Crude benchmarks gain on continued punchy IRGC rhetoric; European bourses are set for a lower open - Newsquawk EU Market Open

• APAC stocks were pressured and extended on losses throughout the session as AI and semiconductor names were sold, despite the gains on Wall Street.
• The Hang Seng and KOSPI led the declines, while the BoK held rates as expected.
• European equity futures indicate a negative cash market open with Euro Stoxx 50 futures down 0.6%.
• JPY strengthened on haven demand, while DXY softened and NZD lagged after cooler-than-expected CPI.
• Crude futures were firmer amid a flurry of Middle East headlines, while precious metals were pressured.
• Looking ahead, highlights include US Jobless Claims (Oct/17), CBRT Policy Announcement (Oct), SNB Minutes (Sep). Speakers include Riksbank’s Jansson. Supply from the UK and the US. Earnings from Lockheed Martin, Comcast, American Airlines, Blackstone, P&G, Valero Energy, Bloom Energy, Thales, L'Oreal.

SNAPSHOT

LOOKING AHEAD

• Highlights include US Jobless Claims (Oct/17), CBRT Policy Announcement (Oct), SNB Minutes (Sep). Speakers include Riksbank’s Jansson. Supply from the UK and the US. Earnings from Lockheed Martin, Comcast, American Airlines, Blackstone, P&G, Valero Energy, Bloom Energy, Thales, L'Oreal.
• Click for the Newsquawk Week in Focus.

US TRADE

EQUITIES

• US stocks gained with the Nasdaq outperforming, while NVIDIA's GTC keynote saw the Co. announce a raft of partnerships, including Google Cloud scaling NVIDIA Vera Rubin infrastructure to 960k GPUs, and outlined plans with supply chain partners to expand substrate and packaging capacity. Risk-on trade was seen after a US official said Russia accepted a US proposal for a trilateral meeting with Ukraine, although risk appetite was dented late in the session after US officials said the State Department is preparing ordered departures of some personnel at US embassies across the Gulf. On the earnings front, Elevance Health beat and raised its FY guidance, Danaher beat but cut its FY core sales growth outlook, Abbott announced plans to separate its Nutrition business, and Philip Morris guided FY EPS below expectations. After-hours, Meta beat on revenue with EPS hit by a litigation charge, Tesla topped EPS forecasts, IBM and Texas Instruments beat, while Lam Research fell despite beating.
• SPX +0.60% at 7,759, NDX +1.20% at 29,845, DJI +0.69% at 52,857, RUT +0.32% at 2,782.

NOTABLE HEADLINES

• US President Trump said he had a good meeting on cyber.
• US Treasury Secretary Bessent shrugs off ‘systemic’ AI risks at closed-door investor conference, FT reported.
• US authorises offloading cargo involving some blocked vessels. Authorising wind down activities, limited safety and environmental transactions, and the offloading of cargo involving certain persons or vessels blocked on October 21, 2026.

NOTABLE US EQUITY HEADLINES

• US President Trump said Apple (AAPL) is committing to purchase USD 100mln worth of Pennsylvania titanium for its new iPhone.
• SpaceX (SPCX) and Tesla (TSLA) are reportedly pushing for a merger deal by H1 2027, Bloomberg sources say; merger is reportedly intended to close before the end of US President Trump's term. The combined company would have an implied market value of about USD 3.7tln.
• Meta Platforms Inc (META) Q3 2026 (USD): EPS 3.83 (exp. 6.67), Revenue 64.6bln (exp. 63.31bln). Q3 includes a USD 9.89bln charge related to the teen mental health litigation agreement; excluding the charge, EPS would have been 7.40. Q4 revenue guidance 73-76bln (exp. 73.64bln); FY26 capex guidance 135-145bln (prev. 130-145bln). Announced new non-voting Class C shares, distributed one-for-one to Class A/B holders.
• Meta (META) must pay USD 25bln in penalties, a New Mexico judge ruled after jury found company misled consumers about privacy.
• Tesla (TSLA) Q3 2026 (USD): Adj. EPS 0.48 (exp. 0.45), Revenue 28.0bln (exp. 28.1bln). Gross margin 19.6% (exp. 17.8%). FCF 1.53bln (exp. -4.99bln). On the call, CEO Musk said the company is aiming to produce approximately 5mln vehicles annually by 2030, while FY capex guidance was revised to approximately USD 20bln (prev. USD 25bln).
• Lam Research (LRCX) Q1 2027 (USD): Adj. EPS 2.20 (exp. 2.18), Revenue 8.22bln (exp. 8.13bln). Q2 revenue outlook 8.2-9.0bln (exp. 8.533bln). On the call, said its preliminary CY27 wafer fabrication equipment outlook exceeds USD 200bln (exp. CY26 USD 150bln).
• International Business Machines (IBM) Q3 2026 (USD): Operating EPS 2.95 (exp. 2.86), Revenue 17.1bln (exp. 16.81bln); reaffirms FY revenue guidance; Raises outlook for full-year free cash flow.
• Texas Instruments (TXN) Q3 2026 (USD): EPS 2.62 (exp. 2.42), Revenue 6.06bln (exp. 5.92bln), Next Qtr. Rev. 5.8-6.3bln (exp. 5.75bln), Next Qtr. EPS 2.45-2.79 (exp. 2.30).

