Fed speak dominates the tape, Qatar appears to have secured two weeks for diplomatic efforts - Newsquawk EU Market Open

• Qatar says it has secured "at least two weeks" for diplomatic efforts between the US and Iran, though significant differences remain.
• Fed's Bowman said there is still work to do, but the cost of additional tightening must be weighed. Paulson said further gradual hikes are appropriate. Goolsbee said inflation was borderline disturbing.
• APAC stocks were primarily firmer, shrugging off the Wall St handover where CPI and Fed speak weighed. European futures point to a firmer open, Euro Stoxx 50 +0.8%.
• DXY held onto Tuesday's CPI/Fed driven gains. EUR/USD beneath 1.12, Cable below 1.34 and USD/JPY around 159.00.
• Fixed income was subdued on the above points, and as energy benchmarks found some modest reprieve amid continued Iranian pushback.
• Looking ahead, highlights include German Final Inflation (Oct), Japanese PPI (Oct), OPEC MOMR, Speakers including ECB's Cipollone & Lagarde, Supply from Germany & UK. Note, today is US Veterans Day.

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LOOKING AHEAD

• Holiday: US Veterans Day; Canadian Remembrance Day.
• Highlights include German Final Inflation (Oct), Japanese PPI (Oct), OPEC MOMR, Speakers including ECB's Cipollone & Lagarde, Supply from Germany & UK.
• Click for the Newsquawk Week Ahead.

IRAN CONFLICT

• US Treasury Secretary Bessent was moved to a military base after Iranian threats, according to the NYT.
• Qatari PM Al Thani told G7 Foreign Ministers in Paris that Doha had secured 'at least two weeks' to pursue diplomatic efforts aimed at reaching an understanding between Washington and Tehran, although he also stated that significant differences remained between the two sides, with several key issues still unresolved, according to Jerusalem Post citing diplomatic sources.
• Iran's Foreign Minister Araghchi said in a letter to the UN Secretary-General, UNSC President and IAEA chief that Iran condemned the US announcement of the Rewards for Justice programme, which offers USD 20mln for information regarding Iran's nuclear programme, according to IRNA.
• Iran's Foreign Ministry designated Argentina's Navy and Air Force as terrorist organisations, while it stated the designation was in retaliation for Argentina's move against the IRGC.
• IRGC Rasulullah Commander said the production of missiles and UAV/drones did not stop even during the war and that they have surprises that must be displayed in the field, while he added that they have obtained several new technologies.
• Iran is expected to continue trying to carry out attacks against US military bases in Britain, while the US army continues to move planes and expensive assets between the bases, according to an assessment cited by N12's Assaf Rosenzweig.
• IRGC said the third oil tanker using an unauthorised route through the Strait of Hormuz exploded on Tuesday afternoon after hitting a naval mine, according to Tasnim. It also commented that following the destruction of US military radar and coastal navigation aid systems in the southern Strait of Hormuz, tankers were taking multiple risks by attempting to use the unauthorised route, where tankers had been hit by naval mines.
• UKMTO said it received a report of an incident involving a tanker in the Strait of Hormuz, adding that the status of the crew, damage assessment and environmental impacts were unknown at the time.
• Syria is reportedly weighing sending troops to support Saudi Arabia's war against the Houthis, according to the New York Times.

