All eyes still on Gold as it heads back to $4,000/oz

EU mid-market update: All eyes still on gold as it heads back to $4,000/oz; Trump thinks summit with Putin under current conditions would be "waste of time".

Notes/observations

- Nothing positive from UK’s Sept inflation reading, showing a stubborn 3.8% YoY for headline and 4.7% for services. PPI Input data resumed, following elongated pause due to statistic agency issues and error rates, it had been stopped since Feb 2025. BOE and Govt continue to fight stagflation ahead of Autumn budget on Nov 26th. Latest leaks suggest Chancellor Reeves will target income taxes, while simultaneously trying to get household bills down. Brexit to be blamed.

- With volatility hitting gold, precious metals extended prior-session selloff after record highs. Liquidity and overbought conditions being cited.

- Notable EU earnings: European banks in focus. Barclays beats expectation and raised guidance, stock is up 4%; Unicredit beats estimates and affirms guidance but risks of Italian bank tax changes weighing on stock, down 2%; Heineken adjusts FY25 guidance lower.

- NHC on Tropical storm Melissa: Melissa is expected to produce heavy rainfall across portions of the Dominican Republic, Haiti, and Jamaica through this weekend; There is significant uncertainty in the track and intensity forecast of Melissa.

- Asia closed mixed with KOSPI outperforming +1.6%. EU indices -0.8% to +0.7%. US futures -0.1% to +0.1%. Gold -0.8%, DXY 0.0%; Commodity: Brent +1.5%, WTI +1.6%; Crypto: BTC +0.3%, ETH -0.3%.

Asia

- Japan Sept Trade Balance: -¥234.6B v +¥22.5Be; Exports Y/Y:4.2% v +4.4%; ; Imports Y/Y: 3.3% v 0.6%e.

- Japan PM Takaichi said to be planning to swiftly order the creation of an economic stimulus package to help combat rising prices, such as subsidies for electricity and gas bills.

- Japan PM Takaichi stated that did not see need to review BOJ-govt accord now; Determined to defend Japan's national interests through diplomacy and security; Now was not time to dissolve Parliament.

Global conflict/tensions

- North Korea fired short-range missiles for the first time since May.

Americas

- US federal government shutdown is entering day 22, with no sign of an imminent breakthrough.

Trade

- India, US trade deal likely 'soon', with cuts in tariffs to 15-16% (from current 50%.

- China’s commerce minister said to have accepted an “urgent” invitation to Brussels as the EU looked to unpick Beijing’s restrictions on rare earth mineral exports and defuse a row over Dutch-based chipmaker Nexperia.

- Japan PM Takaichi prepared to tell Trump that Japan will buy US soybeans, pickups and LNG - financial press.

Energy

- Weekly API Crude Oil Inventories: -3.0M v +7.4M prior.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 -0.23% at 571.96, FTSE +0.75% at 9,498.07, DAX -0.38% at 24,256.79, CAC-40 -0.60% at 8,209.47, IBEX-35 +0.25% at 15,816.12, FTSE MIB -0.59% at 42,396.00, SMI -0.38% at 12,581.73, S&P 500 Futures +0.04%].

Market Focal Points/Key Themes: European indices opened generally lower and remained downbeat as the session wore on; trader focus remains on trade talks between US and China; among better performing sectors are energy and real estate; sectors inclined to the downside include consumer discretionary and technology; oil & gas subsector supported on supply risk; Ipsen acquires ImCheck; earnings expected in the upcoming US session include Tesla, SAP, AT&T and IBM.

Equities

- Consumer discretionary: Heineken [HEIA.NL] +1.5% (earnings), Adidas [ADS.DE] -1.5% (prelim results; raises profit outlook), L'Oréal [OR.FR] -6.0% (earnings), Hermes [RMS.FR] -4.5% (earnings; Q4 trends), Thule [THULE.SE] +6.5% (earnings).

- Financials: Unicredit [UCG.IT] -2.5% (earnings), Barclays [BARC.UK] +4.0% (earnings; Motor Finance provision).

- Technology: ASML [ASML.NL] -0.5% (TSMC said to be developing its own EUV pellicle shields to lower defect rates and capital intensity for sub-2 nm production, a move that could extend the lifespan of current EUV tools, delay costly High-NA adoption), TeamViewer [TMV.DE] -17.5% (earnings; cut outlook; very cautious on US govt shutdown), Infineon [IFX.DE] -3.0% (Texas Instruments guidance).

Speakers

- Poland Fin Min Domanski stated that had no plans to amend budget. Hoped President did not veto bank tax bill.

- Japan Fin Min Katayama noted that PM Takaichi had instructed to proceed with fiscal reform, both in terms of spending and revenue. Too early to talk about the size of supplementary budget right now. Had no comments on FX rates.

- Indonesia Central Bank (BI) Gov Warjiyo pre-rate decision press conference noted that the domestic economic growth was still good, but needed to be pushed to reach capacity. IDR currency (Rupiah) was under control amid global uncertainty. Core inflation also seen remaining low due to anchored inflation expectations. To maintain FX stabilization measures and continue policy mix to boost growth, maintain stability.