TRADE/TARIFFS

• Canadian PM Carney said he spoke to US President Trump on Wednesday for quite some time; he discussed a wide range of issues with US President Trump, including Iran.
• Canada and Ontario unveil joint CAD 9bln support package to help steel and auto sectors deal with US tariffs, and also boost critical minerals supply chain.

APAC TRADE

EQUITIES

• APAC stocks were pressured and extended on losses throughout the session despite the positive lead from Wall Street, as AI and semiconductor names were sold after Tesla cut capex guidance, Lam Research fell after-hours, and Meta's results stoked concerns over the financial strain of heavy AI investment. Middle East tensions also remained in focus, with the US preparing ordered departures at embassies across the Gulf and reports of renewed attacks on Saudi Arabia.
• ASX 200 was lower, with energy and retail stocks leading the declines as Nick Scali slumped after its profit warning and weighed on fellow retailers, although the index pared some of its earlier losses.
• Nikkei 225 extended on losses, with AI and semiconductor names such as Tokyo Electron, SoftBank Group, Ibiden and Fujikura pressured.
• KOSPI underperformed as concerns over investment in the AI value chain sparked a sell-off in chip stocks, with Samsung Electronics and SK Hynix both pressured, while Samsung Electro-Mechanics reversed the opening gains it saw on its NVIDIA tie-up. The BoK held rates unanimously, as expected, while Governor Shin said the recent stock market correction weighs on consumption.
• Hang Seng led the declines in the region with Lenovo and Hua Hong Semiconductor each down around 7% and CATL extending its losing streak to a seventh day, while the Shanghai Comp declined amid uncertainty over the Middle East, with semiconductor names sold.
• US equity futures were lower with the NQ underperforming amid the pressure in semiconductor names, while Bloomberg reported SpaceX and Tesla are pushing for a merger deal by H1 2027.
• European equity futures indicate a negative cash market open with Euro Stoxx 50 futures down 0.6%, after the cash market closed with gains of 1.5% on Wednesday.

FX

• DXY softened and drifted lower throughout the session, with the USD weakest against the JPY as US yields eased and Asian stocks slumped, while Middle East headlines remained in focus, including reports of Iranian missiles launched towards the Strait of Hormuz and the NYT reporting that the US and Israel have developed plans for renewed strikes on Iran after the US midterms.
• EUR/USD edged higher amid the softer dollar, with French unrest and the wider OAT-Bund spread still in focus ahead of Moody's review on Friday.
• GBP/USD was marginally firmer after Wednesday's gains on hotter-than-expected UK CPI.
• USD/JPY initially edged higher as elevated oil prices fuelled concerns over Japan's trade balance, before the JPY strengthened on haven demand as Asian stocks slumped and US yields eased.
• Antipodeans underperformed, with NZD/USD lagging after Q3 CPI came in cooler than expected, while AUD/USD gave back some of Wednesday's outperformance amid the risk-off mood.
• PBoC set USD/CNY midpoint at 6.7195 vs exp. 6.6756 (prev. 6.7172).

