US stocks were mixed and NDX outperformed on big tech strength - Newsquawk Asia-Pac Market Open

• US stocks ultimately closed mixed, with NDX outperforming while RUT and Dow lagged. Upside in the SPX and NDX was primarily due to the heavy cap tech stocks, with Amazon (AMZN) lifting the indices after it inked a USD 38bln deal with OpenAI to supply NVIDIA (NVDA) chips. However, breadth in the market was weak with only Consumer Discretionary, Tech and Utilities posting gains while the equal-weight S&P 500 (RSP) was sold. Elsewhere, T-notes settled flat in choppy trade, selling off from morning highs on a slew of IG deals, including a chunky USD 17.5bln from Google parent Alphabet.
• USD was marginally firmer as last week's themes of a divergent Fed on another cut in December and easing US-China relations loomed in the background, although capping USD's intraday upside was the October ISM Manufacturing PMI report, which saw the headline unexpectedly drop to 48.7 from 49.5, weighed by M/M decelerations in Production and New Orders. There were also several comments from Fed officials, including Goolsbee (2025 voter) who argued the threshold for cutting rates is higher than the last two meetings, but believes the place rates will settle is a fair bit below current levels, while Daly (2027 voter) supported last week's rate cut decision, but is keeping an open mind on December. Furthermore, Fed Governor Miran thinks the Fed is too restrictive and reiterated that there is no need to maintain restrictive policy for an extended period, while Fed Governor Cook said every meeting is live and policy is not on a pre-set path.
• Looking ahead, highlights include South Korean CPI, Japanese Final Manufacturing PMI, RBA Rate Decision & Quarterly Statement on Monetary Policy, RBA Governor Bullock Post-Meeting Press Conference.

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LOOKING AHEAD

• Highlights include South Korean CPI, Japanese Final Manufacturing PMI, RBA Rate Decision & Quarterly Statement on Monetary Policy, RBA Governor Bullock Post-Meeting Press Conference.
• Click for the Newsquawk Week Ahead.

US TRADE

• US stocks ultimately closed mixed, with NDX outperforming while RUT and Dow lagged. Upside in the SPX and NDX was primarily due to the heavy cap tech stocks, with Amazon (AMZN) lifting the indices after it inked a USD 38bln deal with OpenAI to supply NVIDIA (NVDA) chips. However, breadth in the market was weak with only Consumer Discretionary, Tech and Utilities posting gains while the equal-weight S&P 500 (RSP) was sold. Elsewhere, T-notes settled flat in choppy trade, selling off from morning highs on a slew of IG deals, including a chunky USD 17.5bln from Google parent Alphabet. In FX, the Dollar saw marginal gains, but CHF was the clear laggard after soft inflation metrics in Switzerland. Oil prices settled slightly firmer in choppy trade. Oil gapped higher after the OPEC+ agreement on Sunday, which hiked output by 137k BPD as expected in December, but is to pause in Q1. Meanwhile, US President Trump threatened strikes in Nigeria due to the killing of Christians in the country. Economic data saw a miss in the ISM Manufacturing PMI report, but the Atlanta Fed GDP upgraded its Q3 growth estimate in the wake of the data and is set to be updated on Wednesday after the ISM Services PMI report.
• SPX +0.17% at 6,852, NDX +0.44% at 25,973, DJI -0.48% at 47,337, RUT -0.33% at 2,471.
• Click here for a detailed summary.

TARIFFS/TRADE

• US Trump admin officials reportedly torpedoed NVIDIA's (NVDA) push to export AI chips to China, according to WSJ citing sources.
• US allowed Microsoft (MSFT) to ship NVIDIA (NVDA) AI chips to use in the UAE for the first time, according to FT.
• China is said to be seeking to buy US wheat for the first time in a year, according to Bloomberg sources.
• China’s MOFCOM said China and the EU held in-depth and constructive talks on mutual export control concerns, and both sides agreed to maintain dialogue to support stable and smooth supply chains between the economies.
• BoC Governor Macklem said US companies are largely paying for US tariffs.
• German Foreign Ministry spokesperson said Foreign Minister Wadephul spoke to his Chinese counterpart on the phone about economics and other topics.