- Indonesia Central Bank Policy Statement noted that the decision to keep policy steady was consistent with inflation outlook. CPI to remain within target until 2026.

- Japan shipbuilding industry companies said to announce ¥350B Capex.

Currencies/fixed income

- USD consolidated some of its recent strength but maintained a steady tone.

- GBP/USD was lower after UK Sept inflation data put BOE rate cuts back on the table. The probability of a Dec rate cut went from 50% to 80% as CPI came in lower against expectations.

- EUR/USD hovering around the 1.16 area in quiet trade.

- USD/JPY edging back towards the 151 neighborhood.

- 10-year German Bund yield at 2.55%, France 10-year Oat at 3.35% and 10-year Gilt yield at 4.40% 10-year Treasury yield: 3.96%.

Economic data

- (NL) Netherlands Sept House Price Index M/M: 0.0% v 0.5% prior; Y/Y: 7.0% v 7.9% prior.

- (UK) Sept CPI M/M: 0.0% v 0.2%e; Y/Y: 3.8% v 4.0%e.

- (UK) Sept CPI Core Y/Y: 3.5% v 3.7%e; CPI Services Y/Y: 4.7% v 4.9%e; CPIH Y/Y: 4.1% v 4.2%e.

- (UK) Sept RPI M/M: -0.4% v -0.2%e; Y/Y: 4.5% v 4.7%e; RPI-X (ex-mortgage interest payments) Y/Y: 4.4% v 4.4% prior; Retail Price Index: 406.1 v 407.2e.

- (UK) Sept PPI Input M/M: -0.1% v +0.2%e; Y/Y: 0.8% v 0.8%e.

- (UK) Sept PPI Output M/M: 0.0% v 0.2%; Y/Y: 3.4% v 3.6%e.

- (HU) Hungary Sept Unemployment Rate: 4.5% v 4.5%e.

- (ID) Indonesia Central Bank (BI) left the Bi Rate unchanged at 4.75% (not expected).

- (PL) Poland Sept Real Retail Sales M/M: -2.7% v -2.2%e; Y/Y: 6.4% v 7.1%e; Retail Sales (current prices) Y/Y: 6.6% v 7.2%e.

- (PL) Poland Oct Consumer Confidence: -10.9 v -9.5e.

- (ZA) South Africa Sept CPI M/M: 0.2% v 0.2%e; Y/Y: 3.4% v 3.4%e.

- (ZA) South Africa Sept CPI Core M/M: 03% v 0.2%e; Y/Y: 3.2% v 3.1%e.

- (UK) Aug ONS House Price Index Y/Y: 3.0% v 3.2% prior.

- (BE) Belgium Oct Consumer Confidence: 0 v -1 prior.

Fixed income issuance

- (DK) Denmark sold total DKK1.90B in 2027 and 2035 DGB Bonds.

- (SE) Sweden sold total SEK6.0B vs. SEK6.0B indicated in 2031 and 2035 Bonds.

- (GR) Greece Debt Agency (PDMA) sold €600M vs. €500M indicated in 6-month Bills.

Looking ahead

- (AR) Argentina Sept UTDT Leading Indicator: No est v -4.7% prior.

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

- 05:30 (DE)) Germany to sell €3.0B in 2.5% Nov 2032 Bunds.

- 05:30 (ZA) South Africa announces details of next bond auction (held on Tuesdays).

- 06:00 (IE) Ireland Sept PPI M/M: No est v 0.0% prior; Y/Y: No est v -3.0% prior.

- 06:00 (CZ) Czech Republic to sell combined CZK8.0B in 2034, 2036 and 2037 bonds.

- 06:00 (RU) Russia to sell OFZ Bonds.

- 07:00 (US) MBA Mortgage Applications w/e Oct 17th: No est v -1.8% prior.

- 07:00 (UK) Weekly PM Question time in House.

- 07:00 (ES) ECB’s De Guindos (Spain).

- 08:00 (PL) Poland Sept M3 Money Supply M/M: 0.8%e v 0.8% prior; Y/Y: 11.2%e v 11.1% prior.

- 08:00 (MX) Mexico Aug Gold Production: No est v 6.0K prior; Silver Production: No est v K prior; Copper Production: No est v K prior.

- 08:00 (MX) Mexico Aug IGEA Economic Activity Index (Monthly GDP) M/M: +0.2%e v -1.1% prior; Y/Y: -0.5%e v -0.9% prior.

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

- 08:25 (EU) ECB chief Lagarde.

- 10:30 (US) Weekly DOE Oil Inventories.

- 11:30 (US) Treasury to sell 17-Week Bills.

- 12:00 (RU) Russia Sept PPI M/M: No est v 1.1% prior; Y/Y: No est v -0.4% prior.

- 12:00 (CA) Canada to sell 10-year Notes.

- 13:00 (US) Treasury sell 20-Year Bond Reopening.

- 15:00 (AR) Argentina Aug Economic Activity Index (Monthly GDP) M/M: No est v -0.1% prior; Y/Y: 2.3%e v 2.9% prior.

- 21:00 (CN) China Sept Swift Global Payments (CNY): No est v 2.9% prior.

- (KR) Bank of Korea (BOK) Interest Rate Decision: Expected to leave Base Rate unchanged at 2.50%.