US stocks rebounded ahead of CPI, while oil surged following US sanctions on Russian oil majors - Newsquawk Asia-Pac Market Open

• US stocks gained with the major indices rebounding from Wednesday's downside, while there wasn't a specific headline trigger for the advances, with further encouragement seen following confirmation of a Trump-Xi meeting for next Thursday. EV maker Tesla (TSLA) completely pared the losses incurred following its earnings report, which was received poorly by investors. Healthcare came under pressure after an update from Molina (MOH), which cut its profit guidance amid a rise in medical costs. Conversely, Quantum computing names were bid on suggestions that the US was mulling equity stakes, although Yahoo Finance reported that the administration is not necessarily considering taking equity stakes, with sources stating that companies have approached the White House with proposals, but any potential investment (possibly via warrants or loans) would aim for taxpayer returns and use leftover Chips Act funds. Meanwhile Energy names were higher amid gains in crude benchmarks, which surged after the US sanctioned Russian oil majors Rosneft and Lukoil over the Ukraine war.
• USD was ultimately little changed in risk-on trade and despite higher US yields, while the attention largely turns to the US CPI data on Friday.
• Looking ahead, highlights include Australian & Japanese Flash PMIs, Japanese National CPI & Leading Index, Supply from Australia.

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LOOKING AHEAD

• Highlights include Australian & Japanese Flash PMIs, Japanese National CPI & Leading Index, Supply from Australia.
• Click for the Newsquawk Week Ahead.

US TRADE

• US stocks gained with the major indices rebounding from Wednesday's downside, while there wasn't a specific headline trigger for the advances, with further encouragement seen following confirmation of a Trump-Xi meeting for next Thursday. EV maker Tesla (TSLA) completely pared the losses incurred following its earnings report, which was received poorly by investors. Healthcare came under pressure after an update from Molina (MOH), which cut its profit guidance amid a rise in medical costs. Conversely, Quantum computing names were bid on suggestions that the US was mulling equity stakes, although Yahoo Finance reported that the administration is not necessarily considering taking equity stakes, with sources stating that companies have approached the White House with proposals, but any potential investment (possibly via warrants or loans) would aim for taxpayer returns and use leftover Chips Act funds. Meanwhile, Energy names were higher amid gains in crude benchmarks, which surged after the US sanctioned Russian oil majors Rosneft and Lukoil over the Ukraine war.
• SPX +0.58% at 6,738, NDX +0.88% at 25,097, DJI +0.31% at 46,735, RUT +1.27% at 2,483.
• Click here for a detailed summary.

TARIFFS/TRADE

• US is to probe China's 2020 trade deal compliance, while an investigation could be announced on Friday, according to sources. The investigation could be announced as soon as Friday and would be filed by the USTR under Section 301 of the Trade Act, while NYT said the inquiry could pave the way for more tariffs on Chinese imports, although no such decision has yet been made.
• White House said regarding US President Trump's trip to Asia, that he will meet with Chinese President Xi on Thursday, Japanese PM on Tuesday and South Korea’s Leader on Wednesday. It was later reported that Trump said he thinks he will come out well from next Thursday's meeting with Xi.
• USTR Greer said regarding China trade, that it makes sense to talk, but added that they will see.
• China’s Commerce Ministry said Vice Premier He Lifeng will hold talks with the US regarding trade in Malaysia between October 24th-27th.
• French President Macron told the EU to consider using its strongest trade tool on China.
• US President Trump's administration is raising the tariff rate quota for Argentina to 80k metric tonnes of beef to reduce prices, as expected (from 20k tonnes).
• German Foreign Minister Wadephul plans to urge China to relax rare earth and semiconductor export restrictions on his trip to Beijing.
• Canadian PM Carney said if sectoral trade talks with the US do not make progress, Canada will do what is necessary to protect its workers. Furthermore, he said Canada will not allow unfair access to its markets if it does not have access to other markets and that they are not at that point presently.

NOTABLE HEADLINES

• US House Minority Leader Jeffries said conversations with Republicans have been limited and that President Trump is not giving GOP leaders permission to negotiate.
• US Senate rejected pay plan for some federal workers, according to Politico.
• A report that the administration is in talks for the government to take equity stakes in quantum computing companies is not necessarily something the Trump administration is considering, and what is under consideration could be warrants or loans and may not necessarily be with the companies mentioned in the article, according to Yahoo Finance citing sources. Furthermore, it was separately reported that the Trump administration is in early-stage conversations with quantum computing companies to discuss potential financial support, according to Bloomberg.

