US stocks gained despite continued upside in long-term Treasury yields, although some shorter-end yields were lower - Newsquawk Daily Asia-Pac Market Open

US stocks gained on Monday with all major indices closing higher, and broad momentum was seen across sectors, in which nearly all gained aside from Real Estate, while Materials, Communication Services and Health Care led the advances. Treasuries sold off, and the curve bear steepened, with long-end yields leading the move higher. There was little reaction to the US ISM Services PMI report, which fell marginally below forecasts as activity measures slowed M/M, while Prices accelerated and Employment returned to expansionary territory. The rise in yields supported the Dollar, while the Euro underperformed amid lingering French fiscal concerns and further protests, and Spain's PM called for a snap election.
USD traded firmer to the detriment of most G10 FX peers, with currency-specific newsflow light to start the week, and there was little move to a mixed ISM Services report, while NZD, EUR, and CHF were the G10 laggards, but Aussie was the clear outperformer and managed to eke out gains against the greenback.
Looking ahead, highlights include Australian Westpac Consumer Sentiment & ANZ Job Advertisements, Philippines CPI, Thailand CPI, Comments from BoJ Governor Ueda, Supply from Japan, China Holiday Closure.

More Newsquawk in 2 steps:

1. Subscribe to the free premarket movers reports

2. Trial Newsquawk’s premium real-time audio news squawk box for 7 days

LOOKING AHEAD

Highlights include Australian Westpac Consumer Sentiment & ANZ Job Advertisements, Philippines CPI, Thailand CPI, Comments from BoJ Governor Ueda, Supply from Japan, China Holiday Closure.
Click for the Newsquawk Week Ahead.

IRAN CONFLICT

US President Trump said he is always open to direct talks with Iran and that it will all work out regarding Saudis and Houthis, while he warned that Iran will suffer greatly if it has combat drones in the UK, but thinks the UK is still safe for US forces.
US VP Vance said he is looking at procedures in the US following the FlyDubai incident, adding that he has not seen anything conclusive yet regarding ties to Iran.
US Treasury Secretary Bessent said Operation Economic Outcast is delivering results and that Iran loaded zero crude oil onto tankers last month, while he added that Iran’s top security official has admitted the country is facing one of the most difficult periods in its history.
US Treasury said banks may be sanctioned for doing business with Iran, while it removed some Iraq and Venezuela individuals from sanctions.
US official told Semafor there is a real possibility that Iran may want to inflict some pain on US President Trump before the midterms, adding that Iran may do something in the next couple of weeks.
US official said the US is providing support to Saudi Arabia through planning, intelligence sharing and refuelling to counter Houthi attacks, according to Al Jazeera.
Iranian President Pezeshkian said negotiations are pointless with an enemy that assassinates and sanctions, adding that the US attacked three times after talks, according to Nour News.
Iranian Foreign Minister Araghchi reiterated the role of diplomacy, saying it will serve Iran's national interests and security.
Iranian Interior Minister heads to Doha for talks, travelling at the official invitation of his Qatari counterpart to meet Qatari officials, according to ISNA.
Iran's Secretary of the Supreme Council for Cyberspace claimed Iran has acquired technologies to disrupt or disable the Starlink service, saying the technologies are technically operational and ready.
Saudi Foreign Minister stated the Mecca Defence Alliance Committee said collective deterrence measures will confront attacks and those responsible, while the alliance reaffirmed commitment to confronting attacks against Saudi and holy sites.
Yemeni government forces spokesperson said forces have taken control of Bab al-Mandab and Al-Duqwa-Bab airport in western Taiz Governorate, according to Al Araby.
Yemeni government forces have seized the city of Mocha, Yemen, according to Al Jazeera citing Yemeni News.
Yemeni Houthis hit Saudi Arabia's Ras Tanura refinery, which has a capacity of 550k BPD, with missiles, while there were also reports of fires at Saudi Arabia's Rabigh refinery in Jeddah and massive fires in the Saudi oil export pipeline, according to Sabereen citing imagery.
Yemeni Houthi leader Mohammed al-Bukhaiti reportedly called for a truce and said "no one benefits from war", according to social media reports.
Yemeni Houthi spokesperson said in response to the Saudi aggression that they carried out three qualitative military operations using a large number of ballistic and cruise missiles and drones, in which it targeted King Khalid International Airport in Riyadh and the Aramco refinery in Rabigh, as well as Abha Airport, Khamis Mushait Air Base, the Aqifa camp in Asir, and other critical sites in Najran and Jizan. Furthermore, it warned all international airlines using Saudi airspace to cease their flights, as it has become an operations zone for their forces, with the exception of the sacred airspace over Mecca and Medina.
Explosions were heard north of Riyadh, according to Saberen News. Media sources also reported explosions in the Saudi capital and that flights were suspended at Riyadh Airport, according to Fars.
UKMTO said a tanker transiting inbound through the Strait of Hormuz was hailed by the IRGC and instructed to turn back or be targeted, while the incident occurred 11NM north of Khasab, Oman.
UKMTO also said it received a report of an incident within the Strait of Hormuz, where the captain of a tanker reported being struck by an unknown projectile.
UKMTO received time-late reports of an incident on October 3 in which a crude oil tanker was struck above the waterline by an unknown projectile and an incident on October 4 in which a crude oil tanker was struck by an unknown projectile.

