• US futures are firmer as broader risk appetite is supported post-AMZN/INTC
• European bourses experience divergence as the above tone is offset in places by marked losses in heavyweight Sanofi post-results
• DXY remains above the 106.50 mark with the JPY around 150.00 where marked OpEx resides, PPI supports AUD
• Core fixed income awaits US PCE but retain an underlying bid
• Crude benchmarks benefit from a flare-up in geopolitical tensions though XAU remains contained
• Looking ahead, highlights increase US PCE Price Index, Personal Income/Consumption. Earnings: Carlsberg;  Exxon, Chevron, Abbvie, Aon, Charter, Colgate, Phillips 66

EUROPEAN TRADE

EQUITIES

• European bourses are modestly firmer on the session, DAX 40 +0.5%, but pronounced post-earning stock movements are resulting in marked divergence across some bourses; namely, the post-results/spin-off downside of 15% in Sanofi is weighing on the Euro Stoxx 50 +0.1% and CAC 40 -0.4% where the stock has respective 3.5% and 7.1% weightings.
• Sectors are mixed with Energy echoing benchmarks and outperforming while Health Care lags given Sanofi, Media pressured post-UMG and Food, Beverage & Alcohol names hit on Remy Cointreau. Banks reside in the green as NatWest's marked downside is offset by Danske Bank, Caixabank & Sabadell.
• Stateside, futures are in the green, ES +0.5%, with the NQ +0.9% outperforming following AMZN (+6.1% pre-mkt) and INTC (+7.8% pre-mkt) earnings after hours. Ahead, US PCE dominates the schedule.
• Click here and here for the sessions European pre-market equity newsflow, including earnings.
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FX

• Greenback grinds awaiting pointers from US PCE data as DXY sits tight within 106.50-67 confines.
• Yen continues to hover around 150.00 vs Buck and supported by even bigger option expiry interest as 5.1bln rolls off at the NY cut.
• Aussie reflated as PPI picks up pace and AUD/USD probes 21 DMA at 0.6351.
• Euro hovers above 1.0550 against Dollar and flanked by another range of expiries, Sterling toppy as Cable wanes ahead of 1.2150 again and EUR/GBP holds above 0.8700.
• Loonie fuelled by rebound in oil as USD/CAD eases back through 1.3800 from 1.3831.
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• Click here for the Option Expires for the NY Cut.

FIXED INCOME

• Bonds braced for US PCE, but retaining a pre-week and month end bid.
• Bunds recover ground between 128.31-82 parameters, Gilts regroup within 92.33-62 range and T-note nearer 106-11 top than 106-03 bottom, albeit narrowly.
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COMMODITIES

• A flare up in geopolitical tensions has sparked a concerned bid for the crude benchmarks after relatively contained action across the last few sessions; though, XAU is relatively unreactive.
• As it stands, WTI Dec'23 and Brent Jan'24 are at the top-end of circa. 1.50/bbl parameters that have seen the contracts eclipse USD 85.00/bbl and test USD 89.00/bbl respectively.
• XAU remains in narrow ranges around the USD 1985/oz mark after testing but failing to eclipse the USD 2k/T figure on Thursday while base metals are firmer and feature LME Copper back above USD 8k/T. A move what is seemingly a function of broader risk appetite beginning to return to the market.
• Codelco posted a 2.1% Y/Y increase in Q3 copper production, according to Bloomberg.
• Peru is reportedly planning to cut red tape for the mining sector as part of a package expected to be unveiled next week to stem recession, according to Reuters citing the Economy Minister.
• Kazakhstan says it could increase oil exports to Germany to 2mln/T year via the Druzhba pipeline, via the Energy Minister.
• BHP Iron Ore rail workers within Australia have approved plans for industrial action, incl. work stoppages of up to 24hrs. Further talks with union next week.
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NOTABLE EUROPEAN HEADLINES

• ECB Survey of Professional Forecasters: 2024 inflation seen at 2.7% (same as prev. release), 2025 projection lowered to 2.1% from 2.2%. Click here for more.
• ECB's Vasle says inflation rate will curb inflation.
• ECB's Muller (hawk) says the rate of price increase remains too fast. EZ in stagnation, not a deep economic crisis. Deep recession not required to tame inflation. Economy to determine how long rates stay at the peak for.

EUROPEAN DATA

• German Brandenburg State CPI YY (Oct) 4.6% (Prev. 5.6%); M/M (Oct) 0.0% (Prev. 0.3%). Reminder, the flash German HICP release is due Monday, October 30th.

NOTABLE US HEADLINES

• Amazon.com Inc (AMZN) Q3 2023 (USD): EPS 0.94 (exp. 0.58), Revenue 143.1bln (exp. 141.41bln). Q4 23 net sales view 160-167bln (exp. 167bln). Q3 23 Operating income USD 11.19bln (exp. 7.71bln). Online stores net sales USD 57.27bln (exp. 56.82bln). Physical Stores net sales 4.96bln (exp. 4.99bln). Third-Party Seller Services net sales 34.34bln (exp. 33.4bln). Subscription Services net sales 10.17bln (exp. 10.13bln). AWS net sales USD 23.06bln (exp. 23.13bln). North America net sales USD 87.89bln (exp. 87.12bln). International net sales USD 32.14bln (exp. 32.08bln). Operating margin 7.8% (exp. 5.46%). Co. said it is seeing the pace and volume of closed AWS deals pick up. CFO said the Co. still sees customers being cautious on price, is using AI to show more relevant ads to shoppers. Lower inflation helped it with regard to certain shipping rates. Cost optimisation work in cloud is starting to slow down. Shares rose 5.3% after market.
• Intel Corp (INTC) Q3 2023 (USD): EPS 0.41 (exp. 0.22), Revenue 14.2bln (exp. 13.53bln); Datacenter & AI revenue 3.8bln (exp. 3.94bln); Guides Q4 revenue between 14.6-15.6bln (exp. 14.35bln); Q4 EPS Non-GAAP 0.44 (exp. 0.32). CEO said, "We see signs of normalization in the server market as we enter Q4". Shares rose 7.7% after market.
• US House Speaker Johnson thinks any stopgap spending bill should have conditions, via Fox News interview.

