Morning wrap (22.10.2025)

Major stock indexes in the US and Europe are trading slightly higher after a record session for the DJIA and ahead of earnings from SAP and Tesla (US100: +0.15%, EU50: +0.05%, DE40 flat).

Netflix shares are down about 6% in after-hours trading after weaker-than-expected Q3 2025 results. Revenue came in at $11.51 billion versus Bloomberg’s consensus of $11.52 billion (company forecast: $11.53 billion), and EPS at $5.87 versus $6.94 expected. The operating margin fell to 28% due to a one-off tax charge in Brazil. On the upside, Netflix guided above consensus for Q4, forecasting $11.96 billion in revenue and a 29% margin in 2025. User engagement was described as “healthy,” with future growth expected to be driven largely by its advertising business.

ECB chief economist Philip Lane warned that euro-area banks remain exposed to risks from a potential tightening of US dollar funding, which accounts for up to 28% of their liabilities. Despite stronger liquidity buffers, a sudden dollar shortage could curb lending, prompting Lane to call for tighter monitoring of USD risks.

Sentiment across Asia-Pacific is mixed amid profit-taking in the tech sector. CHN.cash and HK.cash are down 0.3% and 0.4%, respectively, while JP225 trades slightly higher (+0.8%).

Japan’s exports rebounded 4.2% YoY in September (Bloomberg consensus: 4.6%, previous: -0.1%). The weaker than expected result was mainly due to a 13.3% drop in shipments to the US after new tariffs, offset by strong growth to Asia (+9.2%), China (+5.8%), and the EU (+5.0%), supported by demand for IT and semiconductor products. Imports rose 3.3%, driven by machinery and electrical equipment, indicating sustained capital investment. Despite the trade deficit, the data support Japan’s ongoing economic recovery and raise expectations for further BoJ rate hikes.

India and the US are reportedly close to finalizing a trade deal that would cut tariffs on Indian goods from 50% to around 15–16%. As part of the agreement, India would gradually reduce imports of Russian oil and allow GMO corn imports. The deal could be signed at the APEC Summit and would likely boost India’s stock market.

In FX, the dollar is undergoing a broad correction with flows out of other safe havens (yen and franc) toward riskier currencies. The strongest G10 performers are the Antipodean currencies (AUDUSD: +0.25%, NZDUSD: +0.3%). EURUSD rebounds 0.1% to 1.1615 after four straight sessions of declines.

Key precious metals turned positive despite early selling, reflecting profit-taking and valuation concerns. Gold is up 0.3% to $4,136/oz, silver +0.5% to $48.98/oz. Solid Wall Street results may further weigh on safe-haven demand.

Brent and WTI crude rise 0.6% and 1.1%, respectively, while NATGAS extends gains by another 1% after contract rollovers.