Trump calls on Putin and Zelensky to get together and end the war; DXY is lower as yields ease and crude futures decline - Newsquawk EU Market Open

• US President Trump said the war with Iran will end very soon and that oil prices will fall once the conflict concludes, while Saudi Arabia conducted further strikes against Houthi targets in Yemen.
• US President Trump said Zelensky and Putin have to get together and end the war, while he thinks they support the energy ceasefire.
• APAC stocks mostly declined amid a tech-led sell-off following weakness in US chip and memory stocks; US equity futures were pressured, while European futures point to a lower open.
• DXY softened amid lower yields and geopolitical developments; crude futures declined despite continued Middle East tensions and uncertainty over a Russia-Ukraine energy ceasefire.
• Looking ahead, highlights include German Final Inflation (Sep), US ADP Employment Change Weekly, Existing Home Sales (Sep), OPEC MOMR. Speakers include US President Trump, ECB's Elderson & Lane, Fed’s Waller, Barkin & Collins. Supply from the Netherlands, Italy & Germany. Earnings from UnitedHealth, JPMorgan, Goldman Sachs, Wells Fargo, Citi, Johnson & Johnson.

SNAPSHOT

LOOKING AHEAD

• Highlights include German Final Inflation (Sep), US ADP Employment Change Weekly, Existing Home Sales (Sep), OPEC MOMR. Speakers include US President Trump, BoE’s Greene, ECB's Elderson & Lane, Fed’s Waller, Barkin & Collins. Supply from the Netherlands, Italy & Germany. Earnings from UnitedHealth, JPMorgan, Goldman Sachs, Wells Fargo, Citi, Johnson & Johnson.
• Click for the Newsquawk Week Ahead.

IRAN CONFLICT

• US President Trump said the Houthis are misbehaving very badly and that he spoke with Saudi Crown Prince MBS about attacks, while he also stated that oil will drop when the war with Iran ends very soon and that the Midterm elections will have no impact on his decisions regarding Iran.
• US President Trump said Iran will never get nuclear weapons and that this war will end very soon, with gas prices to go down as soon as the war ends, while Trump said he had to change the course a little bit on Iran because they couldn't let Iran get a nuclear weapon.
• US President Trump posted, "I see so many comments from the Radical Left Morons and Lunatics that China and Russia are helping the “wonderful” Islamic Republic of Iran. If they are, it’s at a very low level, but I don’t believe they are at all. They have too much to lose, and we would know about it, and know about it very fast!"
• IRGC commander-in-chief said no extra-regional power has the right to threaten and maintain a hegemonic presence or interfere in the Strait of Hormuz and the Persian Gulf.
• Iran's ambassador rejected the UK's claims regarding the Fairford base, according to IRNA.
• Iran is fortifying defences, rallying loyalists and threatening a wider, harsher response against the US and its Gulf allies as it prepares for a potential resumption of attacks after the Midterms and seeks to deter them, according to WSJ.
• Explosions were reported in Saudi Arabia following a missile and drone attack, according to Sabereen News.
• Houthi official warned the US of a "swift and painful response" if it enters the war in Yemen, while the official said the group would not deliberate over its response if the US became involved in the conflict amid reports that Saudi Arabia had requested US assistance against the Houthis. He also warned employees and workers at Saudi oil facilities and airports to stay away from the sites, describing them as legitimate targets, according to Sky News Arabia citing AFP.
• Yemen's Houthis said they targeted Riyadh Airport with ballistic missiles on Monday, while the group also carried out an operation targeting Khamis Mushait Air Base with a drone. Furthermore, it was reported that air traffic at King Fahd International Airport in Dammam was temporarily halted.
• Saudi Arabia conducted airstrikes on Yemen's Amran and Hodeidah provinces, while local sources reported intense airstrikes targeting Houthi military sites in Sanaa.

