US banks to report in premarket as Q3 earnings season begins

EU mid-market update: US banks to report in premarket as Q3 earnings season begins; UK job data supports more rate cuts.

- UK unemployment rose to 4.8% and private pay growth slowed to 4.4% in the three months to August, signaling easing wage pressures and growing labor slack. Analysts expect BOE could cut rates as soon as December. 10-year gilt yield fell several bps to 4.60%, a one month low.

- China has expanded its countermeasures in the escalating US-China trade confrontation by banning all business with five US-based affiliates of South Korea’s Hanwha Ocean, one of the world’s major shipbuilders. The move, coinciding with Washington’s new Section 301 port fees on Chinese ships effective October 14, signals that trade tensions are now spilling over to allied industries, as Beijing also launches an investigation into the tariffs’ impact on its maritime and shipbuilding sectors.

- Chinese rare earth magnet exporters said to have faced intensified scrutiny on license applications since September, with longer approval times and more information requests, echoing April's oversight. The tighter review comes ahead of new MOFCOM export controls effective December 1, which require licenses for any product containing over 0.1% Chinese-origin rare earths and subject end-use applications tied to advanced semiconductors or military AI to case-by-case evaluation.

- Ongoing discussion of "debasement trade" reflects investors’ shift from fiat assets like cash and government bonds toward scarce stores of value such as gold, commodities, and Bitcoin, as protection against monetary dilution. It rests on the view that policymakers will increasingly rely on inflation and financial repression - keeping real rates negative to erode debt - effectively devaluing currencies over time.

- Politico reports that Republican lawmakers and Trump administration officials are quietly exploring ways to extend enhanced Obamacare subsidies set to expire at year-end, signaling preparation for broader health policy negotiations. Early proposals under discussion include adding income caps, requiring minimum premium payments, restricting new enrollees from receiving enhanced credits, and attaching new abortion-related conditions.

- Upcoming US Premarket Earnings: BLK, C, DPZ, FBK, GS, JNJ, JPM, WFC.

- Asia closed lower with Nikkei225 underperforming -2.7%. EU indices -0.8% to +0.2%. US futures -0.5% to -1.0%. Gold +0.7%, DXY +0.1%; Commodity: Brent -2.2%, WTI -2.2%; Crypto: BTC -2.8%, ETH -3.9%.

Asia

- RBA Sept Minutes appropriate for the board’s decisions to remain cautious and data dependent.

- Singapore Q3 Advance GDP Q/Q: 1.3% v 0.5%e; Y/Y: 2.9% v 1.9%e.

- Singapore Central Bank (MAS) Quarterly Monetary Policy Statement: Maintained width, slope and center of currency band.

- Australia Sept NAB Business Confidence: 7 v 4 prior.

- China continued to defend its latest rare earth control measures; took countermeasures against five US-linked firms belonging to Hanwha Ocean's US units; opens investigation into US301 tariffs on Chinese shipping.

- Japan’s main opposition parties said to be considering uniting behind DPP leader Yuichiro Tamaki to challenge Sanae Takaichi for prime minister.

Global conflict/tensions

- Ukraine President Zelenskiy planning to meet Trump in Washington on Friday to discuss air defense, long-range weapons.

Europe

-France Pres Macron: Will not resign; confident that France will have budget by end of 2025.

Americas

- New Philadelphia Fed Pres Paulson (voter in 2026) noted Labor market risks are increasing, but not outrageously; Gradual rate cuts should keep job market close to full employment; Don't know where neutral rate is, so Fed must move cautiously.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 -0.37% at 564.54, FTSE 0.00% at 9,442.60, DAX -0.66% at 24,213.56, CAC-40 -0.61% at 7,885.78, IBEX-35 +0.10% at 15,554.59, FTSE MIB -0.77% at 41,845.00, SMI +0.04% at 12,492.68, S&P 500 Futures -0.71%].

Market focal points/key themes: European indices open lower across the board and remained under pressure through the early part of the session; re-escalation in trade war seen weighing on risk appetite; Israel closed for holiday; consumer real; metals energy; communication subsector supported following Ericsson earnings; reportedly MSC mulling bid for easyJet, though there were also reports that the company denied the rumors; Petershill sell stake in Industry ventures to Goldman Sachs; unofficial start to third quarter earnings season; major companies expected to report in the upcoming US session include JP Morgan, BlackRock, Wells Fargo and Citigroup.

