• US President Trump said he will discuss a lot of things with Chinese President Xi in two weeks; however, he added that the meeting might not happen
• US futures are marginally firmer, while European futures point to a slightly lower cash open
• DXY softened overnight, EUR and GBP lifted modestly off Tuesday's trough, USD/JPY contained and back below 152.00
• Fixed benchmarks rangebound into supply
• Crude underpinned by a Russian strike on Ukrainian energy infrastructure, XAU continued to falter to the USD 4k/oz mark but has since bounced
• Looking ahead, highlights include UK CPI (Sep), CCP 4th Plenum (20th-23rd), BoJ SLOOS, Speakers including ECB’s de Guindos, Lagarde & Fed's Barr, Supply from Germany & US, Earnings from SAP, Barclays, Akzo Nobel, Tesla, IBM, Kinder Morgan, Alcoa, Lam Research, GE Vernova, Hilton, AT&T & Thermo Fisher.
• Click for the Newsquawk Week Ahead.

US TRADE

EQUITIES

• US stocks were mixed with the SPX and NDX ultimately closing little changed after a choppy session, while the DJI was bid and RUT underperformed. Sectors were also varied amid a flurry of earnings, with Consumer Discretionary and Industrials the outperformers following strong earnings from General Motors (GM), boosting auto names, while Industrials benefitted from upside in 3M (MMM) and RTX (RTX), albeit Lockheed Martin (LMT) and Northrop Grumman (NOC) earnings disappointed. Conversely, Utilities, Communications, and Materials lagged, with the latter hit by tumbling precious metal prices as Gold suffered its largest absolute drop on record, which fell from near ATH levels earlier in the session at USD 4,375/oz, with a fall to a low of USD 4,087/oz with profit taking, easing credit concerns, and a more friendly tone towards China from Trump, all cited for the move.
• SPX -0.01% at 6,735, NDX -0.06% at 25,127, DJI +0.47% at 46,925, RUT -0.52% at 2,487.
• Click here for a detailed summary.

TARIFFS/TRADE

• US President Trump said he will discuss a lot of things with Chinese President Xi in two weeks and reiterated that they are going to do well in that negotiation. However, he also commented that maybe the meeting with Chinese President Xi won't happen.
• US President Trump reiterated that the November 1st tariffs on China will be about 155% and that higher tariffs on China won't be sustainable for them, while Trump also said he spoke with India's PM Modi on Tuesday and talked about trade.
• US CBP processed nearly 24mln packages since the US ended the de minimis exemption, which would have received duty-free treatment.
• US soy industry groups noted that there are no new US soybean sales to China and nothing is expected to be loaded in the coming weeks.
• EU Trade Commissioner Sefcovic said he held a video call with his Chinese counterpart and invited the Chinese authorities to Brussels in the coming days, which they accepted. Sefcovic said the scale of China's export control, scaled up since April, is unjustified and harmful, while they agreed to intensify contacts at all levels, and he noted that a prompt resolution of rare earth restrictions is essential. A separate report also noted that China and the EU are set to hold export control talks in Brussels.
• Germany and France are supporting a push to discuss China’s increasingly restrictive trade measures at an EU leaders’ summit in Brussels on Thursday, according to Bloomberg citing sources.
• China reportedly eyes a 3-way currency swap with Japan and South Korea amid Trump’s tariff war, as Beijing seeks to strengthen regional financial ties and boost yuan use as US trade pressures weigh on East Asian economies, according to SCMP citing a source.
• South Korean chief presidential policy aide said South Korea and the US stand apart on a couple of matters in tariff talks.
• South Korea Minister for Trade Yeo expressed concern in a call with China's Li Chenggang regarding Beijing's shipbuilding curbs, while he asked Li to swiftly lift sanctions on South Korea shipbuilder Hanwha Ocean and discussed China’s rare earths export restrictions.
• India and the US are closing in on a long-pending trade deal that could slash current tariffs from Indian exports to between 15-16% from 50%, according to Mint citing three people aware of the matter.

