US stocks rallied heading into big tech earnings, despite quiet newsflow - Newsquawk Asia-Pac Market Open

• US stocks gained in risk-on trade despite the very light newsflow to start the week amid the Fed blackout and lack of US data given the government shutdown. Nonetheless, headline action was sparse and comments from US President Trump largely echoed recent remarks in which he reaffirmed he will meet with Chinese President Xi and noted that if a deal is not made with China, they will face 100% tariffs (existing tariffs + 100% additional tariff threat) on November 1st.
• USD eked slight gains in very light newsflow amid the Fed blackout period and with a lack of US data given the ongoing government shutdown, although, White House Economic adviser Hassett thinks the shutdown is likely to end sometime this week, but did not give any reason why, and added if the shutdown doesn't end, the White House is to look at stronger measures. In terms of US/China trade, President Trump remarked that China has been respectful of them, and potential 155% tariffs will come on November 1st unless they make a deal, while he reaffirmed he will be meeting with Chinese President Xi and thinks they'll end up with a strong trade deal.
• Looking ahead, highlights include New Zealand Trade Data & Credit Card Spending, Comments from RBA's Jones and ECB's Nagel, Supply from Australia & Japan, Indian Markets will be closed aside from a special one-hour trading session amid an official holiday.

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LOOKING AHEAD

• Highlights include New Zealand Trade Data & Credit Card Spending, Comments from RBA's Jones and ECB's Nagel, Supply from Australia & Japan, Indian Markets will be closed aside from a special one-hour trading session amid an official holiday.
• Click for the Newsquawk Week Ahead.

US TRADE

• US stocks gained in risk-on trade despite the very light newsflow to start the week amid the Fed blackout and lack of US data given the government shutdown. Nonetheless, headline action was sparse and comments from US President Trump largely echoed recent remarks in which he reaffirmed he will meet with Chinese President Xi and noted that if a deal is not made with China, they will face 100% tariffs (existing tariffs + 100% additional tariff threat) on November 1st.
• SPX +1.07% at 6,735, NDX +1.30% at 25,141, DJI +1.12% at 46,707, RUT +1.95% at 2,500.
• Click here for a detailed summary.

TARIFFS/TRADE

• US President Trump said China has been respectful of them and noted on China trade, that potential 155% tariffs will come November 1st unless they make a deal, while he is meeting with Chinese President Xi in South Korea.
• US President Trump said could threaten China on other things, including airplanes and will go to China sometime fairly early next year and have it sort of set. Trump added that the US and China have to thrive together and he wants China to buy soybeans.
• White House Economic adviser Hassett expects US Treasury Secretary Bessent’s meeting with China to clear up a misunderstanding, according to CNBC.
• US President Trump and Australian PM Albanese signed a critical minerals agreement. There were later comments from President Trump who said there has been games with other countries, but no games with Australia, while Australian PM Albanese said part of deal includes projects over the next 6 months between US and Australia, including processing.
• White House Fact Sheet on Critical Minerals Deal with Australia stated that both governments are to invest over USD 3bln in the next six months and recoverable resources are estimated at USD 53bln.
• South Korean Presidential Office denied a report regarding a tariff MOU with the US.

NOTABLE HEADLINES

• White House Economic adviser Hassett said he thinks the shutdown likely to end sometime this week, but if the shutdown doesn't end, the White House is to look at stronger measures.
• US appeals court allowed US President Trump to send troops to Portland, Oregon.