FIXED INCOME

• 10yr UST futures extended on gains throughout the session amid the risk-off tone in APAC, more than recovering Wednesday's late dip on reports of US ordered departures across the Gulf, while the 20yr bond auction tailed by 0.9bps.
• Bund futures were firmer in tandem with USTs, after Wednesday's losses when ECB's Kazaks said some more tightening might be necessary if inflation stays above target, while French 10yr yields rose above 5% for the first time in 24 years.
• 10yr JGB futures were firmer but off their highs, with the 10yr JGB yield briefly rising as higher oil prices stoked inflation concerns, while super-long bonds were supported.
• Australia sold AUD 150mln 2.0% 2035 I/L bond; b/c 3.47x (prev. 4.89x); Average yield 2.8373% (prev. 2.759%).
• US Treasury sold USD 13bln of 20-year bonds; tails 0.9bps. High Yield: 5.469% (prev. 5.420%, six-auction avg. 5.120%); WI: 5.460%. Tail: 0.9bps (prev. 2.0bps, six-auction avg. 0.2bps). Bid-to-Cover: 2.73x (prev. 2.57x, six-auction avg. 2.62x). Dealers: 10.3% (prev. 16.9%, six-auction avg. 11.9%). Directs: 31.6% (prev. 30.7%, six-auction avg. 22.9%). Indirects: 58.2% (prev. 52.5%, six-auction avg. 65.2%).

COMMODITIES

• Crude futures were firmer and gradually climbed throughout the session amid a flurry of Middle East headlines. This includes the IRGC Navy saying four vessels transferring oil cargoes were struck in the Persian Gulf and three others hit sea mines west of the Strait of Hormuz, reports of Iranian missiles launched towards the Strait of Hormuz, drones targeting Saudi Arabia's Eastern Province, and the NYT reporting that the US and Israel have developed plans for renewed strikes on Iran after the midterms. Elsewhere, EIA data on Wednesday showed a larger-than-expected crude draw.
• Spot gold was pressured despite the risk-off tone and softer USD, while silver underperformed.
• Copper futures declined alongside the weakness in regional equities.
• US waives Russian diesel tax record requirements for buyers.
• China and Russia agree to support firms to expand oil cooperation, Xinhua reported.
• Gulf Keystone Petroleum CEO expects gross output in Iraqi Kurdistan's Shaikan oilfield to increase to over 90k BPD from about 45k BPD by 2030 if drilling commences next year. Merger with Shamaran Petroleum to double Gulf Keystone's working interest production to 53k BPD of oil, up from 28k BPD. Hamrin oil field in Iraq estimated to have about 7bln bbls of oil in place, of which 10-15%, or 0.5-1bln bbls, is recoverable. CEO expects there to be other opportunities in Iraq, which company will take on merit.
• US posted license for Lukoil international GMBH sale talks.
• IRGC said Saudi and UAE pipelines cannot replace the Strait of Hormuz and Hormuz Strait has no alternative for oil transit, reported SNN.
• Exxon (XOM) shuts catalytic reformer at Joliet, Illinois refinery (275k BPD).

CRYPTO

• Bitcoin and Ethereum were lower.

CENTRAL BANKS

• BoJ's October lending survey: Corporate loan demand DI rose to +3 (prev. -1), led by small firms (+5), while banks' lending stance DI for large firms remained unchanged at +3 and corporate loan margins continued to narrow.
• BoK left its rate unchanged at 3.0% as expected. BoK said today's rate decision was unanimous, while the timing and pace of further rate hikes will depend on inflation, economic conditions and financial stability. It is essential to assess domestic and external risks and the impact of the previous two rate hikes. Expects inflation to remain above its target for an extended period. Stock price volatility has increased amid concerns over slowing semiconductor sector profitability and investment. Financial imbalances related to the housing market and household debt require continued attention. Expects exports and investment to sustain strong growth.
• BoK Governor Shin said the recent stock market correction weighs on consumption, while a strengthening won likely helps boost consumption, Yonhap reported.
• New Zealand CPI (Q3 QQ) 0.7% vs. Exp. 0.8% (Prev. 1.5%); Y/Y 3.7% vs Exp. 3.8% (Prev. 4.1%).

DATA RECAP

• Japanese Stock Investment by Foreigners (Oct/17) -66.5B (Prev. 3545.5B).
• Japanese Foreign Bond Investment (Oct/17) -161.6B (Prev. -339.9B).

GEOPOLITICS

RUSSIA-UKRAINE

• A drone struck energy infrastructure in Ukraine's Poltava region near Kremenchuk, according to a local official.
• US President Trump said they are the closest they've ever been to settling Ukraine/Russia war.
• Ukrainian President Zelensky said supports US proposal for trilateral talks at level of negotiators as soon as possible; Ukraine hopes for meeting not later than early November; Meeting could discuss peace and possible leaders’ summit.
• US envoy Witkoff said will continue with trilateral talks between the US, Russia, and Ukraine at the technical level.