NOTABLE HEADLINES

• US President Trump said he won't meet with Democratic leaders unless the government is reopened.
• US Senate Majority Leader Thune is hopeful this will be the week the shutdown ends and is planning another vote on the stopgap bill on Wednesday.
• US President Trump's administration plans to release over USD 3bln in aid to US farmers previously frozen due to government shutdown, according to WSJ.
• US has offered energy companies access to nuclear waste that they can convert into fuel for advanced reactors in an attempt to break Russia’s stranglehold over uranium supply chains, according to FT

APAC TRADE

EQUITIES

• APAC stocks were mostly subdued following the mixed handover from the US, where participants digested a mixed bag of earnings releases, and precious metals slumped, with a historic drop seen in gold following the recent record-setting rally.
• ASX 200 retreated with heavy losses in the mining sector after gold prices fell by the most since 2013 and which was its largest one-day dollar value drop on record.
• Nikkei 225 briefly dipped beneath the 49,000 level with early pressure seen following mixed trade data, although the index gradually pared its early losses as participants also reflected on the new Takaichi-led government, with the PM instructing the cabinet to compile a package of steps to cushion the blow from the rising cost of living.
• Hang Seng and Shanghai Comp were subdued following a slew of recent trade-related rhetoric, including from US President Trump, who reiterated 155% tariffs on China from November 1st and that he will meet with Chinese President Xi in two weeks, but then also commented that maybe that meeting won't happen.
• US equity futures were rangebound following the prior day's indecision on Wall St and mixed earnings results.
• European equity futures indicate a lower cash market open with Euro Stoxx 50 futures down 0.4% after the cash market closed with gains of 0.1% on Tuesday.

FX

• DXY marginally softened overnight following the prior day's advances and with little fresh catalysts stateside. Nonetheless, there had been some optimism regarding the shutdown with Senate Majority Leader Thune hopeful that the shutdown would end this week, while Senate Minority Leader Schumer and House Minority Leader Jeffries reached out to President Trump to sit down and negotiate. However, President Trump has since dampened the hopes after he stated he won't meet with Democratic leaders unless the government is reopened.
• EUR/USD attempted to nurse some of the prior day's losses after recovering from a brief dip beneath the 1.1600 level.
• GBP/USD moved off the prior day's trough but with upside capped ahead of UK CPI data, while it was also reported that UK Chancellor Reeves has vowed Budget measures aimed at curbing inflation and easing the cost of living, which is said to give space for further cuts in the coming months.
• USD/JPY was contained after a recent failure to sustain a brief foray into 152.00 territory, with early downside seen amid the mostly downbeat risk appetite, while mixed trade data from Japan had little effect on price action.
• Antipodeans were kept afloat, albeit within tight parameters in the absence of any pertinent data releases.
• PBoC set USD/CNY mid-point at 7.0954 vs exp. 7.1225 (Prev. 7.0930)

FIXED INCOME

• 10yr UST futures were uneventful amid light pertinent catalysts heading into a 20yr auction stateside.
• Bund futures traded little changed with near-term support seen around the 130.00 level and upside capped ahead of a Bund issuance.
• 10yr JGB futures recovered from an early wobble and returned to flat territory with little impact seen following mixed trade data and with markets also unmoved by comments from Japan's new cabinet members, including Minister for Economic Security Kiuchi, who said it is important that the government and the BoJ continue to cooperate and carry out responsible macroeconomic policies.

COMMODITIES

• Crude futures eventually gained following the prior day's whipsawing and amid a Russian strike which damaged oil and gas industry facilities in Ukraine's Poltava region, while there was little reaction to the weekly private sector energy inventory, which showed a surprise draw in headline crude stockpiles.
• US Private Inventory Data (bbls): Crude -3.0mln (exp. +1.2mln), Distillate -1.0mln (exp. -1.9mln), Gasoline -0.2mln (exp. -0.8mln).
• US is to buy 1mln bbls for the SPR with oil for delivery in December 2025 and January 2026.
• Russian overnight attack on Ukraine's Poltava region damaged oil and gas industry facilities.
• Spot gold initially extended on the prior day's declines after it pulled back from all-time highs and suffered the largest percentage decline since 2013, with the slump attributed to profit taking, easing credit concerns, and a more friendly tone towards China from Trump. However, prices then staged a recovery after support held near the USD 4,000/oz level.
• Copper futures were lacklustre amid the mostly downbeat mood in the region and as trade uncertainty lingered.

