• Equity bourses/futures are firmer with earnings in focus and FB bolstering tech ahead of mega-cap earnings and supply; ES +0.4%, NQ +0.7%
• Facebook announced a USD 50bln boost in its share buyback authorisation but the outlook is dampened by Apple's new iOS
• DXY has been choppy but is currently subdued to the benefit of peers ex-JPY/CHF while core debt falters post EGB supply
• US Treasury Secretary Yellen and Chinese Vice Premier Liu He spoke on Oct 26th
• Looking ahead, highlights include US Consumer Confidence, New Home Sales, supply from the US
• Earnings: Alphabet, Microsoft, Visa, AMD, Twitter

ASIA

Asia-Pac stocks were lifted by the tailwinds seen stateside, whereby the SPX and DJIA both notched fresh all-time-highs, although the NDX outperformed as Tesla shot past the USD 1000/shr mark and USD 1trl market cap milestone. US equity futures overnight drifted higher with the NQ narrowly outperforming its peers. European equity futures also posted mild gains. Back to APAC, the ASX 200 (+0.1%) was kept afloat by tech names as the sector saw tailwinds from the stateside performance. The Nikkei 225 (+1.8%) outperformed following the prior session’s underperformance, and as the JPY drifted lower during the session. The KOSPI (+0.9%) was also firmer with SK Hynix rising some 3% at the open as chip demand supported earnings. The Hang Seng (-0.4%) and Shanghai Comp (-0.3%) opened flat but the latter was initially underpinned following another chunky CNY 190bln net liquidity injection by the PBoC. The Hang Seng Mainland Properties Index fell almost 5% in early trade, whilst Modern Land noted that it will not be able to meet payments and shares were halted until future notice. Finally, 10yr JGBs were lower amid spillover selling from T-notes and Bund futures.

• PBoC set USD/CNY mid-point at 6.3890 vs exp. 6.3875 (prev. 6.3924)
• PBoC injected a net CNY 190bln via 7-day reverse repos at a rate of 2.20%

Chinese President Xi Jinping will not be attending the G20, Rome Summit in person, according to sources. (Newswires)

China regulators are meeting some companies within key sectors in relation to their foreign debt holdings, according to the state planner; separately, China is reportedly urging the Evergrande founder to pay debt with personal wealth. (Newswires)

Modern Land (1107 HK) said that principal amount of notes was not met on Oct 25th; the group is assessing financial conditions and cash position of the group. Trading is halted until further notice. (Newswires)

SK Hynix (000660 KS) Q3 revenue KRW 11.8trl vs exp. KRW 11.9trl. Operating profit KRW 4.2trl vs exp. KRW 4.1trl; net KRW 3.3trl vs exp. KRW 3trl. Q4 DRAM shipments are expected to rise in the mid-high single-digit %; NAND is expected to rise double-digit %. (Newswires)

• South Korean GDP Growth QQ Advance (Q3) 0.3% vs. Exp. 0.6% (Prev. 0.8%)
• South Korean GDP Growth YY Advance (Q3) 4.0% vs. Exp. 4.2% (Prev. 6.0%)

US

US Senator Wyden, on the billionaire's tax, said "We’re gonna get it done in the next few days", via Punchbowl's Cohen. (Twitter) ter)

UK/EU

Germany Economy Minister is to lower 2021 GDP forecast to +2.6% (April forecast +3.5%) and raise 2022 to 4.1% (April forecast +3.6%), according to sources; additionally, expects inflation to rise to 2.9% in 2021 before easing to 2.2% in 2022 and 1.7% 2023, according to a source. (Newswires)

GEOPOLITICAL

US Treasury Secretary Yellen and Chinese Vice Premier Liu He spoke on Oct 26th, according to the Chinese Commerce Ministry; China said it is important to strengthen US-China coordination on macroeconomic policies. Yellen raised issues of concern, according to a US Treasury Statement. (Newswires)

