Trump and Xi meet in Korea and seemed positive overall

EU mid-market update: Fed's Dec cut now seem less probable; Trump and Xi meet in Korea and seemed positive overall; EU data plunge does little to inspire price action; Hyperscalers' FY26 Capex beat estimates.

Notes/observations

- President Trump described his meeting with Xi Jinping as “amazing, 12 on 1-10 scale” and said the US and China “agreed on many things, with others, even of high importance, being very close to resolved”; US to reduce tariffs from 57% to 47%, resume large-scale Chinese purchases of American soybeans, energy, and other farm products, and lift restrictions on rare earth exports. He announced that China would help curb fentanyl exports and might buy US oil and gas from Alaska, calling the talks a “historic” breakthrough that will “deliver prosperity and security to millions of Americans.”

- Trump added that he will visit China in April 2026 and that Xi will later visit the US, while noting they did not discuss Taiwan but did touch on Ukraine and nuclear testing parity.

- Microsoft, Google, and Meta all signaled an acceleration of AI-driven CapEx into FY26, marking a synchronized infrastructure arms race across hyperscalers. Microsoft’s CapEx will rise beyond FY2025 levels, with over half on short-lived GPU and CPU assets, as it doubles data center capacity within two years and builds the 2 GW Fairwater site in Wisconsin. Google foresees another large Capex jump in 2026 for TPUs, GPUs, and data centers, while Meta is front-loading compute for potential superintelligence, committing to “notably larger” 2026 CapEx and expanded data-center and AI infrastructure.

- BOJ Governor Ueda after decision to hold rates unchanged said there is no preset timeline for the next rate hike, stressing that policy decisions will depend on early wage data and the broader economic impact of US tariffs rather than short-term market moves or elections. He also emphasized close coordination with the government and patience before tightening further.

- Elsewhere, OpenAI reportedly plans to raise at least $60B; Prepares for IPO at a potential valuation of ~$1T; Considers filing with securities regulators as soon as H2 2026 with actual listing in 2027; Also, Samsung expects the semiconductor market to stay robust through H1 2026 on sustained AI CapEx momentum, with DRAM and NAND prices rising, and HBM4 nearing mass production, while projecting 2026 memory demand to exceed supply.

- Asia closed mixed with Shanghai composite underperforming -0.7%. EU indices -1.2% to +0.1%. US futures -0.3% to -0.1%. Gold +1.9%, DXY 0.0%; Commodity: Brent -0.7%, WTI -0.6%; Crypto: BTC -2.5%, ETH -2.5%.

Asia

- New Zealand Oct ANZ Business Confidence: 58.1t v 49.6 prior.

- Australia Q3 Export Price Index Q/Q: -0.9% v -4.5% prior; Import Price Index Q/Q: -0.4% v -0.8% prior.

- Bank of Japan (BOJ) left Policy Rate unchanged at 0.50% (as expected) for its 6th straight pause under the current phase of its tightening cycle.

- Former BOJ Gov Kuroda sees 'Yen rally' toward 120-130 per dollar.

- China President Xi noted US and China relations have maintained stability; confirms trade teams have reached basis consensus.

Americas

- FOMC cut Target Range by 25bps to 3.75-4.00% (as expected). Vote was 10-2 - Miran sought 50 bps cut again, and Schmid favored no cut. To stop shrinking the balance sheet on Dec 1st. Uncertainty about the economic outlook remains elevated and to carefully assess incoming data, the evolving outlook, and the balance of risks.

- Fed Chair Powell post rate decision press conference noted that available data suggested the outlook had not changed much, and that the economy was expanding moderately; Near term inflation expectations had moved up; Higher tariffs were pushing up some goods prices. There was no risk-free path; Must take a balanced approach.

