• JPMorgan and Standard Chartered no longer expect the Federal Reserve to cut rates in December, vs prior forecast of a 25bp cut.
• European bourses entirely in the red, with AEX underperforming as Tech plays catch-up to Thursday’s NVIDIA losses; US equity futures are mixed today, with NVIDIA -1.5% in pre-market trade.
• DXY is mildly firmer, JPY outperforms on haven flows, jawboning and data metrics which play in favour of further BoJ normalisation. Bloomberg reported that Japan may intervene before USD/JPY reaches 160.
• Bonds firmer, benefiting from the risk tone; additional impetus from European and UK data.
• Crude complex pressured on constructive Russia/Ukraine reports, XAU is mildly lower.
• Looking ahead, US Flash PMIs (Nov), US Real Weekly Earnings (Sep), Canadian Retail Sales (Sep), US Uni. of Michigan (Nov), Moody’s on the UK & Italy, ECB’s Nagel; Fed’s Williams, Barr, Jefferson, Logan; SNB’s Schlegel.

TRADE/TARIFFS

• US President Trump signed an order modifying the scope of tariffs on Brazil, stating that certain agricultural products will not be subject to the additional ad valorem duty imposed under Executive Order 14323, according to the White House. Bloomberg reported that Trump has expanded his reductions of certain food tariffs by extending them to the 40% surcharge placed on Brazil over the Bolsonaro case, noting that last week’s exemptions did not apply to that portion of the tariffs. White House said US President Trump's order on Brazilian imports removes tariffs announced on July 30th on imports of Brazilian beef, coffee, and orange juice.
• EU Trade Commissioner said momentum is improving on the Australia–EU trade deal and expects another round of talks early next year, according to Reuters.

EUROPEAN TRADEEQUITIES

• European bourses (STOXX 600 -0.6%) have opened lower across the board, as Europe plays catch-up to the hefty losses seen on Wall St, where NVIDIA fell into negative territory - erasing all of its initial post-earnings strength. AEX (-1.5%) underperforms in Europe with ASML sinking nearly 6%.
• European sectors are broadly in the red, with a clear defensive bias given the risk tone. Energy is hampered by pressure in the oil complex amidst constructive Russia-Ukraine developments. Basic Resources and Tech have been hit by the risk tone.
• US equity futures (ES U/C NQ -0.2% RTY +0.2%) are mixed, but with underperformance in the NQ as NVIDIA (-1.5%) continues to dip in the pre-market; contracts are off worst levels, as NVIDIA attempts to scale back early pre-market losses north of 3%. Moreover, several banks have continued to scale back bets for a December cut, namely Standard Chartered and JPMorgan.
• Note, US stocks on Thursday saw their sharpest intraday reversal since April, with the Nasdaq-100 sliding nearly 5% from its session high before benchmarks hit two-month lows. With no clear trigger, traders floated multiple theories to explain the abrupt selloff, including: doubts that AI projects are generating enough revenue or profit to justify heavy spending; a strong delayed September jobs report; concerns about lofty equity valuations; rising volatility ahead of Friday’s major options expiration; Bitcoin’s drop to a six-month low signalling risk-off sentiment.
• Click for the sessions European pre-market equity newsflow
• Click for the additional news