FX

• USD eked slight gains in very light newsflow amid the Fed blackout period and with a lack of US data given the ongoing government shutdown, although, White House Economic adviser Hassett thinks the shutdown is likely to end sometime this week, but did not give any reason why, and added if the shutdown doesn't end, the White House is to look at stronger measures. In terms of US/China trade, President Trump remarked that China has been respectful of them, and potential 155% tariffs will come on November 1st unless they make a deal, while he reaffirmed he will be meeting with Chinese President Xi and thinks they'll end up with a strong trade deal.
• EUR marginally softened against the dollar, albeit with the downside limited and the single currency contained with tight parameters, while there were some ECB comments including from Nagel who said they can remain in wait-and-see mode on rates.
• GBP softened with GBP/USD testing the 1.3400 level to the downside in the absence of any UK-specific catalysts.
• JPY traded indecisive with USD/JPY ultimately little changed on the day at the 150.00 handle following confirmation of an LDP-Ishin coalition which puts LDP leader Takaichi on course to win the premiership vote in parliament on Tuesday.

FIXED INCOME

• T-notes eked mild gains in quiet trade with the Fed on a blackout and as focus remained on US-China trade rhetoric.

COMMODITIES

• Oil prices were choppy to start the week and settled relatively flat amid a very light newsflow day.
• Kazakhstan Energy Ministry said suspension of operations at the Orenburg gas processing plant did not affect gas supplies to Kazakhstan, while gas reception at the Orenburg gas processing plant is expected to resume soon.
• Kazakhstan's Karachaganak oil and gas condensate field cut output by up to 30% following the Ukrainian drone attack on a gas plant in Russia, according to Reuters citing sources.
• Iraqi PM's office said Iraq will sign an agreement with US Excelerate Energy (EE) to supply US gas to Iraq.
• European Council agreed to phase out Russian gas imports and are aiming for a complete ban by January 2028.

GEOPOLITICAL

MIDDLE EAST

• US President Trump said the Hamas situation will be taken care of quickly and lots of steps are being taken to maintain the ceasefire. Trump stated they are going to eradicate Hamas if they have to, but haven't told Israel to go back in yet, and will give Hamas a chance.
• Iran's Supreme Leader Khamenei tells US President Trump "keep dreaming" in response to his claim that the US destroyed the Iranian nuclear industry.

RUSSIA-UKRAINE

• US President Trump said on the war in Ukraine, that he thinks they'll get there, while he added that Ukraine could still win it, but doesn't think they will and noted anything could happen. Furthermore, Trump said they are in the process of trying to make a deal and that he talked to Russian President Putin about attacks on civilians and said to stop.
• US Secretary of State Rubio held a call with Russian Foreign Minister Lavrov, while Lavrov said talks focused on steps to implement the understandings reached during the call between Trump and Putin. It was also reported that Rubio emphasised the importance of upcoming engagements as an opportunity to collaborate on resolving the war in Ukraine.
• US is reportedly stalling on the G7 plan to expand use of Russian assets, according to Bloomberg.
• Russia's Kremlin said there's a mixed signal from Ukraine regarding peace, while it added that full work is only just the beginning on the Putin-Trump summit in Budapest.
• EU's Kallas said the EU expects to approve 19th sanctions package against Russia on October 23rd and that it will not be the last one, while the European Commission has been invited to propose additional measures to better support Ukraine's energy security.

ASIA-PAC

NOTABLE HEADLINES

• BoJ is reportedly likely to maintain the view that the economy is on course for moderate recovery, despite headwinds from US tariffs, and may slightly revise up economic growth forecast for FY25 at the October meeting, according to Reuters sources.
• Japan's LDP leader Takaichi and Innovation Party’s Yoshimura signed an agreement to form a coalition government, as expected. It was also reported that Takaichi intends to appoint Toshimitsu Motegi as Foreign Minister and its looking to appoint Minoru Kihara as Chief Cabinet Secretary.

EU/UK

NOTABLE HEADLINES

• ECB's Nagel said they can remain in wait-and-see mode on rates.
• ECB's Schnabel said that the EUR's global position is strong and should be strengthened.

DATA RECAP

• German Producer Prices MM (Sep) -0.1% vs Exp. 0.0% (Prev. -0.5%)
• German Producer Prices YY (Sep) -1.7% vs. Exp. -1.5% (Prev. -2.2%)