Trade

- President Trump commented after his meeting with China President Xi that he thought meeting was 'amazing' and 'outstanding'; 'a lot' of decisions were made; would be providing conclusions on very important things; confirmed soybean purchases to start 'immediately'; Confirmed agreed to reduce China fentanyl tariff to 10%; No 'roadblock' on rare earths, 'all' of the rare earths had been settled; Says 'we have a deal'; To visit China in Apr [2026].

- USTR Greer: Postponing shipbuilding probe; variety of tariffs still remain on China.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 -0.36% at 573.34, FTSE -0.52% at 9,705.20, DAX -0.12% at 24,094.37, CAC-40 -0.43% at 8,165.98, IBEX-35 -1.15% at 15,958.80, FTSE MIB -0.73% at 42,928.00, SMI +0.07% at 12,310.77, S&P 500 Futures -0.10%].

Market focal points/key themes: European indices opened mixed and failed to gain direction in the early part of the session; markets processing hawkish impression of FOMC decision; better performing sectors include technology and health care; underperforming sectors include energy and consumer discretionary; TT Electronics to be acquired by Cicor Technologies; Vodafone acquires Skaylink; focus on ECB rate decision later in the day; earnings expected in the upcoming US session include Apple, Amazon, Eli Lilly and MasterCard.

Equities

- Consumer discretionary: Carlsberg [CARLB.DK] -1.5% (earnings).

- Energy: Shell [SHEL.UK] -1.0% (earnings; buyback; oil oversupply comment), TotalEnergies [TTE.FR] -2.0% (earnings).

- Materials: Covestro [1COV.DE] +0.5% (earnings; cut outlook).

- Industrials: AB InBev [ABI.BE] +0.5% (earnings; buyback), Schneider Electric [SU.FR] -2.0% (earnings), Stellantis [STLA.NL] -5.0% (earnings), Volkswagen [VOW3.DE] -0.5% (earnings).

- Technology: ASML [ASML.NL] +1.5% (Samsung results; Trump-Xi deal; Google/Microsoft 2026 Capex color).

- Telecom: WPP [WPP.UK] -11.5% (trading update; cut outlook; strategic review), Prysmian [PRY..IT] -4.5% (earnings).

Speakers

- BOJ Gov Ueda post rate decision press conference stated that did not think there was a risk for falling behind the curve. BOJ had no preset idea about timing of next rate hike. Want to check data a bit more.

- China President Xi commented about his meeting with Trump. Stated trade should not be point of conflict for China-US ties; China and US need to refine and follow-up works as soon as possible; Says willing to work with Trump and that dialogue is better than confrontation.

- China Commerce Ministry (MOFCOM) confirmed to pause export control measures announced on Oct 9th for one year; Suspend shipbuilding measures against US for a year; To adjust some countermeasures.

- Taiwan Central Bank (CBC) Sept Minutes: noted that its updated Staff Projections showed no room for rate cuts. Should closely monitor inflation expectations.

Currencies/fixed income

- USD steady following the Wed Fed rate cut. Markets currently see 70% chance of a 25bps cut continuing at the Fed’s Dec policy meeting and over 5-% chance of a pause at the Jan meeting.

- EUR/USD holding above the 1.16 level as the various EU GDP and inflation data did little to promote fresh position taking. Focus on ECB rate decision and press conference later today. ECB members have been quite vocal that current level of rates was adequate for the foreseen future.

- USD/JPY moved higher as BOJ Gov Ueda fluttered some dovish feathers during his press conference. Ueda noted that BOJ had no preset idea about timing of next rate hike and wanted to check data a bit more.

- 10-year German Bund yield at 2.63%, France 10-year Oat at 3.42% and 10-year Gilt yield at 4.42% 10-year Treasury yield: 4.07%.

Economic data

- (NL) Netherlands Oct Producer Confidence: -0.8 v -1.6 prior.

- (FI) Finland Sept GDP Indicator Y/Y: -0.2% v -0.7% prior.

- (FI) Finland Q3 GDP Indicator Q/Q:-0.1 % v 0.0% prior.

