EU Market Open: APAC stocks were mixed as the region digested the FOMC and big tech earnings; KOSPI underperformed as Samsung Electronics' results

The Fed kept rates unchanged, as expected, with hawkish dissents from Hammack and Cook; Chair Warsh's press conference lacked hawkish surprises, weighing on the USD and short-end yields.
APAC stocks were mixed as the region digested the FOMC and big tech earnings; KOSPI underperformed as Samsung Electronics' results failed to meet lofty expectations.
US equity futures were mixed, with NQ lagging as Alphabet slumped after missing on top and bottom lines, while Microsoft rallied after-hours.
European equity futures indicate a flat cash market open with Euro Stoxx 50 futures up 0.1%.
Crude futures declined amid mediation hopes, after reports of a lot of back and forth between Iran and the US via mediators and US VP Vance's outreach to Iranian hard-liner Rezaei.
Looking ahead, highlights include Swedish GDP (Q3/Sep), EU Economic Sentiment (Oct), US GDP (Q3), PCE (Sep), Jobless Claims (w/e Oct/24), Personal Income (Sep), Atlanta Fed GDPNow, Japanese Tokyo CPI (Oct), Japanese Retail Sales (Sep), ECB Policy Announcement (Oct), EU-Canada summit (29-30 Oct). Speakers include ECB President Lagarde & Cipollone. Supply from Italy, the UK and the US. Earnings from Caterpillar, Eli Lilly, Mastercard, Bristol-Myers Squibb, Intel, Amazon, Sandisk, Starbucks, Shell, Lloyds, Glencore, Schneider Electric, TotalEnergies, & Air Liquide.

SNAPSHOT

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FOMC

Federal Reserve kept its rates unchanged at 3.75-4.00%, as widely expected, with Cook and Hammack dissenting in favour of a 25bps hike, with the former somewhat of a surprise. The statement was little changed as it reiterated that inflation remains elevated and that the Committee is continuing its policy of maintaining ample reserves in the banking system, although it added one key line, stating that "The accumulation of more information will help the Committee determine the policy stance appropriate to ensure a timely return of inflation to the 2% goal". Furthermore, it upgraded the language around economic growth to "strong" from "solid".
Fed Chair Warsh said the committee will deliver price stability, while he said they are unwilling and unable to call financial conditions tight. Warsh also said they made clear a readiness to act and have shown willingness to act. He announced that they decided to change the FOMC schedule next fall and stated that eight meetings a year is the right number, but one meeting will not have a vote on the policy rate and will be focused on strategy, while he expects to have six policy-setting meetings in 2028.
Fed Chair Warsh said during the Q&A that the overwhelming judgement at the FOMC is that monetary medicine is starting to work and that they decided to take stock of where they are, and when asked whether the period ahead will provide more clarity, said their judgement is that it would. Warsh said there is no soft inflation, no implicit inflation target and that there's a target of price stability, which is 2% as measured by PCE. Warsh noted a stable correlation between rising oil prices and market-set interest rates, until recently, adding that interest rates have rolled over to the downside and noted that oil futures prices have moved up. Furthermore, he said that he doesn't believe in forward guidance, absent a crisis, and is not going to pre-judge meetings, while he won't share musings on what will happen in December, but stated they might learn a lot by then and will be better positioned to determine the right policy decision.

