US govt shutdown has ended, market waits for retroactive economic data

EU Mid-Market Update: US govt shutdown has ended; Market waits for retroactive economic data; BoFA says Nov-to-date consumer still strong.

Notes/observations

- Sterling hits 2.5-year low vs euro after weak UK Q3 GDP (+0.1% vs 0.2% expected) and ahead of Nov 26th budget; Possibility of fiscal tightening and markets price 82% chance of BOE rate cut in December.

- US govt shutdown ends with House approval at 222-209. Sept BLS jobs data to be released in coming days. Oct data was likely never collected.

- Analysts keep re-assessing today’s AI financing loop, where capital endlessly circulates through Nvidia, OpenAI, Oracle, and Microsoft via off balance sheet leases, private credit structures, and syndicated construction loans. In this AI capex prisoner’s dilemma, every hyperscaler must keep financing $50B to $60B per gigawatt AI campuses through Beignet style SPVs, Jacquard sized bank syndicates, and high yield vendor financed chip deals just to avoid spooking markets, creating a leveraged web of claims on the same future AI cash flows that will crack if those revenues arrive late, shrink, or get regulated.

- Meanwhile, Baidu escalated China’s sovereign compute push by unveiling two domestic AI chips, a training grade M300 due in 2027 and an inference focused M100 in 2026, alongside large Tianchi supernodes meant to mimic or surpass restricted Nvidia class systems, joining Huawei in this effort. At the same time, Alibaba is overhauling its mobile AI app into a Qwen branded agentic assistant to build a mass user base for future monetized services and tighten competition with OpenAI like consumer platforms.

- Crude oil turns lower as IEA flags growing surplus.

- Shipping giant Hapag-Lloyd notes trades to and from the US remain under pressure while other key trade lanes have held up well.

- Overnight, Australian 3-year yields rose +10bps after hot Australia Oct jobs and falling unemployment; KRW weakened to 1,476 vs USD on large fiscal deficit; Japan PPI rose and Euro/Yen hits record 179.49; Japan 5-year JGB sale sees below-average demand.

- Notable Corp News: Siemens announced strategy update and guided initial FY26, and trades lower over 5%; Persimmon Q3 performance steady despite macro headwinds; Cisco raises FY26 guidance, reports strong AI infrastructure demand from hyperscalers totaling $1.3B.

- Asia closed mixed with Shanghai outperforming +0.7%. EU indices -0.3% to +0.6. US futures 0.0% to -0.2%. Gold +1.0%, DXY -0.2%; Commodity: Brent +0.2%, WTI +0.2%; Crypto: BTC -2.0%, ETH -1.1%.

Asia

- China Yuan (CNY) is expected to continue rising in 2026; notes factors including 'structural weakness' in the US dollar index - China Securities Journal.

- BOJ Gov Ueda: Aiming for stable inflation with rise in wages; Mechanism is in place for wages and prices to rise gradually

- Taiwan Chief Statistician: Sees 2025 GDP growth >5.5%.

- South Korea Fiscal Deficit through Sept at KRW102.4T [2nd largest deficit on record for the Jan-Sept period, after that of 2020].

- Singapore Central Bank (MAS): Announces Successful Live Trial of Settlement of Interbank Overnight Lending Using Wholesale Central Bank Digital Currency.

Europe

- BOE futures now price 85% chance of Dec rate cut (v 65% d/d) following GDP and industrial production data

- Sweden Central Bank (Riksbank) Financial Stability Report: Risks to financial stability remain in an uncertain world

- ECB Economic Bulletin: Risks remain from global trade tensions, geopolitical instability and potential financial market volatility, though infrastructure and defense spending could support growth.

Americas

- White House: Sept BLS data will be released following the Gov reopening.

- Majority of US House by 222-209 votes confirmed to pass the reopening of the US govt, as expected.

- President Trump: Confirms government to resume 'normal' operations, signs bill to end the gov't shutdown (as expected).

- US House Speaker Johnson: Will bring the Epstein files vote to the House floor next week.

- US FAA freezes flight reduction plan at 6%; FAA will continue to monitor staffing levels.

Energy

- IEA Monthly Oil Report (OMR): Raised both supply and demand forecasts for both 2025 and 2026.

Trade

- German Economy Ministry: Significantly weaker trade dynamics are widely expected for 2026.

Speakers/fixed income/FX/commodites/erratum

Equities

Indices [Stoxx600 +0.13% at 584.96, FTSE -0.35% at 9,877.10, DAX -0.33% at 24,300.77, CAC-40 +0.56% at 8,287.51, IBEX-35 +0.08% at 16,629.50, FTSE MIB +0.29% at 44,922.00, SMI +0.07% at 12,812.21, S&P 500 Futures -0.16%].