Equities

- Consumer discretionary: EasyJet [EZJ.UK] +3.0% (M&A chatter refuted), TomTom [ROM2.NL] +7.5% (earnings).

- Energy: BP [BP.UK] -1.5% (production update).

- Financials: Close Brothers Group [CBG.UK] -3.0% (further Motor Finance provision).

- Technology: ASML [ASML.NL] -1.5% (Samsung prelim results).

- Telecom: Ericsson [ERICB.SE] +13.5% (earnings), Publicis [PUB.FR] -1.0% (earnings).

Speakers

- Sweden Central Bank (Riksbank) Bunge stressed that monetary policy must be forward-looking. forward-looking indicators pointed to inflation being close to target.

- France Parliament to debate a no-confidence motion on Thursday, Oct 16th.

- EU Trade Commissioner Sefcovic noted that China trade curbs caused problems for EU industry; G7 video call would soon be advisable. Requested talks with Chinese counterparts during week of Oct 19th.

- IEA Monthly Oil Report (OMR) cut the 2025 global oil demand growth from 737K to 710K while slightly raising the 2026 global oil demand growth from 698K to 699K bpd. IEA raised the 2025 global oil supply growth from 2.7M to 3.0M and raised the 2026 global oil supply growth from 2.1M to 2.4M bpd.

- Reportedly Chinese rare earth magnet companies had been facing tighter scrutiny on export license applications since September.

- PBOC official: China's economic foundations are solid and reiterated stance to maintain basic stability of exchange rate at a reasonable and balanced level.

Currencies/fixed income

- USD was firmer against its European counterparts during the session. Risk aversion flows stemming from trade concern was a key catalyst.

- GBP/USD tested 1.3260 for a 2.5 month low after UK labor market data continued to deteriorate with ILO unemployment rate rising to 4.8% and prompted more speculation that BOE could again cut rates in the months ahead with Dec being highly eyed.

- EUR/USD at 1.1550 with the 1.15 level seen as key weekly support. Piar continued to face headwinds on the French political situation as President Macron vowed again not to resign and could deliver the 2026 budget by year end. France Parliament to debate a no-confidence motion on govt on Thursday, Oct 16th.

- USD/JPY was off its worst levels registered during Asia session to drift back above the 152 handle.

- 10-year German Bund yield at 2.60%, France 10-year Oat at 3.44% and 10-year Gilt yield at 4.61% 10-year Treasury yield: 4.02%.

- Spot silver hit a record level with a liquidity squeeze cited as the most recent catalyst. Gold just off its recent record high.

Economic data

- (FI) Finland Sept CPI M/M: +0.3% v -0.2% prior; Y/Y: 0.5% v 0.5% prior.

- (UK) Sept Jobless Claims Change: +25.8K v -2.0K prior; Claimant Count Rate: % v 4.3% prior; Payrolled Employees Monthly Change: -10K v -10Ke.

- (UK) Aug Average Weekly Earnings 3M/Y: 5.0% v 4.7%e; Weekly Earnings (ex-Bonus) 3M/Y: 4.7% v 4.8%e.

- (UK) Aug ILO Unemployment Rate: 4.8% v 4.7%e; Employment Change 3M/3M: +91K v +125Ke.

- (DE) Germany Sept Final CPI M/M: 0.2% v 0.2% prelim; Y/Y: 2.4% v 2.4% prelim.

- (DE) Germany Sept Final CPI EU Harmonized M/M: 0.2% v 0.2% prelim; Y/Y: 2.4% v 2.4% prelim.

- (IN) India Sept Wholesale Prices (WPI) Y/Y: 0.1% v 0.4%e.

- (CH) Swiss Sept Producer & Import Prices M/M: -0.2% v -0.6% prior; Y/Y: -1.8% v -1.8% prior.

- (CZ) Czech Aug Current Account Balance (CZK): -0.7B v +3.7Be.

- (DE) Germany Oct ZEW Current Situation Survey: -80.0 v -74.2e; Expectations Survey: 39.3 v 41.1e.