US TRADE

US stocks gained on Monday with all major indices closing higher, and broad momentum was seen across sectors, in which nearly all gained aside from Real Estate, while Materials, Communication Services and Health Care led the advances. Treasuries sold off, and the curve bear steepened, with long-end yields leading the move higher. There was little reaction to the US ISM Services PMI report, which fell marginally below forecasts as activity measures slowed M/M, while Prices accelerated and Employment returned to expansionary territory. The rise in yields supported the Dollar, while the Euro underperformed amid lingering French fiscal concerns and further protests, and Spain's PM called for a snap election.
SPX +0.71% at 7,777, NDX +0.87% at 31,076, DJI +0.18% at 51,268, RUT +0.64% at 2,851.
Click here for a detailed summary.

TARIFFS/TRADE

US President Trump said he is in no rush to resume Canada trade talks.

DATA RECAP

US ISM Services PMI (Sep) 54.9 vs. Exp. 55.0 (Prev. 55.4)
US ISM Services New Orders (Sep) 59.8 vs. Exp. 60.3 (Prev. 60.9)
US ISM Services Prices (Sep) 74.0 vs. Exp. 73.3 (Prev. 72.6)
US ISM Services Business Activity (Sep) 56.5 (Prev. 61.7)
US ISM Services Employment (Sep) 50.1 vs. Exp. 48.8 (Prev. 47.8)
US S&P Global Services PMI Final (Sep) 58.8 vs. Exp. 58.7 (Prev. 58.7)
US S&P Global Composite PMI Final (Sep) 58.4 vs. Exp. 58.4 (Prev. 58.4)

FX

USD traded firmer to the detriment of most G10 FX peers, with currency-specific newsflow light to start the week, and there was little move to a mixed ISM Services report, while NZD, EUR, and CHF were the G10 laggards, but Aussie was the clear outperformer and managed to eke out gains against the greenback.
EUR was pressured amid fiscal and political woes, with French unions calling for a nationwide day of strikes on November 5th, while the Spanish PM called for a snap election.
GBP traded on both sides of the 1.3200 level against the buck amid choppy trade and quiet UK newsflow.
JPY saw two-way price action with initial strength amid constructive commentary from PM Takaichi, who essentially vowed fiscal discipline, although the currency was then pressured following a BBG report which noted that Japan’s GPIF did not discuss allocation at its September meeting, providing some disappointment as there was previous speculation that the GPIF could adjust its JGB allocation to the upper end of its 19-31% band from the current target of around 27%.

FIXED INCOME

T-notes settled lower after Treasury yields continued to move higher, with the curve bear steepening as the long end led the move, while there was no Fed speak to digest, and US data saw a mixed ISM Services PMI report, but ultimately had little impact on Treasury price action.

COMMODITIES

Oil prices ended the day in the red after a choppy session amid a slew of market-moving headlines, with initial upside after AFP reported that Saudi Arabia's East-West oil pipeline pumping reportedly halted after a new attack, although oil swiftly pared these initial moves as BBG cited sources that said East-West pipeline was flowing as normal.
US President Trump said Russian refinery strikes by Ukraine and US closures are driving up gas prices. It was also reported that Trump is expected to unveil a plan on red-dyed diesel on Monday to ease the use of the tax-exempt variety of diesel.
US DoE announced a USD 4.2bln investment to boost nuclear power and help lower energy costs in Pennsylvania and Ohio.
Russia's Kremlin said energy cooperation is being discussed in talks with US representatives.
Indian Foreign Minister said India is in talks with Russia and Ukraine to ensure safe passage of grain and fuel shipments from the Black Sea.
European Commission spokesperson said the Commission is ready to convene the Oil Coordination Group and Energy Security Working Group, adding that the EU faces a winter of very high energy prices.
Saudi Arabia's East-West oil pipeline pumping was reportedly halted after a new attack, according to AFP citing sources, with one source saying, "There was big damage and the pipeline stopped again". However, a separate report noted that the Saudi Arabia East-West pipeline was flowing as normal, according to Bloomberg citing sources.
Saudi Aramco CEO said pressure on the oil market will worsen until the Strait of Hormuz reopens, adding that refilling global oil stockpiles could take two years after the Strait reopens and that global oil releases provide only temporary relief for markets.
Iraq is reportedly looking for more oil tankers in an effort to control transit through the Strait of Hormuz, according to Bloomberg.
Kuwait Petroleum Corporation CEO said Kuwait's oil production is currently around 75% of pre-war levels.

GEOPOLITICAL

RUSSIA-UKRAINE

Russia's Kremlin warned that Ukraine will "pay the price" if it strikes Russian oil refineries, responding to comments from Ukrainian President Zelensky.

ASIA-PAC

NOTABLE HEADLINES

Japan's GPIF did not discuss allocation at its September meeting, according to Bloomberg.

EU/UK