Market Focal Points/Key Themes: European indices open generally higher and remained in positive territory through the early part of the session; notable exception being the FTSE 100 which is in the red after disappointing UK GDP figures; reduced uncertainty following US government reopening seen supporting risk appetite; sectors leading to the upside include technology and consumer discretionary; among lagging sectors are materials and industrials; earnings expected in the upcoming US session include Walt Disney, Enel, Deutsche Euroshop and Applied Materials.

Equities

- Consumer discretionary: Wizz Air [WIZZ.UK] +14.0% (earnings), Burberry [BRBY.UK] +3.5% (earnings), Persimmon [PSN.UK] +3.0% (trading update; weak UK data), Delivery Hero [DHER.DE] +7.0% (earnings).

- Healthcare: Merck KGaA [MRK.DE] +6.5% (earnings).

- Industrials: Siemens [SIE.DE] -4.5% (earnings), Rolls-Royce [RR.UK] -1.0% (trading update).

- Technology: STMicroelectronics [STM.FR] +1.5% (Cisco and Kioxia results).

- Telecom: Deutsche Telekom [DTE.DE] +0.5% (earnings).

Speakers

- New Zealand Fin Min: Accepted or partially accepted all recommendations made by Finance and Expenditure Committee's inquiry into banking competition.

-BOJ Gov Ueda: Aiming for stable inflation with rise in wages; Mechanism is in place for wages and prices to rise gradually

-Japan PM Takaichi: We'll strive to create a strong economy so that tax revenues rise without tax hikes.

-Japan Fin Min Katayama: JGBs are held predominantly by domestic investors, so it's hard to foresee Japan defaulting on its debt.

-ECB’s Villeroy (France): Victory over inflation looks long term.

Economic data

-(UK) Oct RICS House Price Balance: -19% v -14%e.

-(FR) France Q3 ILO Unemployment Rate: 7.7% v 7.6%e; Mainland Unemployment Rate: 7.5% v 7.3% prior.

-(UK) Q3 PRELIMINARY GDP Q/Q: 0.1% V 0.2%E; Y/Y: 1.3% V 1.4%E; Sept Monthly GDP M/M: -0.1% v 0.0%e.

-(UK) SEPT INDUSTRIAL PRODUCTION M/M: -2.0% V -0.2%E; Y/Y: -2.5% V -1.3%E; Manufacturing Production M/M: -1.7% v -0.3%e; Y/Y: -2.2% v -1.7%e; Construction Output M/M: 0.2% v 0.0%e; Y/Y: 1.3% v 1.0%e.

-(UK) SEPT VISIBLE TRADE BALANCE: -£18.9B V -£20.8BE; Overall Trade Balance: -£1.1B v -£3.1Be; Visible Trade Balance (ex-precious metals): -£2.9B v -£2.6Be.

-(UK) Sept Index of Services M/M: 0.2% v 0.1%e; 3M/3M: 0.2% v 0.3%e.

- (SE) Sweden Oct Final CPI M/M: 0.3% v 0.3% prelim; Y/Y: 0.9% v 0.9% prelim; CPIF M/M: 0.4% v 0.4% prelim; Y/Y: 3.1% v 3.1% prelim; CPIF (ex-energy) M/M: 0.3% v 0.3% prelim; Y/Y: 2.8% v 2.8% prelim; CPI Level: 419.35 v 418.26 prior.

-(CH) Swiss Oct Producer & Import Prices M/M: -0.3% v -0.2% prior; Y/Y: -1.7% v -1.8% prior.

-(PL) Poland Q3 Preliminary GDP Q/Q: 0.8% v 0.8%e; Y/Y: 3.7% v 3.7%e.

-(CZ) Czech Sept Current Account Balance (CZK): 29.4B v 1.7Be.

-(CN) CHINA OCT M2 MONEY SUPPLY Y/Y: 8.2% V 8.1%E; M1 Money Supply Y/Y: 6.2% v 7.2% prior; M0 Money Supply Y/Y: 10.6% v 11.5% prior.

-(CN) CHINA OCT YTD AGGREGATE FINANCING (CNY): 30.90T V 31.26TE.

-(CN) CHINA OCT YTD NEW YUAN LOANS (CNY): 14.97T V 15.25TE.

-(ZA) South Africa Sept Mining Production M/M: +2.2% v -0.9% prior; Y/Y: +1.2% v 0.0% prior; Gold Production Y/Y: +5.9% v -3.6% prior; Platinum Production Y/Y: +3.8% v -3.0% prior.