- (EU) Euro Zone Oct ZEW Expectations Survey: 22.7 v 26.1 prior.

Fixed income issuance

- (UK) DMO opened its book to sell GBP-denominated 5.25% Jan 2041 Gilts via syndicate; guidance seen +8.0-8.5bps to Jan 2040 Gilts; order book over £125B.

- (NL) Netherlands Debt Agency (DSTA) sold €2.125B vs. €2.5B indicated in 0.0% July 2031 DSL bonds; Avg Yield: 2.376% v 2.075% prior.

- (ES) Spain Debt Agency (Tesoro) sold total €2.235B vs. €2.0-3.0B indicated range in 3-month and 9-month bills.

- (IT) Italy Debt Agency (Tesoro) sold total €8.5B vs. €6.75-8.5B indicated range in 3-year, 7-year and 15-year BTP bonds.

Looking ahead

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

- 05:30 (ZA) South Africa Aug Total Mining Production M/M: No est v 1.0% prior; Y/Y: 1.7%e v 4.4% prior; Gold Production Y/Y: No est v -0.4% prior; Platinum Production Y/Y: No est v 6.2% prior.

- 05:15 (CH) Switzerland to sell 3-month Bills.

- 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills.

- 05:30 (DE) Germany to sell €5.5B in % Dec 2027 Schatz.

- 05:30 (BE) Belgium Debt Agency (BDA) to sell combined €2.4B in 3-month and 12-month bills.

- 05:30 (ZA) South Africa to sell combined ZAR3.75B in 2037, 2039 and 2042 bonds.

- 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO).

- 05:40 (UK) BOE allotment in 6-month GBP-enhanced liquidity repo operation (ILTR).

- 06:00 (US) Sept NFIB Small Business Optimism: 100.6e v 100.8 prior.

- 08:00 (BR) Brazil Aug IBGE Services Volume M/M: 0.1%e v 0.3% prior; Y/Y: 2.5%e v 2.8% prior.

- 08:00 (PL) Poland Aug Current Account Balance: -€1.2Be v -€1.3B prior; Trade Balance:-€1.2Be v -€1.3B prior; Exports: €26.0Be v €28.2B prior; Imports: €27.5Be v €29.5B prior.

- 08:00 (BR) Brazil CONAB Production.

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

- 08:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed).

- 08:30 (CA) Canada Aug Building Permits M/M: -1.0%e v -0.1% prior.

- 08:45 (US) Fed’s Bowman.

- 08:55 (US) Weekly Redbook LFL Sales data.

- 09:00 (WO) IMF World Economic Outlook (WEO): Previously saw 2025 Global GDP growth at 3.0%.

- 11:30 (IE) ECB’s Makhlouf (Ireland).

- 11:30 (US) Treasury to sell 6-Week Bills.

- 11:30 (US) Treasury to sell 13-Week and 26-Week Bills.

- 11:40 (AT) ECB’s Kocher (Austria).

- 12:10 (CA) Bank of Canada (BOC) Dep Gov Rogers.

- 12:15 (FR) ECB’s Villeroy (France).

- 12:20 (US) Fed Cahir Powell at NABE.

- 13:00 (UK) BOE Gov Bailey.

- 15:00 (AR) Argentina Sept National CPI M/M: 2.1%e v 1.9% prior; Y/Y: 31.8%e v 33.6% prior.

- 15:25 (US) Fed’s Waller.

- 15:30 (US) Fed’s Collins.

- 17:45 (AU) RBA's Hauser-Fireside Chat.

- 18:45 (NZ) RBNZ Conway (chief economist).

- 19:30 (AU) RBA's Hunter.

- 19:30 (AU) Australia Sept Westpac Leading Index M/M: No est v -0.04% prior.

- 21:30 (CN) China Sept CPI Y/Y: -0.2%e v -0.4% prior; PPI Y/Y: -2.3%e v -2.9% prior.

- 23:00 (KR) South Korea Aug M2 Money Supply M/M: No est v 0.8% prior; L Money Supply M/M: No est v 0.8% prior.

- 23:35 (JP) Japan to sell 20-year JGB Bonds.