IRAN CONFLICT

US President Trump said at a rally in Ohio that they will rename the Strait of Hormuz the Trump Strait. Trump separately commented that Iran needs help with medical supplies and that VP Vance's letter to the Iranian official was about supplies to help people, while Trump added that he didn't tell Vance to write to Iran.
US VP Vance reached out to Iranian hard-liner Rezaei in a bid to restart peace talks, according to WSJ. The outreach aims to test whether enough common ground exists to persuade Trump against ordering a short, intense strike on Iran in the coming weeks, while some US officials believe engaging Iranian hard-liners could produce a better diplomatic outcome.
US Treasury Secretary Bessent said Iran is not able to get dollars, and funding for their proxies is going down, while he added that Operation Outcast is succeeding.
White House principal deputy press secretary Kelly told the Jerusalem Post that the US will not be attacking Iran at any time prior to the midterm elections, while she added that Iran is in very bad condition, both economically and militarily. Furthermore, she stated that the blockade will remain in full force and effect, with oil flowing in record numbers of barrels through the Hormuz Strait.
US CENTCOM denied Iranian reports that commercial vessels are hitting sea mines in the Strait of Hormuz, stating that all internationally recognised primary transit routes through Hormuz have been cleared of sea mines. It was later reported that Iranian press noted a 'baseless claim' by US CENTCOM that main transit routes through the Strait of Hormuz have been cleared of sea mines.
US reportedly warned allies to brace for possible Iran strikes, according to AP citing two diplomats.
Iran is reportedly being pressed to make nuclear concessions as massive post-midterm strikes loom, according to Axios citing sources. US President Trump told Axios that talks with Iran are underway via mediators but said he is unsure whether they will succeed, while mediators are warning Iran that accepting the proposals may be its only way to avert major attacks after the midterms. If Iran lets UN inspectors visit its nuclear sites, it could get waivers to sell oil and access to some frozen funds for food and humanitarian goods, while a renewed bombing campaign looks likely soon after the midterms without a last-minute deal.
The timeline for the new proposal includes opening the Strait of Hormuz and lifting the blockade, while the Iranian nuclear file is on the new timetable and inviting inspectors is one of the items, according to Al Arabiya citing Arab sources. Consultations between mediators and Iran will be held at a meeting in Turkey before November 4th, and Iran has requested reducing the 7-day period to 4 days.
There has been a lot of back and forth between the Iranians and Americans via the mediators over the last few days, according to NewsNation citing a source.
Iranian Foreign Minister Araghchi said Tehran continued to give diplomacy a chance, while he added that Iran remained in close contact with intermediaries to review ideas that could ensure implementation of its seven-day plan in less than a week. Furthermore, a separate report noted that Araghchi said Iran could reopen Hormuz within days if its conditions are accepted, according to Press TV.
Iranian Parliament’s National Security Commission Secretary said parliament’s plans to withdraw from the NPT are ready, while they are prepared to take legislative action whenever there is a comprehensive will in the country for it, according to Fars.
Israel conducted two airstrikes on areas in southern Lebanon, according to Mehr News Agency.
Saudi-led coalition forces intensified military action against Yemen by carrying out 101 airstrikes and missile attacks during a 24-hour period, according to IRNA.

US TRADE

EQUITIES

US stocks closed in the green on Wednesday, with outperformance in the Nasdaq, although the equal-weight S&P 500 was flat. Sectors were predominantly firmer, with Tech, Energy and Financials leading, while Utilities, Real Estate and Consumer Staples closed in the red. Tech received a boost from Oracle (ORCL) after it provided long-term guidance and announced plans to limit capital raises, helping support several recently pressured neo-cloud names following debt concerns in the AI space. However, after-hours earnings saw Google (GOOGL) tumble and Microsoft (MSFT) rally, while Cyber & Software names were hit after Fortinet (FTNT) and ServiceNow (NOW) figures.
SPX +0.28% at 7,744, NDX +0.55% at 29,813, DJI +0.19% at 52,480, RUT +0.43% at 2,831.
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TARIFFS/TRADE

White House said US President Trump has directed officials to negotiate agreements with trading partners to address national security risks from imports of robotics and industrial machinery from any country.
China condemned the US adding three Chinese firms to the Xinjiang Act list and MOFCOM called on the US to halt Xinjiang-related pressure and smear campaigns against Chinese companies, while it warned it will take firm action to safeguard its interests.

NOTABLE HEADLINES

US Treasury Secretary Bessent said Fed Chair Warsh should have an open mind on the transitory nature of any supply shocks, while he stated that President Trump has great confidence in Warsh's handling of the mandate. Furthermore, Bessent commented that the Fed is very attentive to being above the inflation target for a long time and that Warsh is off to a great start.
Alphabet (GOOGL) Q3 2026 (USD): EPS 2.12 (exp. 3.03), Rev. 127.6bln (exp. 127.91bln), Oper. income 40.58bln (exp. 43.16bln), Google Services rev. 96.30bln (exp. 98.4bln), Google Cloud rev. 30.71bln (exp. 29.1bln), Google Search & other rev. 63.35bln (exp. 64.85bln). Co. shares are down 9.7% after-hours.
Microsoft (MSFT) Q1 2027 (USD): EPS 4.92 (exp. 4.72), Rev. 92.3bln (exp. 90.6bln), Oper. income 45.9bln (exp. 44.1bln), Net income 36.6bln (exp. 35.1bln), Cloud rev. 63.9bln (exp. 61.62bln). Co. shares are up 3.7% after-hours.
US Department of Agriculture confirmed New World Screwworm in Arizona.