-(UK) Q3 Output Per Hour Y/Y: +1.1% v -0.5% prior.

-(EU) EURO ZONE SEPT INDUSTRIAL PRODUCTION M/M: 0.2% V 0.7%E; Y/Y: 1.2% V 2.0%E.

Fixed income issuance

-ITALY DEBT AGENCY (TESORO) SELLS TOTAL €8.0B VS. €6.5-8.0B INDICATED RANGE IN 3-YEAR, 7-YEAR AND 30-YEAR BTP BONDS (4 TRANCHES).

- Sweden sells SEK500M vs. SEK500M indicated in 0.75% Jun 2036 I/L bonds; Avg Yield: 0.982% v 0.880% prior; Bid-to-cover: 2.47x v 2.26x prior.

-Vietnam Finance Ministry announcement on upcoming bond issuance (held on Wed); to sell combined VND14.0T in 5-year and 10-year, 15-year and 30-year bonds on Nov 19th.

Looking ahead

- 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-year, 5-year and 10-year bonds

- 05:40 (UK) BOE 7-day short-term repo operation (STR)

- 06:00 (PT) Portugal Q3 Labour Costs Y/Y: No est v 5.2% prior

- 06:30 (CL) Chile Central Bank (BCCh) Oct Minutes

- 07:00 (RO) Romania to sell combined RON1.0B in 2032 and 2035 bonds.

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

- 07:00 (BR) Brazil Sept Retail Sales M/M: No est v 0.2% prior; Y/Y: No est v 0.4% prior.

- 07:00 (BR) Brazil Sept Broad Retail Sales M/M: No est v 0.9% prior; Y/Y: No est v -2.1% prior.

- 07:00 (BR) Brazil CONAB crop report.

- 08:00 (RU) Russia Gold and Forex Reserve w/e Nov 7th: No est v $B prior.

- 08:00 (PL) Poland Sept Current Account Balance: No est v -€3.1B prior; Trade Balance: No est v -€2.1B prior; Exports: No est v €25.0B prior; Imports: No est v €27.1B prior.

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

- 08:30 (US) Initial Jobless Claims: No est v K prior; Continuing Claims: No est v M prior.

- 08:30 (US) Oct CPI M/M: No est v 0.3% prior; Y/Y: No est v 3.0% prior.

- 08:30 (US) Oct CPI (ex-food/energy) M/M: No est v 0.2% prior; Y/Y: No est v 3.0% prior.

- 08:30 (US) Oct CPI Index NSA: No est v 324.800 prior; CPI Core Index: No est v 330.542 prior.

- 08:30 (US) Oct Real Avg Hourly Earning Y/Y: No est v 0.7% prior; Avg Weekly Earnings Y/Y: No est v 0.4% prior.

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

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

- 12:00 (US) Weekly DOE Oil Inventories.

- 13:00 (US) Treasury to sell 30-Year Bonds.

- 14:00 (US) Oct Federal Budget Balance: No est v $198.0B prior.

- 16:00 (KR) South Korea Oct Export Price Index M/M: No est v 0.6% prior; Y/Y: No est v 2.2% prior.

- 16:00 (KR) South Korea Oct Import Price Index M/M: No est v 0.2% prior; Y/Y: No est v 0.6% prior.

- 16:30 (NZ) New Zealand Oct Manufacturing PMI: No est v 49.9 prior.

- 18:00 (PE) Peru Central Bank Interest Rate Decision.

- 20:30 (CN) China Oct New Home Prices M/M: No est v -0.4% prior; Used Home Prices M/M: No est v -0.6% prior.

- 21:00 (CN) China Oct Retail Sales Y/Y: No est v 3.0% prior; Retail Sales YTD Y/Y: No est v 4.5% prior.

- 21:00 (CN) China Oct Industrial Production Y/Y: No est v 6.5% prior; Industrial Production YTD Y/Y: No est v 6.2% prior.

- 21:00 (CN) China Oct YTD Fixed Urban Assets Y/Y: No est v -0.5% prior.

- 21:00 (CN) China Oct Surveyed Jobless Rate: No est v 5.2% prior.

- 21:00 (CN) China Oct YTD Property Investment Y/Y: No est v -13.9% prior.

- 21:00 (CN) China Oct YTD Residential Property Sales Y/Y: No est v -7.6% prior.

- 23:00 (MY) Malaysia Q3 GDP Q/Q: No est v 2.1% prior; Y/Y: No est v 5.2% prior.

- 23:00 (MY) Malaysia Q3 Current Account (MYR) No est v 0.3B prior.

- 23:30 (JP) Japan Sept Tertiary Industry Index M/M: No est v -0.4% prior.

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