EU Market Open: APAC stocks traded mixed following the ultimately choppy performance stateside; Europe looks for a flat/firmer open

• US President Trump reportedly recently told aides he expects to resume bombing Iran in November, WSJ reported.
• Crude futures paused overnight after rallying yesterday in the continued absence of any progress between the US and Iran.
• APAC stocks traded mixed following the ultimately choppy performance stateside; European equity futures indicate a slightly higher cash market open.
• 10yr UST futures took a breather after advancing yesterday as yields pulled back from multi-year highs; DXY traded little changed during Asia-Pac hours.
• Looking ahead, highlights include EZ HICP (Sep), US NFP (Sep). Speakers include ECB’s Vujcic & Fed's Logan. Credit Ratings update from Scope on the US.

SNAPSHOT

• Click for the Newsquawk Week Ahead.

IRAN CONFLICT

• US Pentagon is sending a third aircraft-carrier strike group and additional Marine Corps ships to the Middle East, adding up to 10,000 more troops to the region, according to the Wall Street Journal, citing US officials. The report noted the arrival is expected by the end of November and that Trump recently told aides he expects to resume bombing Iran in November, while the Roosevelt crew is prepared for an extended deployment, according to sources. Note: the third aircraft-carrier deployment was reported in hours via Al Jazeera.
• In recent weeks, the US military has sent two more batteries of the Patriot air defense system to protect oil and gas facilities in Saudi Arabia and Qatar, Axios reported.
• US President Trump reiterated that Iran will never have a nuclear weapon and has no navy or army, while he stated that Iran has not been able to get one of its vessels through the Strait of Hormuz for months. Trump also said huge quantities of oil have passed through the Strait of Hormuz and the US is taking out millions of barrels of oil, claiming that in some cases, it is more than before the war.
• US President Trump reiterated that Iran cannot have a nuclear weapon, while he added that he now has to make a decision and that either Iran signs a deal, or it will no longer exist.
• US President Trump said the Iran war will be ending soon, one way or the other, and that it looks like Iran was involved in the UK base incident. Trump warned that Iran will be hit very hard if it is behind the copilot who tried to crash a flight to Israel, while he separately commented that based on what he heard, Iran was connected to the attempted attack on the plane.
• US President Trump said he had repeatedly stated it would take four to six weeks to eliminate the Iranian nuclear threat, but that he had achieved this in one night, while he added that the remaining time was to ensure the threat stays eliminated.
• US Treasury Secretary Bessent said Iran loaded zero crude oil onto tankers in September and that the Trump administration is cutting off the Iranian regime’s most critical source of revenue, while he added that Operation Economic Outcast is severing the economic lifelines that have allowed Tehran to finance its terrorist agenda.
• Iran’s Foreign Minister reportedly suggested in private talks that Iran was willing to restore nuclear inspectors’ access to bombed facilities in exchange for sanctions relief, according to Bloomberg citing sources. However, IRNA denied the report that Iran proposed a return of IAEA inspectors to nuclear facilities in exchange for easing sanctions.
• IRGC said three UAE-linked tankers attacked recently in the Strait of Hormuz were on the PGWA's non-compliance list, and had transited the Strait repeatedly over the past two months.
• Local sources reported that a 2.5mln bbl capacity supertanker travelling through the Strait of Hormuz illegally was hit 8 kilometres off the coast of Oman and was burning, according to Fars News. UKMTO also announced it received a report of a tanker being struck by an unknown projectile while transiting the Strait of Hormuz, resulting in a fire.
• Yemeni armed forces said their forces targeted 11 high-value targets in Saada, while they later announced that they conducted 20 strikes on Houthi targets across several areas of the Taiz province during a three-hour period.
• Houthi-run Saba News Agency denied that the group attacked a power station in Saudi Arabia's Medina, citing sources.
• Saudi‑led coalition intercepted and destroyed ballistic missiles launched by Yemeni Houthis towards Khamis Mushait.