EQUITIES

European equities (Stoxx 600 +0.6%) trade on a firmer footing after extending on the tentative gains seen at the cash open with the Stoxx 600 at its best level in around seven weeks. The APAC session saw some support via the tailwinds seen in the US after the SPX and DJIA both notched fresh all-time highs and the NDX outperformed and Tesla shot past the USD 1000/shr mark and USD 1trl market cap milestone. The Nikkei 225 (+1.7%) led gains in the region alongside a firmer JPY whilst the Shanghai Comp (-0.3%) was unable to benefit from another chunky liquidity injection by the PBoC. Stateside, futures are indicative of a firmer cash open with the NQ (+0.6%) continuing to outpace peers with Facebook +2.4% in pre-market trade post-results which saw the Co. announce a USD 50bln boost to its share buyback authorisation. From a macro perspective, with the Fed in its blackout period and events on Capitol Hill not providing much impetus for price action, the equity landscape will likely be dominated by earnings with the likes of Alphabet, Microsoft, General Electric, 3M, Visa, AMD and Twitter all due to report today. Earnings are also playing a pivotal role in Europe today with Reckitt (+6.4%) top of the FTSE 100 and supporting the Personal and Household Goods sector after Q3 results prompted the Co. to raise its sales outlook. UBS (+0.6%) is off best levels but still firmer on the session after reporting its highest quarterly profits in six years. Countering the upside from UBS in the Banking sector is Nordea (-4.0%) with shares weighed on by Sampo selling 162mlnn shares in the Co. to institutional investors. Novartis (+1.6%) shares are trading broadly inline with the market after opening gains were scaled back post-Q3 earnings which saw the Co. report a 10% increase in operating profits and announce a strategic review of its generic drug unit Sandoz. Telecoms are near the unchanged mark and unable to benefit from the broader gains seen across the region as Orange (-2.7%) acts as a drag on the sector after announcing a decline in Q3 earnings.

Apple (AAPL) is reportedly very likely to face DoJ antitrust suit, according to The Information. (The Information)

Facebook Inc (FB) Q3 2021 (USD): EPS 3.22 (exp. 3.19/3.18 GAAP), Revenue 29.01bln (exp. 29.57bln). Co. announced a USD 50bln boost in share buyback authorisation. Advertising Revenue: 28.276bln (exp. 29.02bln) Other: 734mln (prev. 349mln). Daily Active Users (DAU): 1.93bln (exp. 1.92bln). Monthly Active Users (MAU): 2.91bln (exp. 2.92bln). Q4 2021 Revenue View: 31.5-34bln (exp. 34.84bln); Outlook reflects significant uncertainty in Q4 in light of Apple (AAPL) iOS 14 changes and macroeconomic factors. (PR Newswire) Facebook (FB) executive expects supply chain issues and impacts to ads to carry over into Q4. (Newswires) +3.0% in pre-market trade

Court granted motions to dismiss antitrust complaints filed by FTC and AG vs Facebook (FB), dismissing FTC complaint; FTC then filed amended complaint, and FB filed a motion to dismiss it. (Newswires)

United Parcel Service Inc (UPS) Q3 2021 (USD): EPS 2.65 (exp. 2.55), Revenue 23.2bln (exp. 22.56bln). (GlobeNewswire)

Eli Lilly and Co (LLY) Q3 2021 (USD): Adj. EPS 1.94 (exp. 1.98), Revenue 6.77bln (exp. 6.64bln). Raises FY21 guidance. (PR Newswire)

Tesla (TSLA) CEO Musk said "short-term we are seeing strong inflationary pressure". (Twitter)

CRYPTO

US SEC has reportedly received the green light to overlook stablecoins, according to reports. (Newswires)

Coinbase (COIN) has identified an issue with debit card functionality for customers in the UK and EU. (Newswires)

FX

DXY - The 94.000 level remains tantalisingly or agonisingly close, but elusive for the Dollar index, and it could simply be a psychological barrier as a breach would clear the way for a complete comeback from trough to 94.174 peak set last week. However, the Greenback has lost some yield attraction and the broad risk tone is bullish to dampen demand on safe-haven grounds, while chart resistance and option expiries are also preventing the Buck from staging a more pronounced rebound ahead of a busier US agenda including housing data, consumer confidence, several regional Fed surveys and the first slug of issuance in the form of Usd 60 bn 2 year notes. Back to the DXY, 93.965-795 encapsulates trade thus far, and the 21 DMA stands at 93.966 today, just 3 ticks shy of Monday’s high.

AUD - In similar vein to its US counterpart, the Aussie is finding 0.7500 a tough round number to crack, convincingly, but Aud/Usd is deriving support from the ongoing recovery in industrial metals awaiting independent impetus via Q3 inflation data tomorrow.