FX

• DXY is flat/modestly firmer today and trades at the lower end of a 99.98 to 110.26 range. Not much driving things for the index this morning, focus remains firmly on the NFP report in the prior session, which led to some major banks adjusting their calls for a December rate cut. JPMorgan no longer sees a cut in December; Standard Chartered also looks for unchanged, instead favouring a Q1'26 move, likely January. Money markets currently assign a 27% chance of a Dec. cut. Focus ahead now on US Flash PMIs and UoM Sentiment data. Most recently, the USD has picked up a touch and continues to make fresh highs - seemingly as the risk tone continues to deteriorate. Nothing fresh to explain the dip in sentiment, but comes as NVIDIA continues to slip in the pre-market, hawkish Fed re-pricing, and negative growth implications of European PMIs.
• EUR is a little lower and trades within a 1.1514 to 1.1552 range. Some choppy two-way action on the French/German PMI metrics, before then moving lower as the USD attempts to move higher in recent trade. To recap the PMI figures, the EZ-wide PMI didn't have much impact as the woes for the manufacturing sector were clearly illustrated by France and Germany before. HCOB notes that, for France in particular, the political instability in the region is weighing and is expected to remain complicated, "meaning that the EZ is unlikely to receive any positive impetus from this quarter in the short term". In terms of price action, EUR/USD moved a touch lower on the French figures (which were weaker across the board), before then moving higher on the German metrics (strong across the board).
• GBP is a little lower vs USD, with much of the downside seen in recent trade amidst some broader Dollar demand; currently at the bottom of a 1.3051 to 1.3102 range. Earlier, UK PMIs were mixed - Services missed expectations, whilst Manufacturing surprisingly climbed into expansionary territory; nonetheless, Composite dipped more than expected. The inner report suggested that the "debate will shift further away from inflation worries toward the need to support the struggling economy, hence adding to the chances of interest rates being cut in December".
• JPY the strongest G10 currency, buoyed by the risk tone and comments via Finance Minister Katayama, who suggested that intervention was on the table. USD/JPY traded within a 157.10-157.54 range, before edging to fresh session lows at 156.57 as the risk tone deteriorated in the European morning. Japanese nationwide CPI printed in-line with expectations, with PMIs also constructive; the internal PMI report suggested that "inflation remains a key concern". Figures which play in favour of a hike in December. On fiscal developments, Japan’s cabinet approved a JPY 21.3tln economic stimulus package (vs expectations of JPY 20–21.3tln), with JPY 17.7tln in fresh spending via the extra budget and an overall impact of JPY 42.58tln, according to Bloomberg.
• Antipodeans are mixed, with the Kiwi marginally firmer whilst the Aussie remains pressured. Overnight activity currencies were buoyed by an improving risk tone - and were unreactive to the region's own data figures. This morning has seen a scaling back of initial upside, as the risk tone dips.
• PBoC set USD/CNY mid-point at 7.0875 vs exp. 7.1154 (Prev. 7.0905)
• Click for NY OpEx Details

FIXED INCOME

• Fixed firmer this morning and climbing as the risk tone deteriorates.
• USTs at a 113-10+ peak with gains of 14 ticks at most. Specifics for the US light, strength in USTs derived from the increasingly risk-off tone seen across markets with NVIDIA once again a primary driver. If the move continues, we look to resistance at 113-18+ from the last week of October before 113-29, the figure and then 114-02. Today's docket features Real Weekly earnings for September, Flash November PMIs and several Fed speakers. Text expected from Williams, Barr, Jefferson & Logan in addition to TV appearances from Collins and Miran.
• Bunds bid given the tone, in-fitting with USTs. In addition, the complex benefits from a poor set of Flash PMIs which speak to tepid economic performance and ongoing political concerns. For the ECB, the data is unlikely to change much as the inflation-related components were subject to two-way movements and we await the December forecasts. Bunds as high as 129.09, firmer by 47 ticks at most. If the move continues, we look to 129.40 from November 13th.
• Gilts opened with gains of 11 ticks after weak Retail Sales data, despite the offsetting influence of PSNB. Additionally, and as outlined above, the risk tone is playing a role. As such, the benchmark is firmer by just over 50 ticks at best, notching a 92.43 peak, eyeing the WTD high of 92.60.
• The Retail Sales data is itself unlikely to move the dial for the BoE, as Governor Bailey is focused on inflation and caveats apply to the series re. Black Friday and the Budget. However, the subsequent PMI release highlighted increased growth concerns and a "real chance that this pause may turn into a downturn", points that factor in-favour of further BoE easing, and moves some of the focus away from inflation in assessing the BoE's near-term outlook; BoE pricing unreactive, remains around an 83% chance of a cut.

