Quiet session amid US and Japan holidays – Boeing cuts jobs

EU mid-market update: Quiet session amid US and Japan holidays; Boeing cuts jobs; Israel ready to launch response; SpaceX rocket booster catch stuns world.

Notes/observations

- China MOF’s telegraphed meeting on Saturday sees China target room in budget to raise debt and increase deficit, including issuing special treasury bonds; Shanghai closed up 2%, but China-related names in Europe trade mostly lower. Analysts expect specific numbers of China stimulus could be unveiled after the NPC Standing Committee's approval as early as late Oct or at China's annual Central Economic Work Conference in late Nov or early Dec.

- US and Canada on holiday. NYSE remains open while US bond trading closed.

- UK gambling sector heavily down on speculation of being a target for increased taxes from govt. Remaining on UK front, PM Starmer to speak later at Investment Summit; Key UK macro data later in week for employment, inflation and retail sales.

- Crude trades lower as Israel says ready to strike after having narrowed targets to Iranian military and energy infrastructure. Move lower in oil said to be as targets are less sensitive than initially feared (e.g. not nuclear).

- Boeing trades lower few percent premarket after disclosing 17K of job cuts and pre-announcement of Q3 results.

- Continental EU bond yields lower and UK Gilt yields higher.

- Asia closed mixed with Shanghai outperforming +2.1%. EU indices are -0.2% to +0.4%. US futures are -0.1% to +0.1%. Gold +0.1%, DXY +0.1%; Commodity: Brent -1.9%, WTI -2.0%; Crypto: BTC +2.7%, ETH +2.5%.

Asia

- China Sept CPI YoY: 0.4% v 0.6%e; PPI YoY:-2.8% v -2.6%e.

- Singapore Q3 Advance GDP Q/Q: 2.1% v 2.0%e; Y/Y: 4.1% v 3.8%e.

- Singapore Monetary Authority (MAS) Quarterly Monetary Policy Statement maintained its prevailing slope of policy band (5th straight pause under the current tightening cycle).

- China Finance Ministry stated that saw room in budget to raise debt and increase deficit; To issue special treasury bonds to replenish the capital of state banks and significantly increase govt debt; To allow special local bonds for unsold home purchases; To expand scope for usage of local govt debt. China to roll out basket of policy measures to support economy; Studying more counter-cyclical measures (**Note: analysts had expected China Ministry of Finance and NDRC to follow up with fiscal stimulus measures in coming weeks, which might include but not limited to potential issuance of special government bonds to support consumption and the property sector).

Global conflict/tensions

- Israel said to have narrowed down its targets for strike on Iran which US officials described as Iranian military and energy infrastructure.

- US sending THAAD anti-missiles systems to Israel to help increase its defenses against Iran; US troops to operate THAAD.

Europe

- Fitch affirmed France sovereign rating at AA-; Outlook revised to Negative from Stable.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 -0.05% at 521.72, FTSE -0.05% at 8,249.15, DAX +0.30% at 19,394.15, CAC-40 -0.27% at 7,557.22, IBEX-35 +0.13% at 11,734.95, FTSE MIB +0.17% at 34,368.00, SMI +0.36% at 12,199.03, S&P 500 Futures +0.10%].

Market Focal Points/Key Themes: European indices opened mixed but took on a positive bias in the early hours of trading; among sectors trending higher are technology and financials; lagging sectors include consumer discretionary and materials; mining sector under pressure amidst general weakness in commodities; JOST Werke acquires Hyva; majority holder of Mulberry rejects revised offer from Frasers; Ti Fluid Systems sets conditions for ABC Technologies takeover; the US is on holiday though stock markets are open; LVMH expected to report in the European afternoon session.

Equities

- Consumer discretionary: LVMH [MC.FR] -3.0% (investors digest new China stimulus comments), Mulberry [MUL.UK] +12.0% (receives increased offer), Entain [ENT.UK] -14.0%, Evoke [EVOK.UK] -14.0% (UK press report that Chancellor (Fin Min) Reeves mulls “tax raid of up to £3B” on domestic gambling sector), Pagegroup [PAGE.UK] -0.5% (trading update; trims outlook), EasyJet [EZJ.UK] -0.5% (new CFO).

- Energy: DNO [DNO.NO] -1.5% (Q3 production update).

- Financials: Caixabank [CABK.ES] +1.5% (reportedly nears sale of majority stake in Saba to Belgian firm Interparking), Ashmore Group [ASHM.UK] +6.0% (trading update).

- Healthcare: GSK [GSK.UK] +1.5% (positive phase III results from ANCHOR trials), Nicox [COX.FR] +10.5% (financing), Transgene [TNG.FR] -14.0% (Phase II TG4001 top line missed primary endpoint).

- Industrials: Airbus [AIR.FR] +1.0% (Boeing cutting jobs; delays 777x deliveries).