- (FR) France Q3 Preliminary GDP Q/Q% v : 0.2%e; Y/Y: % v 0.6%e.

- (FR) France Sept Consumer Spending M/M: % v 0.0%e; Y/Y:% v -0.8% prior.

- (SE) Sweden Sept Retail Sales M/M: % v -0.3%e; Y/Y: % v 4.4% prior.

- (SE) Sweden Aug Non-Manual Workers’ Wages Y/Y:% v 3.1% prior.

- (FI) Finland Aug Final Trade Balance: -€0.3B v -€0.7B prelim.

- (DK) Denmark Sept Unemployment Rate: % v 2.6% prior; Gross Unemployment Rate:% v 2.9% prior.

- (TR) Turkey Oct Economic Confidence: 98.2 v 98 prior.

- (HU) Hungary Q3 Preliminary GDP Q/Q: 0.0% v 0.2%e; Y/Y: 0.6% v 1.0%e.

- (ES) Spain Oct Preliminary CPI M/M: 0.7% v 0.5%e; Y/Y: 3.0% v 2.9%e; CPI Core Y/Y: 2.5% v 2.4%e.

- (ES) Spain Oct Preliminary CPI EU Harmonized M/M:0.5 % v 0.3%e; Y/Y: 3.2% v 3.0%e.

- (CH) Swiss Oct KOF Leading Indicator: # 98.4e.

- (SE) Sweden Oct Consumer Confidence: 96.8 v 94.0e; Manufacturing Confidence : 100.2 v 99.4 prior; Economic Tendency Survey: 100.8 v 98.5e.

- (AT) Austria Q3 GDP Q/Q: +0.1% v -0.1% prior; Y/Y: 0.6% v 0.5% prior.

- (AT) Austria Sept PPI M/M: -0.1% v -0.3% prior; Y/Y:-1.1 % v -1.3% prior.

- (CZ) Czech Q3 Advance GDP Q/Q: 0.7% v 0.3%e; Y/Y:2.7 % v 2.3%e.

- (NL) Netherlands Q3 Preliminary GDP Q/Q: 0.4% v 0.2%e; Y/Y: 1.6% v 1.7% prior.

- (DE) Germany Oct Unemployment Change: -1.0K v +8.0Ke; Claims Rate: 6.3% v 6.3%e.

- (DE) Germany Q3 Preliminary GDP Q/Q: 0.0% v 0.0%e; Y/Y: 0.3% v 0.2%e; GDP NSA (unadj) Y/Y: 0.3% v 0.2%e.

- (DE) Germany Oct CPI North Rhine Westphalia M/M: % v 0.2% prior; Y/Y: 2.3% v 2.3% prior.

- (DE) Germany Oct CPI Hesse M/M: 0.3% v 0.2% prior; Y/Y: 2.4% v 2.6% prior.

- (DE) Germany Oct CPI Bavaria M/M: 0.3% v 0.4% prior; Y/Y: 2.2% v 2.4% prior.

- (DE) Germany Oct CPI Brandenburg M/M: 0.4% v 0.1% prior; Y/Y: 2.6% v 2.6% prior.

- (DE) Germany Oct CPI Saxony M/M: 0.3% v 0.2% prior; Y/Y:2.1% v 2.2% prior.

- (DE) Germany Oct CPI Baden Wuerttemberg M/M: 0.3% v 0.2% prior; Y/Y: 2.3% v 2.7% prior.

- (IT) Italy Q3 Preliminary GDP Q/Q: 0.0% v 0.1%e; Y/Y: 0.4% v 0.5%e.

- (IS) Iceland Oct CPI M/M 0.5% v 0.1% prior; Y/Y: 4.3% v 4.1% prior.

- (PT) Portugal Q3 Preliminary GDP Q/Q: 0.8% v 0.6%e; Y/Y: 2.4% v 1.8% prior.

- (PT) Portugal Oct Consumer Confidence: -15.9 v -16.5 prior; Economic Climate Indicator: 2.9 v 2.9 prior.