APAC TRADE

EQUITIES

APAC stocks were ultimately mixed as the region reflected on recent key events, including the FOMC rate decision and several big tech earnings.
ASX 200 was kept afloat as strength in real estate, energy, financials and utilities atoned for the losses in the tech, consumer and mining sectors, but with gains capped amid a lack of fresh pertinent drivers.
Nikkei 225 was choppy, briefly wiping out its early gains, before rebounding later in the session, with some caution seen as the BoJ kick-started its 2-day policy meeting. Meanwhile, attention was also on the largest-ever Topix rebalancing, which is expected to trigger around USD 60bln in passive trading at Thursday's close, with the reshuffle affecting more than 700 stocks and involving additions, deletions and free-float weight adjustments.
KOSPI underperformed with index heavyweight Samsung Electronics pressured following its earnings results, in which it reported Q3 net income rose by more than 500% Y/Y to KRW 75.2tln, but failed to meet the lofty expectations.
Hang Seng and Shanghai Comp were somewhat varied as participants digested a deluge of earnings, despite another firm liquidity effort by the PBoC, which continued with its CNY 1tln-plus open market operations.
US equity futures traded mixed, with the Emini Nasdaq 100 the laggard following the big tech earnings results, with Alphabet shares slumping by as much as double-digit percentages after it missed on top and bottom lines.
European equity futures indicate a flat cash market open with Euro Stoxx 50 futures up 0.1% after the cash market closed with gains of 0.1% on Wednesday.

FX

DXY remained softer for most of the session in the aftermath of the FOMC meeting, where the Fed kept rates on hold, as widely expected, but with two hawkish dissenters as Hammack (exp.) and Cook (unexp.) voted for rate increases, while the Committee noted that "The accumulation of more information will help the Committee determine the policy stance appropriate to ensure a timely return of inflation to the Committee's 2 per cent goal". There was initial choppy price action seen following the decision and statement, although USD pressure set in shortly after as Fed Chair Warsh's press conference lacked the hawkish elements needed to support the buck and resulted in a decline in short-end yields.
EUR/USD held on to the prior day's gains for most of the session after benefitting from the softer buck and as participants await the ECB meeting, with policymakers expected to keep rates unchanged despite elevated energy prices and inflation concerns.
GBP/USD marginally gained following the FOMC and UK Budget announcement, with Chancellor Healey confirming a 3ppt increase in the bank tax surcharge at the Autumn Budget announcement, while the OBR raised its 2027 inflation forecast to 3.4% from 2.0% and lowered GDP growth expectations to 1.0%.
USD/JPY was lacklustre with headwinds seen post-FOMC and amid few fresh catalysts for Japan, while the BoJ begins its 2-day policy meeting, where the central bank is expected to keep rates unchanged, although participants will be eyeing the language regarding achieving the 2% price target.
Antipodeans were range-bound amid the mixed risk appetite and absence of tier-1 data releases.
PBoC set USD/CNY midpoint at 6.7147 vs exp. 6.6596 (prev. 6.7165).

FIXED INCOME

10yr UST futures edged higher amid softer oil prices and following the choppy but ultimately dovish reaction to the FOMC, where the Fed kept rates unchanged and Chair Warsh refrained from any hawkish surprises at the presser.
Bund futures continued their rebound from the prior day's trough and returned to above the 122.00 level, while attention turns to the ECB, which is widely expected to keep rates unchanged later today.
10yr JGB futures were indecisive in the absence of any tier-1 data and as the BoJ begins its 2-day meeting, while the latest 2-year auction from Japan was somewhat mixed and resulted in a slightly higher-than-previous bid/cover but lower accepted prices.

COMMODITIES

Crude futures declined amid some mediation hopes after reports that there has been a lot of back and forth between the Iranians and Americans via mediators over the last few days, while it was also reported that US VP Vance reached out to Iranian hard-liner and Supreme National Security Council Secretary Rezaei in a bid to restart peace talks.
US Energy Secretary Wright said diesel exports from the Arabian Gulf were likely to increase and diesel prices would fall significantly, adding that China was likely to resume diesel exports.
Venezuela's oil revival is threatened by a skilled worker shortage, with energy executives in Venezuela warning they are struggling to recruit enough skilled workers to revive the country's oil sector, according to FT.
Spot gold was pressured after recent choppy price action and faded the post-FOMC knee-jerk uplift.
Copper futures stalled after their recent advances and alongside the overnight mixed risk sentiment.

CRYPTO

Bitcoin was pressured throughout the session with prices retreating beneath the USD 80,000 level.

NOTABLE ASIA-PAC HEADLINES

Hong Kong Monetary Authority maintained its base rate at 4.25%, as expected, in lockstep with the Fed.
RBNZ Governor Breman said the chances of a December rate hike are high.

GEOPOLITICS

RUSSIA-UKRAINE

Russia reportedly downed most of the 613 drones that headed towards Moscow overnight.
Russian President Putin's aide said Moscow is negotiating with Washington regarding lifting sanctions against the Russian Direct Investment Fund.
Russian Embassy in Berlin told RIA Novosti that German authorities have set a course for a large-scale militarisation of the country, increasing the size of their armed forces and spending huge funds on defence.

OTHER

Japan's Coast Guard said North Korea fired a suspected ballistic missile, which appeared to have landed outside of Japan's exclusive economic zone, while a media report noted that North Korea fired around 10 missiles.
South Korea's Defence Ministry said North Korea's deployment of older weapon systems near the border appears to be performative.