Weekend News Round Up - Newsquawk Asia-Pac Market Open

• US stocks rallied on Friday with a tech bias and closed at session highs entering the weekend, while the upside came despite lacklustre Apple (AAPL) earnings and an awful Amazon (AMZN) report, with traders instead pointing to some likely month-end-related buying, while the bulk of the strength came in the wake of US data as real yields fell and inflation breakevens rallied after the Q3 Employment Cost Index (ECI) and Sept. Core PCE fell slightly as expected.
• Russia announced it is suspending the UN-brokered grain agreement with Ukraine after accusing Ukraine of a massive drone attack on the Black Sea Fleet in Sevastopol, Crimea.
• PBoC Governor Yi reiterated that China will continue with its prudent monetary policy to keep the value of the yuan stable and said that China has the conditions to maintain conventional monetary policy for as long as possible, while Yi also reaffirmed to step up support for the real economy, according to Caixin and Reuters.
• Looking ahead, highlights include Japanese Industrial Production & Retail Sales, South Korean Industrial Production, Australian Retail Sales, Chinese Official PMIs.

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LOOKING AHEAD

• Japanese Industrial Production & Retail Sales, South Korean Industrial Production, Australian Retail Sales, Chinese Official PMIs.
• Click here for the Week Ahead preview

US TRADE

EQUITIES

• US stocks rallied on Friday with a tech bias and closed at session highs entering the weekend, while the upside came despite lacklustre Apple (AAPL) earnings and an awful Amazon (AMZN) report, with traders instead pointing to some likely month-end-related buying, while the bulk of the strength came in the wake of US data as real yields fell and inflation breakevens rallied after the Q3 Employment Cost Index (ECI) and Sept. Core PCE fell slightly as expected.
• SPX +2.46% at 3,901, NDX +3.17% at 11,546, DJIA +2.59% at 32,861, RUT +2.25% at 1,846.
• Click here for a detailed summary.

NOTABLE HEADLINES

• An intruder broke into House Speaker Pelosi’s home and demanded to see the House Speaker, while he attacked Pelosi’s husband with a hammer who was taken to hospital for surgery. US President Biden later stated that Pelosi’s husband was doing better after the attack and Biden urged that political actors condemn political violence, according to Reuters.
• Goldman Sachs now sees Fed rates peaking at 5% in March which is 25bps higher than its prior forecasts, according to Bloomberg.
• Elon Musk is said to have ordered job cuts across Twitter (TWTR) in which the layoffs would take place before November 1st when employees were scheduled to receive stock grants as part of their compensation, according to NYT. However, it was later reported that Elon Musk denied that layoffs will be taking place at Twitter before November 1st.

GLOBAL

• Brazil vote count shows incumbent Bolsonaro with 50.3% vs former President Lula with 49.7% of votes after 50.9% of voting machines were counted in the second-round run-off, according to Reuters.

COMMODITIES

• US President Biden said that oil companies who complain he is picking on them ‘ain’t seen nothing yet’, according to Reuters.
• QatarEnergy CEO said discussions are ongoing with several Asian buyers as value-added partners on the North Field expansion and that western international oil company partners have all been announced, while the CEO said several supply agreements are being discussed related to the expansion and announcement will be made in due course, according to Reuters.