US TRADE

EQUITIES

• US stocks were lower, but closed off worst levels, with the Nasdaq and Russell 2000 underperforming amid the hawkish Fed repricing, while Nvidia (NVDA) extended its recent losses amid reports surrounding CEO Jensen Huang's affair with an alleged Chinese spy. Sectors were mixed, with Technology the laggard, while Financials and Consumer Discretionary outperformed. The main focus was the sharp hawkish repricing following Fed Governor Waller's comments and the hotter-than-expected October CPI report, reigniting the debate around a potential 50bps Fed hike in December. Waller said further tightening is needed sooner rather than later and suggested a half-point hike may be warranted if October core CPI came in around 0.3% or higher. The subsequent report showed core CPI rising 0.3% M/M, above the 0.2% forecast, while headline CPI rose 0.4%, also above expectations. As such, money markets were pricing around 27.5bps of tightening in December, implying a fully priced 25bps hike and a 10% probability of a 50bps move. Fed's Logan added to the hawkish rhetoric, calling for at least two further 25bps hikes, while Schmid described current policy as fairly accommodative. However, Bowman was more dovish than peers and stated there is still more work to do, but financial conditions have tightened, and the Fed must weigh the costs of additional policy tightening.
• SPX -0.36% at 7,523, NDX -0.60% at 27,750, DJI -0.29% at 52,237, RUT -0.65% at 2,822.
• Click here for a detailed summary.

TARIFFS/TRADE

• US Treasury Secretary Bessent said US President Trump and Chinese President Xi will meet next week in Shenzhen and then again in Miami, while he repeated his call for rebalancing bilateral economic ties and said he plans to join Trump for the trip to Shenzhen. Bessent also said the US was setting up a direct China channel for AI incident alerts and expects talks with China on handling AI models pre-release, adding that the US aim is to de-risk, not decouple, with China.
• US Ambassador to China Perdue said the Nvidia (NVDA) affair shows that the US should stay diligent on China, while he described China's licensing regime for magnets as hugely escalatory and said the US was not getting the flow of magnets that it wants from China. Perdue also noted that the US and Chinese militaries are beginning to talk again, as well as noted that China said it will firmly safeguard the multilateral trading system and uphold the most favoured nation treatment.
• US Commerce Secretary Lutnick was sent a highly classified memo warning of Nvidia (NVDA) CEO Huang's relationship with a suspected Chinese spy, according to multiple sources cited by Axios.
• A Chinese university with military ties purchased Nvidia (NVDA) H200 chips last month despite being on the US blacklist, according to reports citing procurement records.
• Canadian PM Carney said he had spoken briefly with US President Trump over the weekend and could meet him later this month at the Asian summits.

NOTABLE HEADLINES

• Fed's Bowman (voter) said persistent inflation and firming labour conditions suggest there is still work to do, while she added that financial conditions have tightened and the Fed must weigh the costs of additional policy tightening. Bowman stated that bringing inflation down remains a priority and that core PCE likely rose 3.3% in October on energy prices and AI-related demand. Furthermore, Bowman said the fact that inflation is not on a downward trend should give a pause and that officials need to think about the pace and timeline to address it, noting the Fed cut rates gradually last year and then paused before resuming, in the same way that it may work to address inflation in the coming months.
• Fed's Paulson (2026 voter) said the Fed will move more aggressively if the inflation landscape worsens, adding that further gradual rate hikes are appropriate given high inflation and the exact path of policy depends on how the economy evolves. Paulson said monetary policy needs to be somewhat restrictive, CPI data showed inflation remains a problem and underlying inflation is stuck between 2.5% and 3%. Furthermore, she stated the economy is stronger than expected with a robust and stable job market, while the impact of AI and energy on inflation is hard to gauge and risks to the inflation outlook are high.
• Fed's Goolsbee (2027 voter) said on PBS NewsHour that CPI was bordering on disturbing and they have real issues on their hands that they are going to have to deal with. Goolsbee said the most troubling aspect is that services inflation is not coming down, with inflation both cost-side and demand-side driven, and he fears overall overheating in prices across a range of goods. He also stated the job market is steady and stable, that it would be a major concern if inflation gets built into expectations, and that everything is always on the table.
• Fed's Schmid (2028 voter) said there are concerning trends in prices underneath the energy story, while he didn't think the rate was restrictive last year and believes it is fairly accommodative today.
• WSJ's Timiraos said that on the same day Fed's Waller and Logan opened the door to faster hikes, Bowman struck a cautious note, saying the benefit of more tightening has to be carefully weighed against its costs given recent market developments.
• US House backed a motion that derails the impeachment of Defence Secretary Hegseth, while US President Trump posted on Truth Social that the Democrats' attempt to impeach Secretary of War Hegseth had miserably failed.
• OpenAI has told investors that revenue jumped 50% to around USD 10bln in Q3, rebounding from a period of slower growth, while it reported a USD 567mln operating loss.
• Anthropic (ANT) unveiled office tools ahead of its IPO, rivalling Microsoft (MSFT), according to reports, while FT reported that Anthropic bankers are preparing to raise the IPO valuation to USD 1.5tln or above.

