Morning Briefing: Warsh's silence on interest rates. AI debt fears cooled sentiment, but a rebound is visible

• Fed Chair Kevin Warsh declined to state an interest rate path through the end of 2026, pointing to the October and December meetings as key decision points. At the same time, he noted that worldwide we are dealing with synchronous monetary policy tightening.
• US PPI for September surged to 6.3% y/y against a consensus of 5.3%, yet 10-year US Treasury yields dropped 9.9 bps to 5.09% due to a flight to safety over AI corporate debt concerns (including CoreWeave).
• WTI crude oil dropped 1.76% to around 95.8 USD/bbl following a US proposal to release an additional 100 million barrels from reserves and a softening of Donald Trump's rhetoric toward Iran.

🇺🇸 Wall Street: How do futures look?

• Yesterday's session on futures ultimately ended with gains, although earlier in the day we observed a dynamic sell-off linked to AI debt concerns. ASML and TSMC presented strong earnings this week.
• S&P 500 futures (US500) trade near 7804.5 pts (+0.24% d/d, -0.78% w/w), snapping a three-day losing streak.
• NASDAQ 100 futures (US100) hover around 30,219.9 pts (+0.47% d/d, -2.90% w/w) following an effort to calm markets by Nvidia CEO Jensen Huang, who publicly defended CoreWeave's financial health.
• The VIX volatility index rises toward 17.66 pts (+1.61% d/d), reflecting persistent investor nervousness.

🌏 Asia

• Nikkei 225 (JP225) gains 0.40% to near 65,840.0 pts, supported by solid foreign capital inflows into Japanese equities (over 3.5 trillion JPY).
• Hang Seng (HK.cash) rises 0.16% to around 24,285.0 pts, while China's China A50 (CH50cash) corrects 0.20% to 13,373.8 pts.
• Australia's ASX 200 (AU200.cash) posts a moderate gain of 0.15% to around 8806.0 pts.
• The People's Bank of China (PBOC) set the yuan fixing at its strongest level since February 2023 (USD/CNY at 6.7220) and injected 60 billion CNY into the system via 7-day repos (1.40% rate).
• South Korea's Ministry of Finance announced tighter oversight and measures against market distortions after foreign capital outflows from Korean equities reached 14.16 billion USD in September.

🇪🇺 Europe before the open

• Euro Stoxx 50 (EU50) gains 0.32%, trading around 6227.4 pts.
• DAX 40 (DE40) rises 0.22% to around 25,672.1 pts.
• FTSE 100 (UK100) trades near yesterday's close at 10,878.1 pts (+0.08%).
• The European VSTOXX volatility index increases 2.15% to near 18.98 pts.

💱 Currencies and Commodities

• EURUSD trades around 1.1226 (+0.10%), while GBPUSD rises to around 1.3300 (+0.24%) following measured comments from the BoE's Andrew Bailey.
• USDJPY consolidates around 157.83 (-0.08%), while USDPLN stabilizes near 3.8916 (+0.05%).
• WTI crude oil (OIL.WTI) drops 1.76% to around 95.82 USD/bbl — driven by US pressure on IEA countries regarding reserve releases (suggesting an additional 100 million bbl) and Trump's statement that he does not intend to send ground troops to Iran.
• Brent crude oil (OIL) pulls back 0.32% to around 105.35 USD/bbl.
• Gold (GOLD) trades around 4,174.02 USD/oz (+0.09%), supported by an earlier overnight rally toward 4,200 USD/oz driven by a flight to safety, even as Indian funds paused mass subscriptions to gold ETFs ahead of Diwali.
• Silver (SILVER) rebounds 0.70% to 57.77 USD/oz.

📊 Macroeconomics: What data was released?

• Singapore: Non-oil domestic exports (NODX) in September surged 68% y/y, soundly beating the market consensus of 32% (driven mainly by marine structures and electronics).
• New Zealand: Manufacturing PMI for September rose to 56.5 pts (previously 53.1 pts), marking the 15th consecutive month of expansion; food price index remained at 0.0% m/m (previously 0.3% m/m).
• South Korea: Unemployment rate in September fell to 2.6% (consensus: 2.7%, previous: 2.7%); job creation slowed to 113k y/y (compared to 184k in August).
• Japan: Weekly foreign capital inflows into equities totaled 3,521.5 billion JPY (revised from 2,199.7 billion JPY previously), and into bonds 1,080.1 billion JPY (previously 585.7 billion JPY).

🔑 Key takeaways from overnight

• Fed statements: Fed Chair Kevin Warsh stated he does not intend to front-run decisions and pointed to the October and December meetings as decisive.
• Cleveland Fed's Beth Hammack warned that entrenched inflation would force more aggressive steps, while Austan Goolsbee described the latest month of inflation as disappointing.
• Bank of England: Governor Andrew Bailey assessed second-round effects from energy prices as currently subdued, slightly tempering market pricing of a rate hike at the November 5 meeting.
• Donald Trump ruled out using nuclear weapons and sending ground troops to Iran, though he did not rule out a strike on the Pickaxe Mountain underground complex.
• The Pentagon signaled a "NATO 3.0" concept, envisioning a reduction of US troops in Europe and shifting focus toward the Pacific.
• Moody's downgraded Nike's rating outlook to negative (maintaining an A2 rating), forecasting declining revenues and earnings through fiscal year 2028.
• Elon Musk unveiled a new version of the Tesla Roadster featuring maneuvering thrusters developed with SpaceX (requiring a $50,000 deposit, with production start pushed to 2028).

📅 What to expect today?

• 11:00 AM | Eurozone: Final September CPI inflation reading (consensus: 3.8% y/y, core: 2.5% y/y) and trade balance (consensus: 4.5 billion EUR).
• 2:15 PM – 2:30 PM | Canada: Housing starts (consensus: 234k) and foreign securities purchases (consensus: 23.59 billion CAD).
• 2:30 PM | US: September import prices m/m (consensus: 0.9% m/m vs 0.7% previously).
• 3:15 PM | US: Industrial production m/m (consensus: 0.4% m/m vs 0.0%) and capacity utilization (consensus: 76.5%).
• All day | Global | Ongoing International Monetary Fund Annual Meetings

🔎 Suggested to watch

• China A50 (CH50cash) — extreme oversold levels on an annual basis (Z1R -3.16, 5-year percentile 49.4%, RSI 19.2) coupled with PBOC stabilization actions and debt auctions create conditions for a technical rebound.
• WTI crude oil (OIL.WTI) — dynamic drop of 1.76% d/d amid elevated historical valuations (Z5L +1.25, Z1R +1.00, 5-year percentile 87.9%, RSI 55.2) and growing US pressure to release 100 million barrels of oil from IEA reserves.
• CAC 40 (FRA40) — strong morning surge in futures of 1.19% after earlier annual sell-offs (Z1R -1.22, RSI 37.3, 5-year percentile 72.0%), ahead of the key publication of the final CPI reading for the Eurozone at 11:00 AM.
• NASDAQ 100 (US100) — multi-year overbought territory (Z5L +2.00, Z1R +1.20, 5-year percentile 97.6%, RSI 43.5) facing rotation out of chip stocks, widening credit spreads for AI infrastructure (CoreWeave), and skepticism over enterprise AI spending.