Speakers

- Germany Economic Ministry noted that current economic indicators pointed to continued weakness in domestic economy in the past quarter.

Currencies/fixed income

- FX price action was subdued with little economic release seen in the session.

- USD was steady and holding on to recent gains that stemmed from market participants scaling back expectations for Fed rate cuts. Dealers also noted that the lack of specific news from China over the weekend on prospects for fiscal stimulus was dampening risk appetite and aiding the greenback.

- EUR/USD at 1.0930 area by mid-session with focus on Thursday ECB rate decision. Central bank divergence between ECB and Fed weighing upon the Euro as dealers see cut at every meeting through spring.

- GBP/USD at 1.3060 with focus on some upcoming UK data with jobs figures on Tuesday, inflation data on Wednesday and retail sales on Friday.

- USD/JPY staying below the 150 level with 152/155 seen as key resistance.

Economic data

- (SE) Sweden Oct Swedish Housing Price Indicator: 49 v 47 prior.

- (FI) Finland Sept CPI M/M: +0.3% v -0.5% prior; Y/Y: 0.8% v 1.2% prior.

- (IN) India Sept Wholesale Prices Y/Y: 1.8% v 2.0%e.

- (CH) Swiss Sept Producer & Import Prices M/M: -0.1% v +0.2% prior; Y/Y: -1.3% v -1.2% prior.

- (CZ) Czech Aug Current Account Balance (CZK): +18.5B v -5.2Be.

- (CH) Swiss Weekly Total Sight Deposits (CHF): 467.1B v 471.4B prior; Domestic Sight Deposits: 459.4B v 460.3B prior.

- (CN) China Sept Trade Balance: $81.7B v $90.5Be v $91.0B prior; Exports Y/Y: 2.4% v 6.0%e; Imports Y/Y: 0.3% v 0.8%e.

- China Sept YTD New Yuan Loans (CNY): 16.02T v 16.368Te.

- China Sept YTD Aggregate Financing (CNY): 25.66T25.475Te v 21.900T prior.

- China Sept M2 Money Supply Y/Y: 6.8% v 6.4%e; M1 Money Supply Y/Y: -7.4% v -7.2%e; M0 Money Supply Y/Y: 11.5% v 12.2% prior.

Fixed income issuance

- None seen.

Looking ahead

- 05:25 (EU) Daily ECB Liquidity Stats.

- 05:30 (DE) Germany to sell €3.0B in 12-month BuBills.

- 05:30 (ZA) South Africa announces details of upcoming I/L bond sale (held on Fridays).

- 06:00 (IL) Israel Sept Trade Balance: No est v -$2.1B prior.

- 06:00 (IL) Israel to sell combined ILS3.85B in 2027, 2028, 2029, 2033, 2034, 2035 and 2042 bonds.

- 06:00 (NO) Norway announcement on upcoming bond issuance (held on Wed).

- 07:00 (IS) Iceland to sell 3-month and 6-month Bills.

- 07:25 (BR) Brazil Central Bank Weekly Economists Survey.

- 07:30 (CL) Chile Central Bank Traders Survey.

- 08:00 (IN) India Sept CPI Y/Y: 5.1%e v 3.7% prior.

- 08:00 (PL) Poland Aug Current Account Balance: -€0.9Be v -€1.5B prior; Trade Balance: -€1.3Be v -€1.5B prior; Exports: €25.2Be v €27.0B prior; Imports: €26.4Be v €28.5B prior.

- 08:00 (BR) Brazil Aug Economic Activity Index (Monthly GDP) M/M: +0.1%e v -0.4% prior; Y/Y: 2.9%e v 5.3% prior.

- 08:00 (MX) Mexico Sept Consumer Confidence: 47.6e v 47.6 prior.

- 08:00 (UK) Daily Baltic Dry Bulk Index.

- 08:00 (IN) India announces details of upcoming bond sale (held on Fridays).

- 08:00 (ES) Spain Debt Agency (Tesoro) size announcement on upcoming issuance.

- 09:00 (FR) France Debt Agency (AFT) to sell €6.7-8.3B in 3-month, 6-month and 12-month bills.

- 09:00 (RU) Russia Aug Trade Balance: No est v $8.7B prior; Exports: No est v $33.7B prior; Imports: No est v $25.0B prior.

- 09:45 (UK) BOE Gilt sale operation.

- 11:00 (US) Sept NY Fed 1-Yr Inflation Expectations: No est v 3.0% prior.

- 09:00 (US) Fed’s Kashkari.

- 15:00 (US) Fed’s Waller.

- 17:00 (KR) South Korea Sept Import Price Index M/M: No est v -3.5% prior; Y/Y: No est v 1.8% prior; Export Price Index M/M: No est v -2.6% prior; Y/Y: No est v 5.7% prior.

- 17:00 (US) Fed’s Kashkari.

- 18:00 (NZ) RBNZ Dep Gov Hawkesby on Financial Stability.

- 19:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 82.0 prior.