US TRADE

EQUITIES

• US stocks closed with marginal gains on what was a choppy day, with the Nasdaq 100 mildly outperforming as Technology led, supported by software names following strong Accenture (ACN) earnings, while Synopsys (SNPS) also gained after raising guidance following its deal with OpenAI. Treasuries saw two-way trade, but ultimately bull steepened as front-end yields led the rally, with price action influenced by economic data, Fed speak, and geopolitics as markets entered Q4. There were several data releases in which jobless claims remained low, the Revelio Labs labour market report showed an acceleration in September, while the Chicago Fed unemployment nowcast was unchanged at 4.1%, while ISM Manufacturing missed expectations, but prices paid jumped and the employment component improved, with all eyes now turning to the NFP report.
• SPX +0.19% at 7,666, NDX +0.31% at 30,502, DJI +0.04% at 50,932, RUT +0.35% at 2,807.
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TARIFFS/TRADE

• US President Trump said the trade deficit with China has dropped to the lowest in 44 years and that he gets along great with Chinese President Xi, while he added that China used to rip the US badly and that Canada is ripping the US badly.
• USTR Greer said there is no timeline yet for US-China tariff reductions under the board of trade. Greer also stated that he had constructive talks with the Indian trade minister and they are trying to finish a deal, but added that a US-India trade deal is not imminent and they have identified sticking points.
• Mexico's Economy Minister said they will send a trade mission to the EU next spring.

NOTABLE HEADLINES

• Fed's Bowman (voter) said she sees no urgent need for more rate moves this year, while she touted benefits of a Fed capital plan tied to treasuries.
• Fed's Cook (voter) said supply shocks have had surprisingly persistent effects, becoming more salient for policy, while she stated it is possible that the optimal policy response to a supply shock could be sector-dependent, and they have to be attentive to consumer confidence. Cook also commented that AI is causing pockets of inflation and doesn't think private credit is having a big effect on financial stability.
• Fed's Jefferson (voter) said the Fed is fully committed to returning inflation to its 2% target and may need more time before deciding on its next rate move, while he added that future rate changes should be driven by the data and that weighing additional information would allow the Fed to make a better decision. Jefferson added that economic output and the labour market are broadly solid, while bond yields indicate that market participants are reassessing the outlook. He also said the September rate hike would help anchor inflation expectations.
• Fed's Logan (2026 voter) said the policy rate needs to increase an additional 50bps or more and that without higher rates, inflation will not get to the 2% goal, while she added that policy is not sufficiently restrictive and needs to become modestly tighter. Logan said price stability must be restored and at a minimum, several further rate hikes would reverse last autumn’s cuts. She also stated that it remains uncertain how high the policy rate must go to bring inflation back towards 2%.
• Fed's Kashkari (2026 voter) said he does not have a strong view on an October rate hike and is open-minded about the pace of further tightening. He has pencilled in one more hike this year and another in 2027. Kashkari added that monetary policy does not appear to be providing much restraint at present and that he does not see meaningful tightening in financial conditions based on the data.
• Fed's Schmid (2028 voter) said the relentless rise in long-term interest rates is starting to have effects on more parts of the economy, while he noted some frictions in some of the long-market users of credit, pointing to multifamily housing and commercial lending, according to Axios.
• US Treasury Buyback (Liquidity support, 10-20-year nominal coupons, max USD 6bln): Accepts USD 6.0bln of USD 46.39bln offers, accepts 2 of 41 eligible securities.
• US President Trump is likely to pick Jay Clayton for AI czar, while the White House has been discussing having him remain in his current role as National Intelligence Director, according to CBS.
• Amazon (AMZN) is reportedly looking to offload around USD 8bln of NVIDIA's (NVDA) Grace Blackwell chips to external investors through a special-purpose vehicle to help strengthen its balance sheet, the FT reports.