DATA RECAP

• US Existing Home Sales (Sep) 4.06M vs. Exp. 4.06M (Prev. 4.0M)
• US KC Fed Manufacturing (Oct) 15.0 (Prev. 4.0)
• US KC Fed Composite Index (Oct) 6.0 (Prev. 4.0)

FX

• USD was ultimately little changed in risk-on trade and despite higher US yields, while the attention largely turns to the US CPI data on Friday.
• EUR lacked conviction and traded on both sides of the 1.1600 level in relatively tight parameters before returning to flat territory.
• GBP weakened with the soft CPI earlier in the week still taking its toll, while BoE's Dhingra (Dove) spoke and warned that tariffs will lead to a reduction in overall growth but with minor downward price pressure in the medium term.
• JPY underperformed amid higher US yields and the heightened risk appetite, which offset the strength seen in the morning following reports that Japan's RENGO will be seeking wage hikes of 5% or more in 2026 Shunto negotiations, while participants now look ahead to the latest Japanese inflation data.
• SNB Minutes (Sep) stated that they discussed diverging interest rate developments in the US and EZ with experts, while the board concluded that the current implementation of monetary policy was appropriate under various scenarios.
• CBRT cut rates by 100bps to 39.50% (exp. 39.50%, prev. 40.50%), while he stated that the tight monetary policy stance, which will be maintained until price stability is achieved, will strengthen the disinflation process through demand, exchange rate, and expectation channels.

FIXED INCOME

• T-notes were lower across the curve in response to rallying oil prices while traders await US CPI on Friday.

COMMODITIES

• Oil prices rallied after the US sanctioned Russian oil majors Rosneft and Lukoil over the Ukraine war, triggering expectations that India will cut Russian crude imports to near zero, while Chinese state oil majors were said to suspend seaborne Russian oil purchases due to worries related to Western sanctions.
• Kuwait’s Oil Minister sees signs that oil demand is shifting towards the Gulf and Middle East regions, as well as noted that OPEC is ready to offset any shortage in the market by rolling back the output cuts.
• Chinese state oil majors suspend seaborne Russian oil purchases due to worries related to Western sanctions, according to Reuters citing sources.

GEOPOLITICAL

MIDDLE EAST

• US official said Israeli PM Netanyahu is walking a fine line with US President Trump and that Trump will punish Netanyahu if he spoils the Gaza deal.

RUSSIA-UKRAINE

• Ukrainian President Zelensky said the domestically manufactured missile capability is a range of 3000km, while he added that the plan for peace should begin with a ceasefire and negotiations should follow. It was separately reported that Zelensky said Ukraine will not recognise swaps on their territory, and noted it is not a swap when you exchange your territory with your territory, according to WSJ's Norman.
• Ukrainian President Zelensky said a ceasefire is a possibility and more pressure on Russia is needed, while he added they will not agree to territorial concessions. It was separately reported that Zelensky urged EU leaders to enhance Ukraine's long-range capabilities to counteract Russia and noted that Russian President Putin knows the course of war can change due to long-range weapons. Zelensky also said they would use a "significant part" of the frozen Russian assets, if made available, to purchase European weapons.
• EU's Costa said the bloc is committed to addressing Ukraine's financial needs for the next two years, including military and defence efforts.
• White House said a President Trump meeting with Russian President Putin is not completely off the table, while a meeting between Putin and Zelensky is also not off the table. Furthermore, it stated that Trump has not seen enough action from Russia toward peace, while he is increasingly frustrated and wants to see action, not just talk, to end the war.
• Russian President Putin said regarding a meeting with US President Trump, that Budapest was proposed by the US and the summit needs to be prepared, while he added that Russia wants to continue dialogue and it is most likely that Trump meant that the summit is postponed. Furthermore, he said new sanctions will not affect the Russian economy and that they are an attempt to put pressure on Russia.
• Russian Deputy Security Council Chair Medvedev stated that the US is a Russian opponent and that US President Trump is on a warpath, while he added that Trump’s actions are like an act of war.
• Two Russian jets reportedly violated NATO-member Lithuania's airspace for 18 seconds, according to the Lithuanian military.
• China's Commerce Ministry said regarding the EU's Russia-related sanctions, that it strongly opposes them and will take necessary measures to safeguard rights and interests, while it added that EU sanctions on Chinese firms violate the consensus between leaders and damage trade relations.

ASIA-PAC

NOTABLE HEADLINES

• China published the fourth plenum communique and approved the draft of the next five-year plan as the plenum ended, while it aims to boost trade innovation, further open markets and extend bilateral investment opportunities. Furthermore, China plans measures to stabilise the job market and is aiming for a 'big increase' in the level of tech self-reliance.
• Japanese Industry Minister Akazawa said rare earth metal bans could mean a reduction of production for Japanese car makers.
• Japan's RENGO said it will be seeking wage hikes of 5% or more in 2026 Shunto negotiations.

EU/UK

NOTABLE HEADLINES

• BoE's Dhingra said she expects US tariffs to lead to a reduction in overall growth with minor downward price pressure in the medium term.
• UK Chancellor Reeves is mulling raising income tax at next month's budget, according to The Guardian.

DATA RECAP

• EU Consumer Confid. Flash (Oct) -14.2 vs. Exp. -15.0 (Prev. -14.9)