NOTABLE HEADLINES

• Fed Governor Cook said every meeting is live and policy is not on a pre-set path, while she stated the recent cut was appropriate due to job market risks and risks to both sides of the mandate are elevated. Cook commented that the Fed uses a lot of alternative data, which are all important to take into account and that it is important to be timely and use the most current incoming data for the December rate decision.
• Fed Governor Miran approached this meeting as the last one, and thinks the Fed is too restrictive, while he reiterated that there is no need to maintain restrictive policy for an extended period. Miran added that a lot of factors drive financial markets and that it is a mistake to make conclusions about monetary policy from financial conditions alone.
• Fed's Goolsbee (2025 voter) said he believes the place rates will settle at is a fair bit below current levels and noted that the golden path for the economy is still possible. Goolsbee said he is uneasy with frontloading rate cuts and rates should come down with inflation, while he is undecided for what happens at the next Fed meeting and noted that the threshold for cutting rates is higher than the last two meetings, but also stated that rates can come down a "fair" amount and it is best to have rates fall alongside inflation, according to Yahoo.
• Fed's Daly (2027 voter) said she supported a rate cut and that a rate cut was appropriate, while she added that inflation is still above target, and need to get it down. Daly said the labour market has softened quite a bit and that they need to keep policy modestly restrictive. Furthermore, she has an open mind on December and stated that 50bps of cuts this year makes the Fed better positioned, while they need to make a decision that balances risks.
• US Democratic and Republican Senators are talking and focused on finding agreement on FY26 spending bills, with the hope being that a spending agreement could help to resolve the shutdown. Talks on spending continued over the weekend, and there is some optimism around a resolution, although there are no signs from Trump/Republicans around giving ground on extending the expiring premium Obamacare subsidies, according to Punchbowl.
• US Treasury expects to borrow USD 569bln in privately-held net marketable debt in the Oct-Dec quarter (prev. expected USD 590bln), assuming an end-Dec cash balance of USD 850bln (prev. 850bln).

DATA RECAP

• US S&P Global Manufacturing PMI Final (Oct) 52.5 (Prev. 52.2)
• US ISM Manufacturing PMI (Oct) 48.7 vs. Exp. 49.5 (Prev. 49.1)
• US ISM Manufacturing Prices Paid (Oct) 58.0 vs. Exp. 61.5 (Prev. 61.9)
• US ISM Manufacturing New Orders Index (Oct) 49.4 (Prev. 48.9)
• US ISM Manufacturing Employment Index (Oct) 46.0 (Prev. 45.3)

FX

• USD was marginally firmer as last week's themes of a divergent Fed on another cut in December and easing US-China relations loomed in the background, although capping USD's intraday upside was the October ISM Manufacturing PMI report, which saw the headline unexpectedly drop to 48.7 from 49.5, weighed by M/M decelerations in Production and New Orders. There were also several comments from Fed officials, including Goolsbee (2025 voter) who argued the threshold for cutting rates is higher than the last two meetings, but believes the place rates will settle is a fair bit below current levels, while Daly (2027 voter) supported last week's rate cut decision, but is keeping an open mind on December. Furthermore, Fed Governor Miran thinks the Fed is too restrictive and reiterated that there is no need to maintain restrictive policy for an extended period, while Fed Governor Cook said every meeting is live and policy is not on a pre-set path.
• EUR languished firmly beneath the 1.1600 handle with the single currency not helped by the latest Manufacturing PMI data from the bloc in which EU Manufacturing PMI matched estimates at the 50 level, but German, French and Italian Manufacturing PMIs all remained in contraction territory.
• GBP slightly softened against the dollar but remained in a relatively narrow range at the 1.3100 handle.
• JPY was lacklustre amid the extended weekend in Japan with USD/JPY lingering in 154.00 territory.
• Swiss CPI MM (Oct) -0.3% vs. Exp. -0.1% (Prev. -0.2%)
• Swiss CPI YY (Oct) 0.1% vs. Exp. 0.3% (Prev. 0.2%)

FIXED INCOME

• T-notes steepened after a slew of corporate issuances, including USD 17.5bln from Alphabet.