APAC TRADE

EQUITIES

• APAC stocks traded mixed following the ultimately choppy performance stateside as oil prices climbed, yields pulled back, and participants digested a slew of data, while all eyes turn to the looming NFP report.
• ASX 200 mildly gained, with the index led by strength in tech and energy, albeit with further upside capped amid a lack of fresh catalysts and with real estate and healthcare at the other end of the spectrum.
• Nikkei 225 retreated as participants digested the latest data releases, including a surprise uptick in the Unemployment Rate and the hotter-than-expected Tokyo CPI data, which was said to be driven by an unwinding of price suppression effects from targeted government subsidies.
• KOSPI traded indecisively following the somewhat mixed South Korean CPI data, in which the Y/Y reading slowed to 2.9% from 3.1%, as expected, but remained above the central bank's 2% target.
• Hang Seng underperformed on return from the holiday closure, with Stock Connect trade remaining shut owing to the week-long closure in the mainland, while pressure was seen in auto names following monthly sales updates and with casino stocks in the red after Macau casino revenue declined last month.
• US equity futures edged higher in a gradual continuation of yesterday's intraday rebound, but with gains contained as participants await the key US jobs data.
• European equity futures indicate a slightly higher cash market open with Euro Stoxx 50 futures down 0.2% after the cash market closed with losses of 1.5% on Thursday.

FX

• DXY traded little changed during Asia-Pac hours but held on to the prior day's spoils after gaining against most of its peers as it benefited amid the choppy risk sentiment, while there was an abundance of Fed speakers, including Jefferson, who suggested they could take more time to decide the next rate move, as giving more time to consider the data would allow the Fed to make a better decision on rates, while Bowman sees no urgent need for more rate moves this year. Furthermore, Kashkari said he does not have a strong view on an October rate hike and is open-minded about the pace of further tightening, while Logan said the policy rate needs to increase by an additional 50bps or more and that without higher rates, inflation will not get to the 2% goal. In terms of the data, the recent releases were somewhat mixed, while all attention turns to the looming US NFP report.
• EUR/USD price action was constrained after recently underperforming as it gave way to CHF and dollar strength, while the US was said to have warned France and Germany to release emergency diesel stocks or face a possible export ban.
• GBP/USD just about reclaimed the 1.3200 handle after bouncing off a 3-month trough, although the recovery is limited and there was little reaction seen to reports that UK PM Burnham is leaving the door open to a snap general election next year.
• USD/JPY traded relatively sideways as participants digested the latest data from Japan, which showed a surprise uptick in the Unemployment Rate and an acceleration in Tokyo-area CPI.
• Antipodeans eked slight gains in uneventful overnight trade amid the mixed risk appetite and in the absence of pertinent data.

FIXED INCOME

• 10yr UST futures took a breather after advancing yesterday as yields pulled back from multi-year highs amid mixed data, Fed speak and geopolitics, while participants look ahead to the NFP report.
• Bund futures held on to their gains after global yields reversed yesterday in choppy trade and with the US pressuring Europe to release some of its diesel stockpiles.
• 10yr JGB futures tracked the recent rebound in global counterparts but are off today's best levels as participants also reflected on the acceleration in Tokyo CPI data.