MIDDLE EAST

• Iran's IRGC Navy said four vessels transferring oil cargoes were struck in the Persian Gulf, while three other vessels hit sea mines yesterday west of the Strait of Hormuz, warning that US efforts to encourage passage could result in strikes on US bases.
• US President Trump said the US is doing very well against Iran, while Russian President Putin did not ask for anything in return over Hubbard.
• Flights have reportedly been suspended at Kuwait Airport, with no aircraft arrivals or departures recorded, Tasnim reported, citing unofficial sources.
• Yemeni forces reportedly targeted Saudi Arabia's Jeddah airport, suspending operations and leaving four aircraft circling overhead, SNN reported, citing Arab sources.
• Three drones were reportedly launched from Houthi-controlled areas north of Al-Dhale towards Aden, Yemen, Al Hadath reported, citing sources.
• US warplanes were reportedly flying over northern Iraq, Sabereen News reported.
• US and Israeli militaries have reportedly developed plans for renewed strikes on Iran after the US midterm elections, targeting energy infrastructure, nuclear facilities and missile and drone arsenals, NYT reported, citing sources.
• Saudi Civil Aviation said King Fahd Airport in Dammam was attacked on Wednesday evening, Al Arabiya reported.
• Saudi Arabia's Eastern Province was reportedly targeted by four drones, Naya for Iraq reported.
• A large explosion was reportedly detected in the Strait of Hormuz near an area where tankers have previously been struck, Fars reported, citing OSINT sources.
• Explosions were reportedly heard in Iran's port city of Sirik, with claims that US forces struck an anti-ship missile launcher targeting vessels in the Strait of Hormuz, Israel's Channel 12 reported.
• Iranian missiles were reportedly launched towards the Strait of Hormuz, Sabereen News reported.
• US military is reducing troop presence at bases across the Middle East, while the State Department is ordering further staff reductions at diplomatic posts amid regional threats and potential US military action against Iran, NBC News reported.
• Iran threatens to target US political figures if strikes resume, Fars News reported.
• US President Trump said on embassy staff told to depart, said don't know that they are; we continue to beat Iran. On Russia-Ukraine, said I have the right to do sanctions any day.
• In the past few hours, there has apparently been a change in the American position in favour of a pre-emptive strike on Iran, according to a Haaretz correspondent, citing White House sources. White House sources explain the change mainly due to the great weight that President Trump gave to the assessments and intelligence that Defense Secretary Pete Hegseth presented to him upon his return from the meeting with Prime Minister Netanyahu.
• US State Department issued an ordered departure for non-emergency US Government employees and their family members in Saudi Arabia only.
• Two people killed in drone attack on oil wells in Al-Shaybah, reported Fars.
• No impact on operations in Saudi Aramco's Shaybah oilfield following drone attack.
• Saudi's Energy Ministry said air defences intercept drone attempting to target the facility at Aramco's Shaybah oil field.
• Oil tanker being targeted near Iraqi territorial waters, reported Sabereen News.
• US officials said the US State Department is preparing to issue an ordered departure of some personnel and family members at US embassies across the Gulf. The move was due to a possible resumption of hostilities, particularly with Iran-aligned Houthi militia in Yemen.
• A few minutes ago, several explosions were heard from Sirik, Iran; the origin and nature of these sounds are still unknown, Fars reported.
• Saudi-led coalition said it is intercepting a drone launched towards the eastern region, Al Arabiya reported.
• Iran's Foreign Minister said Iran is prepared to give diplomacy another chance if they see strong evidence of a sincere desire by US to build trust and reach solution, but if US chooses war over diplomacy, it'll result in an even greater strategic failure.
• Houthi official said all negotiations have reached a deadlock because Saudi Arabia seeks to impose its demands on the Yemeni people, and this is not something that Sanaa will accept, Fars reported. This war has been imposed on us, and we will not accept that Saudi Arabia will delay and play with Yemen.
• Yemeni sources say Houthis launched a drone attack near Al-Dhaba oil port in Al-Shihr, Hadramawt, Sky News Arabia reported.
• US issues new Iran-related sanctions on entities and vessels.
• Several explosions in southern Saudi Arabia, reported SNN citing Arabic sources.
• Israeli helicopters flying in the sky of southern Syria, and continued transfer of military forces, equipment and deployment of early warning systems, are being carried out within the framework of preparation for a possible war with Iran, reported Mizan.
• Iran's parliamentary speaker Ghalibaf met with the Supreme Leader, and discussed the latest developments of the US-Israel war against Iran.

EU/UK

DATA RECAP

• European New Car Registrations (Sep YY) 9.3% (Prev. 4.5%).