COMMODITIES

• WTI and Brent Jan'26 trends lower from USD 58.80/bbl to 57.50/bbl and USD 63.02/bbl to USD 61.98/bbl, respectively, as the global risk tone weakens and further reporting on the 28-point peace plan. Reported by Axios, Kyiv would have to give up additional territory in the east, cap the size of its military, and agree that it will never join NATO. On Ukrainian security, Kyiv would be given a guarantee modelled on NATO's Article 5, which would commit the US and European allies to treat an attack on Ukraine as an attack on the "transatlantic community".
• Spot XAU has grinded lower from a peak of USD 4089/oz to a trough of USD 4023/oz before paring back earlier losses to USD 4063/oz as the market continues to consolidate above USD 4k/oz. Despite the recent choppiness in XAU, investors still see further upside in the yellow metal driven by further Fed rate cuts, persistent geopolitical uncertainties and rising fiscal concerns.
• 3M LME Copper is ultimately trading lower as it follows the global risk tone. The red metal initially followed on from Thursday's selloff, forming a low at USD 10.66k/t before bouncing to a peak of USD 10.72k/t. As the session continues, 3M LME Copper has fallen back to new session lows and remains near lows at USD 10.64k/t.
• Global crude steel output fell 5.9% Y/Y in October and China's crude steel output fell 12.1% Y/Y, according to World Steel.

NOTABLE DATA RECAP

• UK GfK Consumer Confidence (Nov) -19.0 vs. Exp. -18.0 (Prev. -17.0)
• UK Retail Sales MM (Oct) -1.1% (Exp. 0.0%, Prev. 0.5%, Rev. 0.7%); Ex-Fuel YY (Oct) 1.2% vs. Exp. 2.5% (Prev. 2.3%, Rev. 1.7%); YY (Oct) 0.2% vs. Exp. 1.5% (Prev. 1.5%, Rev. 1.0%); Ex-Fuel MM (Oct) -1.0% vs. Exp. -0.3% (Prev. 0.6%, Rev. 0.7%)
• UK PSNB Ex Banks GBP (Oct) 17.434B GB vs. Exp. 15.0B GB (Prev. 20.246B GB, Rev. 19.894B GB); PSNCR, GBP (Oct) 20.825B GB (Prev. -10.862B GB, Rev. -10.782B GB)
• EU HCOB Composite Flash PMI (Nov) 52.4 vs. Exp. 52.5 (Prev. 52.5); Manufacturing Flash PMI (Nov) 49.7 vs. Exp. 50.2 (Prev. 50); Services Flash PMI (Nov) 53.1 vs. Exp. 53 (Prev. 53)
• French HCOB Composite Flash PMI (Nov) 49.9 vs. Exp. 48.5 (Prev. 47.7); Services Flash PMI (Nov) 50.8 vs. Exp. 48.3 (Prev. 48); Manufacturing Flash PMI (Nov) 47.8 vs. Exp. 49 (Prev. 48.8)
• German HCOB Composite Flash PMI (Nov) 52.1 vs. Exp. 53.7 (Prev. 53.9); Services Flash PMI (Nov) 52.7 vs. Exp. 54 (Prev. 54.6); Manufacturing Flash PMI (Nov) 48.4 vs. Exp. 49.8 (Prev. 49.6)
• UK Flash Manufacturing PMI (Nov) 50.2 vs. Exp. 49.1 (Prev. 49.7); Services PMI (Nov) 50.5 vs. Exp. 51.9 (Prev. 52.3); Composite PMI (Nov) 50.5 vs. Exp. 51.8 (Prev. 52.2)

NOTABLE EUROPEAN HEADLINES

• NBH's Virag has quit, Bloomberg reports citing the NBH; to be replaced with Banai. Virag will now be an advisor to the Governor.
• ECB's Lagarde says the ECB will continue to adjust policy as needed to ensure that inflation remains at the 2% target. Internal barriers in services and good markets are equivalent to tariffs of around 100% and 65% respectively.
• SNB's Tschudin says inflation will rise slightly in upcoming quarters.