APAC TRADE

EQUITIES

• APAC stocks were predominantly in the green as the region mostly shrugged off the subdued handover from Wall St, where all major indices were pressured as the dollar and yields gained on hawkish Fed rhetoric and hotter-than-expected CPI data. The inflation numbers and Fed speak boosted hawkish rate hike bets, with money markets fully pricing in a December rate hike and about a 10% probability for a greater 50bps move.
• ASX 200 eked out slight gains in range-bound trade as the rebound in tech was counterbalanced by losses in the top-weighted financial sector following earnings from Australia's largest lender, CBA, despite reporting an 8% increase in Q1 unaudited net profit.
• Nikkei 225 continued to benefit alongside the global tech recovery despite weakness in SoftBank shares after it posted a H1 net loss of JPY 768bln.
• KOSPI clawed back initial losses and outperformed its regional peers, while the Korea Exchange activated a sidecar on the Kosdaq amid the broad resurgence.
• Hang Seng and Shanghai Comp were mixed, with the Hong Kong benchmark pressured amid weakness in biotech and EV makers, while the mainland gradually recouped early losses to trade in the green.
• US equity futures steadily rebounded from the prior day's lacklustre performance.
• European equity futures indicate a higher cash market open with Euro Stoxx 50 futures up 0.8% after the cash market closed with gains of 0.6% on Tuesday.

FX

• DXY held on to the prior day's notable gains, owing to hot inflation data and hawkish remarks from Fed's Waller (voter). Fed's Bowman (voter) said persistent inflation and firming labour conditions suggest there is still work to do, but added that financial conditions have tightened and the Fed must weigh the costs of additional policy tightening. Furthermore, Fed's Paulson (2026 voter) noted that further gradual rate hikes are appropriate given high inflation, and Fed's Goolsbee (2027 voter) suggested inflation was borderline disturbing and that they have real issues on their hands, while they are going to have to deal with it.
• EUR/USD lingered beneath the 1.1200 handle after suffering against the firmer buck and with comments from ECB officials doing little to spur the currency, despite Lane stating that it would be prudent to hike in December if incoming data do not materially change the outlook and with both Kazaks and Nagel suggesting the likelihood of a December rate hike.
• GBP/USD remained at sub-1.3400 territory following the prior day's slide owing to the dollar strength, while it was reported that PM Burnham won't accept a dynamic alignment of financial services regulations with the EU, backing the City of London's independence from Brussels and showing the limits of his ambitions for closer ties.
• USD/JPY kept afloat and approached just shy of the 159.00 level in the aftermath of the firmer-than-expected US CPI data and hawkish Fed speak.
• Antipodeans partially nursed some of the recent losses, although the rebound was limited in the absence of any major pertinent drivers and with a lack of tier-1 data from the region.
• PBoC set USD/CNY midpoint at 6.7191 vs exp. 6.6855 (prev. 6.7167).
• BoC October Meeting Minutes stated regarding the path forward that the BoC recognised uncertainty did not mean inaction, but they would need to proceed carefully, while they agreed that monetary policy can prevent energy prices from leading to generalised inflation and acknowledged that inflation expectations may have become more sensitive to recent price changes.

FIXED INCOME

• 10yr UST futures remained subdued as participants digested the recent hawkish Fed rhetoric and firmer-than-expected CPI data, which boosted rate hike bets, with money markets fully pricing in a hike in December of at least 25bps and an outside chance for a greater 50bps move.
• Bund futures were subdued after retreating yesterday and with demand not helped by looming supply.
• 10yr JGB futures tracked the downside in global peers, with demand not helped by a rebound in Japanese stocks and the absence of any tier-1 data releases.