JPY/CHF - The Yen and Franc continue to lag their major peers and retreat further vs the Dollar, with the former now struggling to keep sight of the 114.00 handle even though hefty option expiries reside from 113.85 to the big figure (1 bn), and Usd/Jpy faces more at the 114.50 strike (1.1 bn), while the latter is sub-0.9200 and unwinding more gains relative to the Euro as the cross probes 1.0700.

GBP/NZD - Conversely, Sterling remains primed for further attempts to extend gains beyond Fib resistance and breach 1.3800, while eyeing 0.8400 against the Euro irrespective of some UK bank research suggesting that BoE Governor Bailey may not back up recent hawkish words with a vote to hike rates at the November MPC. Elsewhere, the Kiwi is still hovering above 0.7150 and defending 1.0500 vs its Antipodean rival with a degree of traction via RBNZ Governor Orr warning that climate change could culminate in a lengthy phase of stronger inflation that needs a policy response.

EUR/CAD - Both rather flat, as the Euro continues to pivot 1.1600 and rely on option expiry interest for underlying support (1.5 bn rolling off from the round number to 1.1610 today), but also anchored by the 21 DMA that aligns with the big figure, while the Loonie has lost its crude prop on the eve of the BoC, though should also receive protection from expiries at 1.2400 (1 bn) within a 1.2394-68 range.

EM - The Try has reclaimed more lost ground to trade above 9.5000 vs the Usd on a mix of corrective price action and short covering rather than any real relief about Turkey’s latest rift with international partners given another blast from President Erdogan who said statements issued by ambassadors on Kavala target his country’s judiciary and sovereignty, adding that the Turkish judiciary does not take orders from anyone. On the flip-side, the Zar is softer alongside Gold and ongoing issues with SA power supply provided by Eskom.

Notable FX Expiries, NY Cut:

• EUR/USD: 1.1600-10 (1.5BLN), 1.1700 (272M), 1.1720-30 (849M)
• USD/CAD: 1.2300 (370M), 1.2400 (1BLN), 1.2500 (258M), 1.2550 (651M)
• USD/JPY: 113.55-60 (626M), 113.85-114.00 (1BLN), 114.20-25 (500M), 114.50 (1.1BLN)

CNB's Nidetzky expects the debate at the November meeting to be around either a 50 or 75bps hike; expects inflation to peak around 6.0% at end-2021/January. (Newswires)

FIXED

Bunds may have found 169.00 a step too far anyway following their extended rebound from overnight Eurex lows to 168.97 (+32 ticks on the day and 90 ticks above Monday’s base) , but a sloppy 2028 German sale was probably enough to convince buyers to ease off, and the same goes for Gilts after a lacklustre DMO offering of 5 year stock as the 10 year bond has backed off from 124.53 (also 32 ticks above par). Meanwhile, US Treasuries are straddling yesterday’s settlement levels narrowly, with marginal underperformance at the short end of the curve pre-Usd 60 bn 2 year note issuance that comes after several data points and regional Fed surveys highlighted by consumer confidence.

Japan's Dai-Ichi Life is looking to raise holdings of JPY bonds between October-March. (Newswires)

COMMODITIES

WTI and Brent have been softer throughout the European morning dipping from the initially steady start to the APAC session after yesterday’s pressured; nonetheless, prices haven’t dipped too far from recent peaks. Newsflow for the complex and broadly has been sparse thus far as focus remains very much on earnings and events due later in the week. Specifically for energy, we had commentary from Russian Deputy PM Novak that he wants OPEC+ to stick to the agreement to increase production by 400k BPD at the November gathering, commentary which had little impact on crude at the time. Elsewhere, the weekly Private Inventory report is due later in the session and expectations are for a build of 1.7mln for the headline crude figure; for reference, both distillates and gasoline stocks are expected to post a draw. Moving to metals, spot gold and silver are pressured this morning with initial downside perhaps stemming from a short-lived resurgence in the USD; however, while the metals do have a negative bias, the magnitude of this – particularly in spot gold – is fairly minimal. Separately, base metals are softer with LME copper hindered and still shy of the 10k figure. Again, newsflow this morning has been limited but we did see a production update from Hochschild who confirmed FY21 production guidance of 360-370k gold-equivalent ounces after reporting that Q3 was the strongest period of the year, thus far.

China's State Planner is studying ways to stabilise coal prices over the longer term; looking at costs and profitability of the coal sector. (Newswires)

South Korea is to cut oil tax by 20% for 6 months and is to lower tariffs on LNG to 0%. (Newswires)