NOTABLE US HEADLINES

• US Treasury Secretary Bessent said the Fed should keep going with its cutting cycle and should be looking at the data, via Bloomberg.
• Fed’s Paulson (2026 voter) said she is approaching the December rate decision cautiously and that the September labour-market report was encouraging overall, though she remains, on balance, more worried about the labour market than inflation. She said rate cuts so far have been appropriate but each one raises the bar for the next, and with upside risks to inflation and downside risks to employment, monetary policy must walk a fine line. She expects to learn a lot between now and the December meeting and said her longer-term policy thinking is focused on balancing inflation and labour-market risks. Paulson said the US economy is doing OK, but aggregate growth is unusually dependent on high-income earners and is particularly sensitive to equity valuations. She added that tariff effects are smaller than feared and that the overall demand environment is helping contain inflation, according to Reuters.
• JPMorgan no longer expects the Federal Reserve to cut rates in December, vs its prior forecast of a 25bp cut.
• Standard Chartered no longer expects the Fed to cut by 25bps in December following the jobs data; expects a Q1-2206 cut, most likely January (prev. forecast no 2026 cuts)
• OpenAI CEO Sam Altman is bracing for possible economic headwinds in catching up to a resurgent Google (GOOGL), according to The Information. He told colleagues last month that Google’s recent AI progress could “create some temporary economic headwinds” for OpenAI, and the company’s narrowing tech lead and rising cash-burn projections have raised questions among investors.
• Republican senators have been privately lobbying US President Trump to support a limited short-term extension of Obamacare subsidies, according to Punchbowl. Adds that save the GOP from a 2026 drubbing and buy time for Congress to pass a more favourable longer-term health care plan. Multiple GOP senators were set to meet with US President Trump on Thursday, but the meeting was cancelled for unrelated reasons.

GEOPOLITICS

RUSSIA-UKRAINE

• US President Trump’s 28-point plan for peace in Ukraine would force Kyiv to give up additional territory in the east, cap the size of its military, and agree never to join NATO, according to a draft obtained by Axios.
• US President Trump's peace plan for Ukraine includes a security guarantee modelled on NATO's Article 5, which would commit the US & European allies to treat an attack on Ukraine as an attack on the "transatlantic community", via Axios.
• US officials reportedly intend to brief EU ambassadors in Kyiv on the draft peace proposal, via Reuters citing sources.
• European officials are reportedly still analysing the US-Russia peace proposal re. Ukraine, via FT; a diplomat cited says it "basically means capitulation [to Moscow]", another said the focus is to "...work for a more reasonable outcome".
• UK PM Starmer, German Chancellor Merz, French President Macron and Ukrainian President Zelensky is to hold a call today at 11:00GMT, via Bloomberg.

CRYPTO

• Bitcoin has sunk below USD 85k, posting losses north of 10% to currently trade at USD 82.5k; a move which appeared to weigh on global sentiment.

APAC TRADE

• APAC stocks traded lower across the board as the sharp Wall Street selloff reverberated through the region despite the absence of fresh catalysts.
• ASX 200 was dragged down by all sectors, with gold and mining leading declines; tech held up relatively better alongside defensive names.
• Nikkei 225 slipped at the open, pressured by mining and metals, while financials found some relief as yields eased off highs. No move was seen on the budget, which came in line with expectations.
• Hang Seng and Shanghai Comp both opened softer but recovered to trade firmer, though still reflecting the cautious global tone.