- (ZA) South Africa Sept PPI M/M: -0.1% v+ 0.2%e; Y/Y: 2.3% v 2.6%e.

Fixed income issuance

- None seen.

Looking ahead

- (MX) Mexico Sept Public Balance (MXN): No est v -581.1B prior.

- (BR) Brazil Sept Central Govt Budget Balance (BRL): -15.2Be v -15.6B prior.

- (IS) Iceland Q3 Unemployment Rate: % v 3.5% prior.

- 06:00 (EU) Euro Zone Q3 Advance GDP Q/Q: 0.1%e v 0.1% prior; Y/Y: 1.2%e v 1.5% prior.

- 06:00 (EU) Euro Zone Oct Economic Confidence: 96.0e v 95.5 prior; Industrial Confidence: -10.0e v -10.3 prior; Services Confidence: 3.8e v 3.6 prior; Consumer Confidence (final): No est v -14.2 advance.

- 06:00 (EU) Euro Zone Sept Unemployment Rate: 6.3%e v 6.3% prior.

- 06:00 (BE) Belgium Sept Unemployment Rate: No est v 5.8% prior.

- 06:00 (GR) Greece Sept Unemployment Rate: No est v 8.1% prior.

- 06:00 (IT) Italy Sept Unemployment Rate: 6.0%e v 6.0% prior.

- 06:00 (EU) Daily Euribor Fixing.

- 05:00 (UK) DMO to sell £1.5B in 0.375% Oct 2030 Gilts via tender.

- 06:00 (IT) Italy Debt Agency (Tesoro) to sell €6.5-7.5B in -year and 10-year BTP Bonds.

- 06:00 (IT) Italy Debt Agency (Tesoro) to sell €1.5-2.0B in 2031 and 2032 CCTeu (floating rate notes).

- 06:25 (EU) Daily ECB Liquidity Stats.

- 06:30 (BE) Belgium Oct CPI M/M: No est v -0.3% prior; Y/Y: No est v 2.1% prior.

- 06:30 (HU) Hungary Debt Agency (AKK) to sell 3-year, 5-year and 10-year bonds.

- 06:40 (UK) BOE 7-day short-term repo operation (STR).

- 07:00 (IE) Ireland Oct Preliminary CPI EU Harmonized Y/Y: No est v 2.7% prior.

- 07:00 (PT) Portugal Sept Retail Sales M/M: No est v -0.7% prior; Y/Y: No est v 3.9% prior.

- 07:00 (PT) Portugal Q3 Preliminary GDP Q/Q: No est v 0.6% prior; Y/Y: No est v 1.9% prior.

- 07:00 (IT) Italy Aug Industrial Sales M/M: No est v 0.4% prior; Y/Y: No est v 1.2% prior.

- 07:00 (BR) Brazil Oct FGV Inflation IGPM M/M: -0.2%e v+ 0.4% prior; Y/Y: 1.0%e v 2.8% prior.

- 07:00 (VN) Vietnam Finance Ministry announcement on upcoming bond issuance (held on Wed).

- 07:00 (FI) Finland to sell Bonds via Oro auction.

- 07:00 (RO) Romania to sell RON500M in 6.85% 2030 Bonds.

- 07:00 (CZ) Czech Republic to sell CZK5.0B in 12-month bills.

- 08:00 (ZA) South Africa Sept Monthly Budget Balance (ZAR): No est v -38.3B prior.

- 08:00 (MX) Mexico Q3 Preliminary GDP Q/Q: -0.4%e v +0.6% prior; Y/Y: -0.4%e v 0.0% prior.

- 08:00 (CL) Chile Sept Retail Sales Y/Y: 5.0%e v 5.3% prior; Commercial Activity Y/Y: No est v 4.8% prior.

- 08:00 (CL) Chile Sept Industrial Production Y/Y: 2.0%e v -1.9% prior; Manufacturing Production Y/Y: 7.4%e v 1.8% prior; Total Copper Production: No est v 423.6K prior.

