited by Axios stated that Israel told the US it will open the crossing to Gaza on Monday morning, while the Palestinian embassy in Egypt earlier stated that the Rafah border crossing with Egypt is to reopen on Monday, which will allow Palestinians residing in Egypt to return to Gaza.
• Israeli PM’s office said Israel received the bodies of two hostages from the Red Cross in Gaza.
• Senior Hamas official Nazzal said on Friday that he cannot confirm whether Hamas will give up arms, and stated that disarmament is a broad issue that would have to include other armed Palestinian groups.
• Qatar’s Foreign Ministry said Pakistan and Afghanistan have agreed to an immediate ceasefire during talks mediated by Turkey and Qatar in Doha.

RUSSIA-UKRAINE

• US President Trump told Ukrainian President Zelensky in a tense meeting on Friday that he doesn’t intend to provide missiles, at least for now, according to Axios. It was separately reported that Trump urged Zelensky to accept Russian President Putin’s terms and said that Putin warned he would “destroy” Ukraine if it did not agree, according to FT.
• US President Trump said he did not discuss Ukraine ceding the Donbas region to Russia, and the region should stay as it is now, with Russia having some 78% of it.
• Russian President Putin reportedly demanded during a phone call with US President Trump that the territory of the Donetsk region must completely come under the control of the Russian army to end the war, but with Russia now ready to give up “parts” of the territories of Zaporizhzhia and Kherson in exchange for it, according to The Washington Post.
• Russia said its forces captured Pleshchivka in Ukraine’s Donetsk region, while Russian forces also captured Chunyshyne and Poltavka in eastern Ukraine, according to RIA.
• IAEA said work has begun to repair damaged off-site power lines to the Zaporizhzhia nuclear power plant after a four-week outage, following the establishment of local ceasefire zones to allow work to proceed.
• UK PM Starmer said the UK would continue to step up its support and would ensure Ukraine was in the strongest possible position, according to a Downing Street spokesperson.

OTHER

• China's Defence Ministry warned the US against perilous attempts to arm the region of Taiwan on Friday and said any move would cost the US a heavy price, according to Reuters.
• China said it found evidence of a US cyberattack on a Chinese state agency.
• US President Trump officials are quietly discussing the idea of a meeting with North Korea’s leader Kim during an upcoming Asia trip, according to CNN.
• US President Trump said on Friday that Spain has not been loyal to NATO and should be reprimanded.
• US President Trump said they destroyed a very large drug-carrying submarine that was navigating towards the US on a well-known narcotrafficking transit route, while US intelligence confirmed the vessel was loaded up with mostly fentanyl.
• US President Trump called Colombian President Petro a ‘drug dealer’ and announced the US would end “large-scale payments and subsidies”, according to The Sunday Times.
• US Republican Senator Graham said President Trump will be announcing major tariffs against Colombia, while President Trump confirmed Senator Graham's statement on Colombia tariffs and said he will announce more regarding this on Monday.

EU/UK

NOTABLE HEADLINES

• BoE Governor Bailey said Brexit is to have a negative impact on UK economic growth for the foreseeable future.
• BoE's Greene said on Friday that core and services inflation are going sideways and noted indications that the disinflation process is slowing, while she is concerned about second-round effects and stated that firms are more sensitive to upside inflation surprises. Furthermore, Green said policy is not meaningfully restrictive, as well as stated that they should slow down the rate-cutting cycle and should not cut every quarter, but added that the rate-cutting cycle is not over.
• UK Energy Secretary Miliband suggested the government is looking at the possibility of cutting the rate of VAT on energy bills, but said that he would not speculate ahead of the Chancellor's Budget in November.
• Three pension giants in the UK have made a fresh GBP 3bln wave of commitments to invest in rental homes, infrastructure and fast-growing companies, ahead of a government-backed meeting to discuss how they can work to boost investment, according to FT.
• ECB’s Nagel said the inflation story looks good and that inflation is pretty much on target for the next years.
• ECB's Rehn said on Friday that the European economy has shown remarkable resilience and that the Euro currency can only be as strong as the economy behind it.
• France’s wealthy are reportedly investing record amounts in Luxembourg-based annuities and shifting other funds to perceived havens such as Switzerland amid concerns about political turmoil at home, according to FT.
• S&P lowered France to 'A+' from 'AA-'; Outlook Stable, while it cited heightened risks to budgetary consolidation.

DATA RECAP

• UK House Price Rightmove MM (Oct) 0.30% (Prev. 0.40%)
• UK House Price Rightmove YY (Oct) -0.10% (Prev. -0.10%)