GEOPOLITICS

• Russia announced it is suspending the UN-brokered grain agreement with Ukraine after accusing Ukraine of a massive drone attack on the Black Sea Fleet in Sevastopol, Crimea. Russia’s Defence Ministry stated that the drones used to attack Russia’s Black Sea Fleet were recovered and analysed, while it alleged that the drones used Canadian-made navigation modules and were launched by Ukraine near Odesa, according to Reuters.
• Ukrainian President Zelensky said Russia’s suspension of the grain export deal needs a strong international response from the UN and the G20, while he suggested that Russia doesn’t belong in the G20 as it is deliberately trying to provoke starvation. Furthermore, Zelensky separately commented that Ukrainian forces repelled a fierce offensive by Russian forces in the Donetsk region.
• Ukrainian President’s Chief of Staff accused Russia of blackmail and faking terror attacks on its own facilities in response to Russian accusations that Ukraine was behind explosions in Crimea on Saturday, according to Reuters.
• US President Biden said Russia’s decision to suspend participation in the grain deal is outrageous, according to Reuters.
• NATO called on Russia to reconsider its decision and renew the grain deal urgently, while it said that Russian President Putin must stop weaponising food and end the illegal war on Ukraine, according to Reuters.
• UN Secretary-General Guterres delayed his departure for the Arab League Summit in Algiers by a day to focus on the Black Sea grain deal and continues to engage in intense contacts aimed at ending Russia’s suspension of participation in the deal, according to a spokesperson cited by Reuters.
• UN said Ukrainian, Turkish and UN delegations agreed on Sunday for a movement plan for 16 vessels on October 31st under the Black Sea grain initiative and agreed for inspections to be provided on Monday to 40 outbound vessels, while the UN added that the Russian delegation has been informed of both plans, according to Reuters.
• Turkey’s Defence Minister is in talks with counterparts in Kyiv and Moscow to resume the grains deal and reminded the parties of the importance of continuing the grain deal for all humanity, while Turkey will continue to do its part for the restoration of peace in the region, according to the Defence Ministry cited by Reuters.
• Russian Defence Ministry alleged that representatives of a UK navy unit blew up the Nord Stream gas pipelines although didn’t provide any evidence for its claims, while the UK Defence Ministry said that these were ‘false claims of an epic scale’ and that Russia is making false claims to detract from its disastrous handling of the illegal invasion of Ukraine. Furthermore, the French Foreign Ministry also stated that Russian accusations against Britain have no basis and are part of a strategy to turn attention away from Moscow’s sole responsibility for the war in Ukraine, according to Reuters.
• Russia will reportedly take into account the modernisation of US nuclear bombs in Europe in its military planning, according to RIA citing Deputy Foreign Minister Grushko.
• Iranian President Raisi said security is the Islamic Republic’s red line and it will not allow its enemies to undermine it, while it was separately reported that the Iranian Revolutionary Guards Commander Salami warned protestors that Saturday would be the last day of riots and for protestors to not come to the streets, according to Reuters.

ASIA-PAC

• PBoC Governor Yi reiterated that China will continue with its prudent monetary policy to keep the value of the yuan stable and said that China has the conditions to maintain conventional monetary policy for as long as possible, while Yi also reaffirmed to step up support for the real economy, according to Caixin and Reuters.
• China’s State Council reiterated policy support for the nation’s digital economy and proposed an eight-pronged approach, according to SCMP.
• China named Chen Yixin, who is a long-time confidant of President Xi, as the new state security minister in the latest leadership shake-up, according to SCMP.
• Japan is to establish a new joint command to manage operations of land, sea and air self-defence forces with the government aiming to establish the new self-defence forces joint command in 2024, according to Nikkei. It was also separately reported that Japan is mulling extending its high-speed missile range to defend the Senkaku/Diaoyu Islands, according to SCMP.
• At least 153 people died and 150 others were injured during a stampede after large crowds surged into a narrow street in Seoul’s Itaewon nightlife district, according to a fire official cited by YTN. South Korean President Yoon declared a national day of mourning and said he would come up with measures to prevent a recurrence of similar incidents, according to Yonhap.
• RBNZ said bank solvency stress test shows resilience to a stagflation scenario and although capital buffers would be reduced in a stagflation scenario, they would still remain above the regulatory minimum, according to Reuters.

EU/UK

• UK PM Sunak is reportedly considering freezing foreign aid for two additional years to help balance UK government finances, according to The Telegraph.
• UK Home Secretary Braverman is under increasing pressure regarding security breaches after it emerged she took several hours to alert the UK’s top civil servant of an “error of judgement” regarding sensitive documents, according to FT.
• UK housing developers warned that new rules and taxes will add GBP 4.5bln to annual costs, according to FT citing a report by the Home Builders Federation.
• Royal Mail said the Communications Workers Union, which is its largest labour union, withdrew its planned strike action in Britain over the next two weeks, according to Reuters.
• ECB’s Knot said the ECB is not done with normalising monetary policy and that the ECB will significantly increase rates again in December which could be by 75bps but noted the next interest step will probably be between 50bps-75bps. Knot added the following interest rate steps will probably be smaller from early 2023, while he added that the ECB is not even at half-time of its fight against inflation and that the prospect of a recession in the Eurozone has become increasingly likely, according to Reuters.