COMMODITIES

• Crude futures found some slight reprieve from the recent selling pressure after declining again yesterday amid continued optimism regarding US-Iran peace talks after a report that claimed Iran agreed to US demands to reduce its highly enriched uranium levels, although there was some pushback from Iran's top security official Rezaei, who stated that US claims of ongoing Iran negotiations and a Qatar meeting are false.
• EIA STEO (November 2026): 2026 World Oil Demand: 102.4mln bpd (prev. 102.4mln bpd); 2027 104.4mln bpd (prev. 104.6mln bpd), while it saw World Oil Production in 2026 at 101.7mln bpd (prev. 101.1mln bpd) and in 2027 at 108.4mln bpd (prev. 109.6mln bpd).
• US official said Russian diesel was on the water and heading to market, adding that this would ease fuel prices for Americans.
• Iranian Deputy Oil Minister said the SPD14D platform at South Pars caught fire, but added that the situation was under control and the cause was being investigated.
• Spot gold gradually rebounded from the prior day's trough but remained beneath the USD 4,100/oz level after sliding alongside the recent dollar strength and firmer-than-expected CPI data.
• Copper futures edged higher as the region ultimately shrugged off the downbeat mood.

CRYPTO

• Bitcoin traded indecisively with prices oscillating through the USD 73,500 level during the session.

NOTABLE ASIA-PAC HEADLINES

• China's NDRC said it will boost financial risk control for Belt and Road Initiative projects and will expand BRI cooperation in emerging sectors.

GEOPOLITICS

RUSSIA-UKRAINE

• Ukrainian President Zelensky said he is very happy with recent US messages.
• Ukraine's Foreign Minister said Ukraine was awaiting Russia's response to its Black Sea ceasefire proposals and was not particularly optimistic about progress. Furthermore, he urged US Secretary of State Rubio to accelerate the delivery of air-defence interceptors amid Russian attacks on energy infrastructure.
• Russian Deputy Foreign Minister said it was too early to assess the negotiations in Abu Dhabi, while the talks in Abu Dhabi today will start at 08:00GMT/03:00EST.
• Russia shot down 92 drones over the Leningrad region early on Wednesday, while it was also reported that drones hit the Ust-Luga Baltic seaport in the region.
• European Council President Costa said in a letter to German Chancellor Merz that he would also make time for a broad discussion on Ukraine at the upcoming informal European Council in Dublin.

OTHER

• US Ambassador to China said President Trump is open to nuclear talks with Russian President Putin and Chinese President Xi, adding that the US is concerned about China indirectly benefiting from the Iran war and is not getting enough cooperation from China on Iran.
• Taiwan's Defence Ministry said two Chinese PLA aircraft crossed the Taiwan Strait median line into Taiwan's southwest air defence identification zone.

EU/UK

NOTABLE HEADLINES

• UK PM Burnham won't accept dynamic alignment of financial services regulations with the EU, backing the City of London's independence from Brussels but nonetheless showing the limits of his ambitions for a much closer relationship, according to Bloomberg's Wickham.
• NIESR sees UK inflation overshooting the Bank of England's target for the next four years.
• ECB Chief Economist Lane said framework guidance is more effective than rate forward guidance when policy rates are away from the effective lower bound, while Lane warned of a high bar on directional forward guidance and stressed a very high premium on consensus, noting it would be difficult with dots, while he said it was important that the ECB has an instrument for multiple equilibria in the bond market. Lane also noted it was informative that underlying inflation hasn't moved yet, which reflects the usual delayed response, adding that underlying inflation is a guide to one-year-ahead inflation. Furthermore, he said energy prices are already reversing and, if that continues, headline inflation could fall while underlying inflation climbs, adding that people should watch if inflation comes in stronger or weaker than projections.