- 08:30 (US) Q3 Advance GDP Annualized Q/Q: 3.0%e v 3.8% prior; Personal Consumption: 3.2%e v 2.5% prior.

- 08:30 (US) Q3 Advance GDP Price Index: 2.7%e v 2.1% prior; Core PCE Price Index Q/Q: 3.0%e v 2.6% prior.

- 08:30 (US) Initial Jobless Claims: 229Ke v K prior; Continuing Claims: 1.93Me v M prior.

- 08:30 (US) Weekly USDA Net Export Sales.

- 09:00 (RU) Russia Oct Gold and Forex Reserve w/e Oct 24th: No est v $742.4B prior.

- 09:00 (DE) Germany Oct Preliminary CPI M/M: 0.2%e v 0.2% prior; Y/Y: 2.2%e v 2.4% prior.

- 09:00 (DE) Germany Oct Preliminary CPI EU Harmonized M/M: 0.2%e v 0.2% prior; Y/Y: 2.2%e v 2.4% prior.

- 09:00 (UK) Daily Baltic Dry Bulk Index.

- 09:15 (EU) ECB Interest Rate Decision: Expected to leave Key Rates unchanged.

- 09:45 (EU) ECB Chief Lagarde post rate decision press conference.

- 10:30 (US) Weekly EIA Natural Gas Inventories.

- 11:30 (US) Treasury to sell 4-Week and 8-Week Bills.

- 12:00 (CA) Canada to sell 2 Year Bonds.

- 13:00 (CH) SNB’s Tschudin.

- 13:15 (US) Fed's Logan at Bank Funding conference.

- 17:00 (NZ) New Zealand Oct ANZ Consumer Confidence Index: No est v 94.6 prior.

- 19:00 (KR) South Korea Sept Industrial Production M/M: 0.1%e v 2.4% prior; Y/Y: 5.9%e v 0.9% prior; Cyclical Leading Index Change: No est v 0.5 prior.

- 19:30 (JP) Japan Sept Jobless Rate: 2.5%e v 2.6% prior; Job-To-Applicant Ratio: No est v 1.2 prior.

- 19:30 (JP) Japan Oct Tokyo CPI Y/Y: 2.4%e v 2.5% prior; CPI (ex-fresh Food) Y/Y: 2.6%e v 2.5% prior; CPI (ex-fresh Food/energy) Y/Y: 2.6%e v 2.5% prior.

- 19:50 (JP) Japan Sept Retail Sales M/M: -0.8%e v -0.9% prior (revised from -1.1%); Y/Y: +0.7%e v -0.9% prior( revised from -1.1%); Dept. Store, Supermarket Sales Y/Y: No est v 1.8% prior.

- 19:50 (JP) Japan Sept Preliminary Industrial Production M/M: +1.5%e v -1.5% prior; Y/Y: +1.8%e v -1.6% prior.

- 20:01 (UK) Oct Lloyds Business Barometer: No est v 42 prior.

- 20:30 (SG) Singapore Q3 Final URA Private Home Prices Q/Q: No est v 1.2% prior.

- 20:30 (AU) Australia Q3 PPI Q/Q: No est v 0.7% prior; Y/Y: No est v 3.4% prior.

- 20:30 (AU) Australia Sept Private Sector Credit M/M: No est v 0.6% prior; Y/Y: No est v 7.2% prior.

- 21:30 (CN) China Oct Manufacturing PMI: 49.6e v 49.8 prior; Non-manufacturing PMI: 50.1ev 50.0 prior; Composite PMI: No est v 50.6 prior.

- 22:00 (SG) Singapore Sept M2 Money Supply Y/Y: No est v 9.5% prior; M1 Money Supply Y/Y: No est v 12.5% prior.

- 23:30 (JP) Japan to sell 3-Month Bills.

- 23:35 (JP) Japan to sell 2-Year JGB Bonds.