CRYPTO

• Bitcoin heads into the European morning relatively flat after a choppy performance above the USD 108k level.
• Japan weighs allowing banking groups to trade cryptocurrencies, according to Nikkei.

NOTABLE ASIA-PAC HEADLINES

• Japanese PM Takaichi is preparing economic stimulus expected to exceed last year's JPY 13.9tln, with the package to be built around three main pillars which are measures to counter inflation, investment in growth industries and national security, according to sources cited by Reuters.
• Japanese PM Takaichi is to meet with US President Trump on October 28th and will discuss national defence. It was later reported that Japanese Chief Cabinet Secretary Kihara said US President Trump is to visit Japan from October 27th to 29th and is to meet Japan’s Emperor and PM Takaichi during the visit.
• Japanese Minister for Economic Security Kiuchi says it is important that the government and the BoJ continue to cooperate and carry out responsible macroeconomic policies, while he hopes the BoJ will closely coordinate with the government to achieve the 2% inflation target, and stated that the economy needs to be supported until strong real wage growth is achieved.

DATA RECAP

• Japanese Trade Balance Total Yen (Sep) -234.6B vs. Exp. 22.2B (Prev. -242.8B)
• Japanese Exports YY (Sep) 4.2% vs. Exp. 4.6% (Prev. -0.1%)
• Japanese Imports YY (Sep) 3.3% vs. Exp. 0.6% (Prev. -5.2%)

GEOPOLITICS

MIDDLE EAST

• US Secretary of State Rubio plans to travel to Israel later this week or over the weekend.

RUSSIA-UKRAINE

• Ukrainian President Zelensky said Russia is doing everything to reject a diplomatic way to end the war and the postponement of the US decision on Tomahawks made Russia less interested in diplomacy.
• Ukrainian armed forces struck a chemical plant in southern Russia's Bryansk region.
• Russia obtained security guarantees from Ukraine to restore power to the Zaporizhia nuclear power plant, according to RIA.
• Europe and Ukraine are said to ready a 12-point plan to end Russia’s war, according to Bloomberg.
• US President Trump said he has not made a determination yet regarding a meeting with Russian President Putin and doesn't want to have a wasted meeting, while he still sees a chance for a Russia-Ukraine ceasefire.
• US Secretary of State Rubio and Russian Foreign Minister Lavrov had a productive call, while there are no plans for a Trump-Putin meeting in the immediate future, according to a senior White House official.
• Russia's Special Economic Envoy said 'preparations continue' for a Trump-Putin meeting.

OTHER NEWS

• North Korea fired a missile, which the South Korean military said was a ballistic missile, while Japanese PM Takaichi later confirmed there was no damage to Japan's exclusive economic zone and waters from the North Korean missile.
• US is reportedly trying to drive a wedge between Argentina and China with the Trump administration pushing officials in Argentina to limit China’s influence over the distressed South American nation, according to WSJ.
• China's Defence Ministry said it is strongly dissatisfied with Australia's statement about military aircraft around the Paracel Islands, while it added that organised troops are to resolutely block and drive away Australian military aircraft that 'invaded' China's airspace.

EU/UK

NOTABLE HEADLINES

• UK Chancellor Reeves has vowed to smooth the path to further BoE interest rate cuts with Budget measures aimed at curbing inflation and easing the cost of living, according to FT. Reeves said she was determined to get a grip on borrowing and would take steps in her Budget to cut household bills, creating space for further BoE rate cuts in the coming months.
• UK Chancellor Reeves targets tax partnerships in crackdown on UK’s wealthy with Reeves preparing a crackdown on lawyers, accountants, doctors and other professionals who use tax partnerships, according to FT.
• Many EU leaders, including German Chancellor Merz, French President Macron and Italian PM Meloni, called for the EU to review, reduce and restrain legislation to reduce the burden on business, according to Reuters citing a letter. Furthermore, the leaders called for the modernisation of EU competition law and acceleration of merger control and state aid procedures at the EU level.