GEOPOLITICS

US-IRAN

• "US military carried out airstrikes on Iranian proxy forces in Syria in response to recent attacks on US bases since Oct 17", according to sources via Fox News' Griffin.
• US President Biden ordered strikes against two facilities in Syria used by Iran’s IRGC and Iran-backed groups and will take additional measures if attacks by Iran's proxies continue, according to Reuters citing the Pentagon.
• US Defense Official said Iran is responsible for strikes by its proxies against US troops in Iraq and Syria, according to Reuters.
• "Two IRGC facilities near Abu Kamal in Syria struck in US airstrikes; no word as to whether any Iranians were present at the facilities at the time, according to senior military official. “This has nothing to do with the conflict in Israel and Gaza”; Fox News
• US did not coordinate strikes in Syria with Israel, according to an official cited by Reuters

ISRAEL-HAMAS

• Israel's military said it was aware of a security incident near its Red Sea border with Egypt early on Friday, which follows reports of an explosion in the Egyptian town of Taba, according to Reuters.
• Egyptian media noted a rocket falling in the Egyptian city of Taba and wounding five people, according to Al Arabiya; reportedly hit a residential building, according to BNO News.
• Since, a projectile reportedly fell in the Red Sea town of Nuweiba, Egypt, via Reuters citing security sources.
• IDF spokesman: Warplanes have been called in to deal with an air threat in the Red Sea region, via Sky News Arabia.
• Israeli Defence Minister said forces are fully prepared and will start military ground operation in due course, according to Reuters.
• Israeli fighter jets flew over Jenin city and its camp in West Bank, according to Al Jazeera.
• US Pentagon said 900 troops are deploying or have deployed to the Middle East from the continental US, including air defence operators. US troops have been attacked at least 12 times in Iraq and four times in Syria in the past week by Iran-affiliated groups. US troops were targeted in Iraq earlier on Thursday but the attack was unsuccessful, according to Reuters.

CRYPTO

• Bitcoin is essentially unchanged on the session and resides in very close proximity to the USD 34k mark. Action that is much steadier than that seen across the week as a whole where ETF optimism has driven BTC from a USD 29.67k base to a USD 35.18k peak.

APAC TRADE

• APAC stocks eventually traded firmer across the board as the well-received earnings from Amazon and Intel pushed sentiment into the positive after the mostly lower close on Wall Street.
• ASX 200 supported by its Consumer Staples sector, while an uptick in M/M PPI had kept the Industrial Sector’s gains capped, and Tech had resided as the laggard.
• Nikkei 225 saw its gains driven by its Industrial sectors, potentially following the US GDP metrics, while the Pharma sector lagged as Takeda shares slumped over 7% following their earnings.
• Hang Seng and Shanghai Comp opened mixed with the former firmer as its earnings season picked up and as the Hang Seng Tech index rose over 2%. Sentiment for the Mainland was initially muted but improved, while reports via China’s Securities Journal suggested China was likely to reduce the reserve requirement ratio in Q4 to support government bond issuance.

NOTABLE ASIA-PAC HEADLINES

• China is likely to reduce the reserve requirement ratio (RRR) in Q4 to support government bond issuance, according to China Securities Journal citing analysts.
• China's former Premier Li Keqiang has passed away, according to state media CCTV; reportedly died of a heart attack at 68 years old.
• Fantasia Holdings (1777 HK) is entering into a framework cooperation agreement which could assist the group in alleviating its liquidity pressure and facilitate communication with its onshore creditors, according to Reuters.
• Japanese Finance Minister Suzuki said it is important for currencies to move stably reflecting fundamentals; No comment on forex levels, no comment on currency intervention; Will take thorough steps on FX with a strong sense of urgency, according to Reuters.
• Japanese PM Kishida said he thinks companies' willingness to raise wages is very strong, and said the next 2-3 years will be a crucial period for wage hikes, according to Reuters.

DATA RECAP

• Japanese CPI Tokyo Ex fresh food YY (Oct) 2.7% vs. Exp. 2.5% (Prev. 2.5%); CPI Overall Tokyo (Oct) 3.3% (Prev. 2.8%)
• Chinese Industrial profit YTD (Sep) +11.9%% (Prev. +17.2%); YTD -9.0% (prev. -11.7%)
• New Zealand ANZ Consumer Confidence Index Oct: 88.1 (prev. 86.4); Consumer Confidence (M/M): 2.0% (prev. 1.6%).
• Australian PPI YY (Q3) 3.8% (Prev. 3.9%); QQ (Q3) 1.8% (Prev. 0.5%)