COMMODITIES

• Oil prices started the week with slight gains in what was a choppy session following the OPEC+ decision to continue a modest output increase of 137k bpd in December, but then pause in Q1. There were also comments from the OPEC Secretary-General that the group has been consistently and regularly returning barrels to the market, and they have the flexibility to alter, pause and reverse past decisions, as well as noted that they do not see an oil demand peak any time soon.
• OPEC Secretary-General said the group has been consistently and regularly returning barrels to the market, and they have the flexibility to alter, pause and reverse past decisions. OPEC Secretary-General said they are making sure to maintain supply-demand balance and the group still sees good signs for demand, while they see oil demand growth at 1.3mln BPD this year and are not expecting any surprises in the market. Furthermore, he said demand for oil and gas is here to stay, and they do not see an oil demand peak any time soon.
• OPEC+ decision on Sunday to keep oil output targets steady in Q1 came after Russia lobbied for the pause because it would struggle to increase exports due to Western sanctions, according to Reuters citing sources.
• US Deputy Energy Secretary does not think there will be an oil glut in 2026 and said need to make sure that energy prices are affordable, but that does not mean cheap. Furthermore, he said it is difficult to predict what the effects of sanctions will be, while he noted the US SPR has been depleted, and it is their job to try and replenish it.

GEOPOLITICAL

MIDDLE EAST

• Israel's IDF posted "CEASEFIRE VIOLATION" and stated that IDF troops were under immediate threat after the "yellow line" was crossed, while it added IDF soldiers remain deployed in accordance with the ceasefire agreement and will continue to operate to remove immediate threats.
• Iran’s Supreme Leader Khamenei said cooperation with the US is not possible as long as the US continues to support Israel, maintains military bases, and interferes in the region, according to state media. It was separately reported that Khamenei said the US sometimes says it is willing to cooperate with Iran, and if they stop supporting the Zionist regime, remove military bases from the area and stop interfering in the region, these matters could potentially be reviewed. However, he added that this isn't something foreseeable for now, nor for the near future.

RUSSIA-UKRAINE

• Russia said it struck Ukrainian gas facilities, a military airfield, and a Ukrainian military equipment repair base in large overnight strikes.

OTHER

• US President Trump's administration is reportedly planning a new mission in Mexico to target cartels, which would include US troops on the ground, though deployment is not imminent and activity would primarily be drone strikes to target drug laboratories and cartel leaders. Furthermore, it was stated that the US administration would prefer to coordinate with the Mexican government, but operating without such coordination has not been ruled out, according to NBC citing current and former officials.

ASIA-PAC

NOTABLE HEADLINES

• German Foreign Ministry spokesperson said Foreign Minister Wadephul spoke to his Chinese counterpart on the phone about economics and other topics.

EU/UK

NOTABLE HEADLINES

• ECB's Kazimir said there's no time or need to fine-tune or overengineer monetary policy, and he would not read too much into small deviations from a desired inflation path, while he sees the risk as broadly balanced for both the economy and inflation. Furthermore, he said the next move could be in either direction depending on the signals the ECB receives.
• ECB's Kocher said inflation expectations are relatively stably anchored and the current situation is comfortable for the ECB. Kocher said risks remain high, even if they haven't materialised or worsened, and there is no clear view of what will happen next on rates. Furthermore, he said the best policy is to wait and see, as well as noted that some Governing Council members believe there could be room for another rate cut in December, whilst others believe that the cycle is over.
• 17 EU nations sign Berlin Declaration on boosting industrial competitiveness, with Industry Ministers demanding a radical simplification of EU industrial regulations. Ministers seek stronger involvement of member states in the new European competitiveness fund and call for a stronger defence industry base that can also boost civilian sectors, while ministers call for new financial instruments to secure critical raw materials and seek carbon accounting rules to prevent third-country greenwashing.

DATA RECAP

• UK S&P Global Manufacturing PMI (Oct) 49.7 vs. Exp. 49.6 (Prev. 49.6)
• German HCOB Manufacturing PMI (Oct) 49.6 vs. Exp. 49.6 (Prev. 49.6)
• French HCOB Manufacturing PMI (Oct) 48.8 vs. Exp. 48.3 (Prev. 48.3)
• Italian HCOB Manufacturing PMI (Oct) 49.9 vs. Exp. 49.3 (Prev. 49.0)
• Spanish HCOB Manufacturing PMI (Oct) 52.1 vs. Exp. 51.7 (Prev. 51.5)
• EU HCOB Manufacturing Final PMI (Oct) 50.0 vs. Exp. 50.0 (Prev. 50.0)