Key takeaways
- Donald Trump and Vladimir Putin spoke by phone, discussing, among other things, the situation in Ukraine and the proposal of Budapest as the location for a future summit, which was positively received by Putin.
- Asian stock markets opened under pressure, with the Nikkei, Hang Seng, and Shanghai Composite indices in the red, while the euro and Swiss franc gained value against the dollar, and the Japanese yen weakened amid expectations of a possible intervention by the Bank of Japan.
Key takeaways
- Donald Trump and Vladimir Putin spoke by phone, discussing, among other things, the situation in Ukraine and the proposal of Budapest as the location for a future summit, which was positively received by Putin.
- Asian stock markets opened under pressure, with the Nikkei, Hang Seng, and Shanghai Composite indices in the red, while the euro and Swiss franc gained value against the dollar, and the Japanese yen weakened amid expectations of a possible intervention by the Bank of Japan.
- President Donald Trump and Russian President Vladimir Putin held another phone call this year on Thursday, October 16. During the conversation, Trump proposed Budapest as the location for a future summit, which was positively received by Putin. They also discussed the situation in Ukraine, where Putin emphasized the strategic advantage of Russian forces and warned about the consequences of the U.S. supplying Tomahawk missiles to Ukraine.
- U.S. indices started yesterday’s session in positive territory, but most of the gains were erased in the second half of the day. The mood worsened due to a sharp sell-off in the banking sector, especially among regional institutions. Shares of Zions Bancorporation dropped 13% after revealing a significant charge related to bad loans extended to several borrowers.
- New tensions emerged in the pharmaceutical sector, with shares of Novo Nordisk and Eli Lilly declining following comments by former President Donald Trump. Trump suggested the possibility of lowering prices for weight-loss drugs, referring to Ozempic as a “weight-loss drug” and stating that its price “will come down significantly” and “drop quite quickly.”
- European stock indices are declining due to growing concerns about the stability of the banking sector and anticipation of inflation data release in the Eurozone. The market fears that further tensions in the banking sector could impact the entire regional economy. Additionally, the publication of inflation data in the Eurozone may provide clues regarding the future monetary policy of the European Central Bank.
- Due to the government shutdown, the Producer Price Index (PPI) report for September will likely not be published.
- Today, Federal Reserve Bank of St. Louis President Alberto Musalem is scheduled to speak on Friday, as is Bank of England Chief Economist Huw Pill.
- Asian stock markets opened Friday’s session under clear pressure, continuing the weaker sentiment from Wall Street. The Nikkei 225 index lost 1.28%, Hong Kong’s Hang Seng fell by 1.59%, and the Shanghai Composite dropped 1.00%. The Australian S&P/ASX 200 also recorded a decline, ending the day 0.75% below the previous close.
- In the currency market, the euro strengthened against the dollar, surpassing the 1.1710 EUR/USD level, reflecting the relative strength of the euro and expectations for a slower pace of monetary easing in the eurozone.
- The Swiss franc also gained value, with the USD/CHF rate falling to around 0.7900, indicating increased demand for safe-haven assets.
- The Japanese yen remained under pressure, weakening against the dollar and euro, fueled by speculation about a possible intervention by the Bank of Japan.
- Meanwhile, in China, the PBOC set the yuan’s reference rate at 7.0949 per dollar, slightly stronger than expected, signaling modest support for the Chinese currency amid trade tensions and volatility in global markets.
- Neel Kashkari of the Minneapolis Fed confirmed expectations of two more “insurance” rate cuts before the end of the year, noting that the economy is stronger than it appears. His remarks tempered market sentiment, suggesting moderate rather than aggressive monetary easing.
- Westpac emphasized that the November RBA meeting remains “fully open” following Australia’s labor market data.
- Japan’s LDP and the opposition CDP party agreed to hold a vote on the new Japanese prime minister on October 21.
- Gold continues its dynamic rally, gaining more than $100 per day and reaching record levels above $4300 per ounce. Demand for the metal remains strong even during local pullbacks, suggesting investors still view it as a key defensive asset in the current environment.
- Bitcoin continues to decline, falling below the $107,000 level, driven by increasing risk aversion in global markets. Investors are withdrawing from cryptocurrencies in favor of traditional safe-haven assets like gold, which is contributing to further downward pressure on BTC’s price.
- Today, companies including American Express and State Street Corporation are publishing their quarterly results.
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