NOTABLE ASIA-PAC HEADLINES

• Japan’s cabinet approved a JPY 21.3tln economic stimulus package (vs expectations of JPY 20–21.3tln), with JPY 17.7tln in fresh spending via the extra budget and an overall impact of JPY 42.58tln, according to Bloomberg. Japan PM Takaichi said new bonds will be issued to fund the package if tax revenue falls short, but total JGB issuance will be smaller than last year, adding that sustainable state finances must be achieved through economic growth, according to Reuters.
• Japanese Finance Minister Katayama said she will take appropriate action if there are excessive FX moves, noting that FX intervention is an option as it was mentioned in the Japan–US agreement in September. She said the government will issue debt to fund part of the stimulus package as needed, is not trying to increase the size of spending, and is alarmed by recent one-sided and rapid foreign-exchange moves, according to Reuters.
• Japanese Finance Minister Katayama said she is closely watching FX moves with a high sense of urgency and will take appropriate action based on the US–Japan forex agreement. She declined to comment on FX levels, noted that recent moves have been sharp and one-sided, and stressed that currencies should move in a stable manner reflecting fundamentals. She said that at her meeting with BoJ Governor Ueda and the Economy Minister, Ueda explained the BoJ will gradually adjust monetary support in line with economic and price improvements, adding that specific policy decisions are up to the BoJ. She said the three officials also reaffirmed they will coordinate closely on market developments, according to Reuters.
• Japanese Finance Minister Katayama said JGB yields move based on domestic economic, price and monetary-policy developments, fiscal conditions, and overseas market moves. She added that Japan will guide appropriate debt-management policy to ensure it does not lose market trust in its finances, according to Reuters.
• Japanese Finance Minister Katayama said Japan is only halfway toward achieving sustainable, stable price increases accompanied by wage gains. She also said Japan’s debt-to-GDP ratio should edge down from last year, even after an extra budget for the stimulus package, according to Reuters.
• BoJ Governor Ueda said a weak JPY lifts import prices and contributes to higher consumer inflation, and that FX moves may have a larger impact on prices given current conditions. He said companies are increasingly willing to raise wages and prices, noted he is mindful that FX moves could affect inflation expectations and underlying inflation, and said the BoJ will scrutinise the impact of FX volatility on prices, according to Reuters.
• Japan may intervene before USD/JPY reaches 160, according to Bloomberg, citing a government panellist.
• Foxconn (2317 TT) said it will launch a joint venture with Intrinsic to build an AI factory and plans to invest USD 2–3bln per year in AI. Foxconn and OpenAI will also collaborate to strengthen US manufacturing across the AI supply chain, with OpenAI receiving early access to evaluate Foxconn’s systems and an option to purchase them, according to Reuters.
• Foxconn’s (2317 TT) VisionBay AI unit said it plans to deploy 27MW using NVDA’s GB300 chips in the first half of 2026. This will be Taiwan’s largest advanced GPU cluster and the first GB300 AI datacenter in APAC, according to Reuters.
• Singapore raised its 2025 GDP growth estimate to around 4%, from the previous 1.5–2.5%, according to Reuters.
• Japan's Finance Minister Katayama says she can't comment on expected size of additional bond issuance to fund the latest package. She believes markets have stabilised after various announcement. Also adds that she doesn't believe the latest package is sufficiently big to ignite demand driven inflation.

DATA RECAP

• Japanese CPI, Core Nationwide YY (Oct) 3.0% vs. Exp. 3.0% (Prev. 2.9%)
• Japanese CPI Ex Fresh Food & Energy (Oct) 3.10% (Prev. 3.00%)
• Japanese CPI, Overall Nationwide (Oct) 3.0% (Prev. 2.9%)
• Japanese CPI Index Ex Fresh Food (Oct) 112.1 (Prev. 111.4)
• Japanese Imports YY (Oct) 0.7% vs. Exp. -0.7% (Prev. 3.0%)
• Japanese Exports YY (Oct) 3.6% vs. Exp. 1.1% (Prev. 4.2%)
• Japanese Trade Balance Total Yen (Oct) -231.8B vs. Exp. -280.1B (Prev. -237.4B)
• Japanese S&P Global Composite PMI Flash SA (Nov) 52.0 (Prev. 51.5); "Inflation remains a key concern”.
• Japanese S&P Global Services PMI Flash SA (Nov) 53.1 (Prev. 53.1)
• Japanese S&P Global Manufacturing PMI Flash SA (Nov) 48.8 (Prev. 48.2)
• Australian S&P Global Composite PMI Flash (Nov) 52.6 (Prev. 52.1)
• Australian S&P Global Services PMI Flash (Nov) 52.7 (Prev. 52.5)
• Australian S&P Global Manufacturing PMI Flash (Nov) 51.6 (Prev. 49.7)
• South Korean PPI Growth YY (Oct) 1.5% (Prev. 1.2%, Rev. 1.2%)
• South Korean PPI Growth MM (Oct) 0.2% (Prev. 0.4%, Rev. 0.4%)
• New Zealand Annual Trade Balance (Oct) -2.28B (Prev. -2.25B, Rev. -2.39B)
• New Zealand Trade Balance (Oct) -1542.0M (Prev. -1355.0M, Rev. -1384M)
• New Zealand Imports (Oct) 8.04B (Prev. 7.18B, Rev. 7.17B)
• New Zealand Exports (Oct) 6.5B (Prev. 5.82B, Rev. 5.78B)