COMMODITIES

• Crude futures paused overnight after rallying yesterday in the continued absence of any progress between the US and Iran. The upside was also facilitated amid the ongoing risk of a US diesel export ban, while WSJ reported that the US is sending a third carrier strike group to the Middle East and that President Trump was said to have told aides he expects to resume bombing Iran in November.
• Crude flows through Saudi Arabia's East-West pipeline have recovered to around 5.5mln BPD, allowing exports to restart from the Red Sea port of Yanbu, according to Argus, citing a source.
• Iraq, Kuwait, Saudi Arabia, Qatar and the UAE have exported an average of 26% fewer barrels of crude oil during the conflict than over the same period last year, while the average price per barrel has risen 44% YTD, according to Tanker Trackers.
• Venezuela's oil exports fell to 1.08mln BPD in September, while exports to the US increased to 629k BPD and shipments to India and Europe declined to 253k BPD and 86k BPD, respectively.
• US President Trump said the US will begin filling the Strategic Petroleum Reserve with Venezuelan oil at very little cost.
• US President Trump said he may ask Europe to release diesel supplies, while he also stated that prices are coming down.
• US Energy Secretary Wright said the US will ask Europe to release strategic diesel reserves, adding that he expects positive news and is highly confident Europe will help address the situation, according to Fox. He also said gasoline and diesel prices will be lower by the election.
• US Treasury Secretary Bessent said their European partners should accelerate delivery on their existing commitments and make additional supplies immediately available to address ongoing disruptions.
• EU Trade Chief Sefcovic said he discussed high diesel prices with USTR Greer and spoke about a coordinated approach to releasing diesel reserves, while he added that any release would form part of a wider ongoing discussion, according to FBN.
• EU Energy Union Taskforce is due to meet today to discuss potential diesel stock releases, according to diplomats.
• Spot gold swung between gains and losses as participants await the key US jobs report.
• Copper futures were choppy amid the mixed risk appetite and absence of its largest buyer.

CRYPTO

• Bitcoin climbed higher overnight and returned to above the USD 85,000 level.

NOTABLE ASIA-PAC HEADLINES

• Japanese Economy Minister Kiuchi said Japan is no longer in deflation, so there is no need for excessively loose monetary policy that favours higher inflation, while he added that the Takaichi administration's policy is different from reflationary policy that aims to pull Japan out of deflation, and is different from Abenomics in that it seeks to achieve both a strong economy and fiscal discipline and focuses on boosting Japan's supply capabilities.

DATA RECAP

• Japanese Tokyo CPI (Sep YY) 2.7% vs. Exp. 2.5% (Prev. 1.9%)
• Japanese Tokyo Core CPI (Sep YY) 2.7% vs. Exp. 2.4% (Prev. 1.8%)
• Japanese Tokyo CPI Ex Food and Energy (Sep YY) 3.0% vs. Exp. 2.5% (Prev. 2.0%)
• Japanese Unemployment Rate (Aug) 2.5% vs. Exp. 2.4% (Prev. 2.4%)
• Japanese Jobs/Applications Ratio (Aug) 1.18 vs. Exp. 1.18 (Prev. 1.18)
• South Korean CPI (Sep MM) 0.3% vs. Exp. 0.4% (Prev. 0.2%)
• South Korean CPI (Sep YY) 2.9% vs. Exp. 2.9% (Prev. 3.1%)

GEOPOLITICS

RUSSIA-UKRAINE

• Russian President Putin said Russia needs security guarantees over Ukraine and is ready to hold talks and conclude them as soon as possible, but only on conditions acceptable to the Russian people. Putin also stated that he does not see a willingness on Ukraine's part to negotiate.
• Russian President Putin said Russia is not threatening anyone, but would consider using all weapons in its arsenal if a threat emerged to the Russian exclave of Kaliningrad.
• Russian President Putin said some European countries, including Germany, have seized Russian assets and that Russia is responding in kind, while he added that those countries may recover the assets under a favourable scenario.
• Russian President Putin said he supports a meeting with Chinese President Xi and US President Trump, but added that the agenda would need to be worked out. Putin also stated that Russia is developing its nuclear forces, which are more than 98% modernised, and is ready to resume dialogue with the US on strategic nuclear weapons if Washington expresses an interest.
• Ukrainian President Zelensky said Russian President Putin instructed his military leaders to abandon the rules of war, citing information obtained by Ukrainian spy agencies, according to FT.
• South Korean President Lee said they will take additional measures if Ukraine continues to deny the agreement on North Korean prisoners of war repatriation, while he called on Ukraine to acknowledge the agreement and apologise.

EU/UK

NOTABLE HEADLINES

• UK PM Burnham is reportedly leaving the door open to a snap general election next year, according to The i Paper.
• UK Ministers are working up sweeping plans for welfare changes including scrapping a key disability benefit for under-25s and replacing it with a multibillion-pound package of support to get into work, according to The Guardian.