US TRADE

EQUITIES

• US stocks were mixed on Monday, with the Nasdaq underperforming while the Dow advanced and the S&P 500 was little changed. Most sectors finished in the green, led by Energy and Communication Services, while Technology and Consumer Discretionary lagged, weighing on the Nasdaq. Technology stocks were pressured by weakness in chip and memory names, particularly Micron (MU), after China's CXMT announced technological progress on a denser memory chip design, raising concerns over increased competition in the sector. Nonetheless, it was a relatively quiet session amid the Columbus Day federal holiday, although much of the newsflow centred on geopolitical and energy developments over the weekend. Trump announced an agreement with Russian President Putin to lift sanctions on Russian diesel exports in an effort to lower diesel prices for Americans ahead of the midterms. Trump also touted a potential ceasefire agreement between Russia and Ukraine, although neither side confirmed a deal, while Russia struck a Ukrainian power plant, raising further doubts over the prospect of an imminent agreement.
• SPX -0.05% at 7,807, NDX -0.71% at 30,665, DJI +0.41% at 51,867, RUT -0.39% at 2,796.
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TARIFFS/TRADE

• China proposes civil aviation dual-use export rules to facilitate compliant exports for aviation enterprises.
• Taiwan is to impose anti-dumping duties on China's polyamine films.

NOTABLE HEADLINES

• Fed's Hammack (2026 voter) said further monetary policy tightening is needed, while she prefers smaller, more frequent rate moves and believes inflation is returning to target too slowly. Hammack stated that current policy is not restrictive enough, warned of the risk that high inflation becomes entrenched and noted that firms are passing higher input costs on to customers.
• Fed's Hammack (2026 voter) reiterated that more restriction is needed, but she is keeping an open mind on pace of rate hikes and noted that policy restriction will need to hit demand, either through capital spending or consumption. Furthermore, she said inflation pressures are broadening out from AI, with other firms all doing well and ready to invest, while she doesn't want to discourage growth but stated that they may need to 'pull it back a little bit'.

APAC TRADE

EQUITIES

• APAC stocks mostly declined amid a tech sell-off following the mixed handover from Wall Street, where the Nasdaq underperformed as chip and memory names were pressured by China competition concerns after CXMT announced technological progress on a denser memory chip design.
• ASX 200 outperformed its regional peers with price action range-bound as the downside in tech and miners was offset by strength in energy, financials and defensive sectors.
• Nikkei 225 suffered from the tech-related pressure as participants returned from the long weekend.
• KOSPI slumped alongside the tech sell-off, with a sidecar triggered early on due to heavy losses.
• Hang Seng and Shanghai Comp conformed to the tech-led declines across the region, with weakness in autonames after reports that China will cut the VAT export tax rebate rate on new energy vehicles to 9% from 13%.
• US equity futures continued the mixed performance seen during Wall St trade, with the Emini Nasdaq 100 dragged lower by tech woes.
• European equity futures indicate a lower cash market open with Euro Stoxx 50 futures down 0.2% after the cash market closed with gains of 0.5% on Monday.

FX

• DXY softened and gave back some of the prior day's gains amid a decline in yields and as newsflow remained relatively quiet, with geopolitical headlines and commentary remaining in focus, including further strikes between the Saudis and Houthis, while Trump continued to advocate a Russia/Ukraine deal and thinks that Putin wants to make a deal more than Zelensky, as well as called for Zelensky to focus on making a deal, not talk. Elsewhere, Fed's Hammack reiterated her hawkish stance, arguing that further tightening is needed given the slow return of inflation towards target, although she noted that the question for the Fed is now how quickly to make policy more restrictive and expressed a preference for smaller rate adjustments delivered relatively quickly, while the attention this week largely centres on Wednesday's US CPI report, ahead of Fed Chair Warsh's speech at the IMF early Friday morning BST.
• EUR/USD rebounded from a 17-month low but remained in sub-1.1200 territory after underperforming yesterday and as French fiscal concerns linger, while participants also await today's French parliamentary budget debate.
• GBP/USD eked slight gains after support held at the 1.3200 level and as UK PM Burnham seeks closer UK-EU ties.
• USD/JPY retreated amid a weaker dollar and the mostly risk-off mood, but with price action kept within the 158.00 handle, while the latest PPI data from Japan was softer-than-expected.
• Antipodeans were little changed with a muted reaction seen to the RBA Minutes, which noted that the Board was concerned excess demand in the economy was greater than previously assumed and saw an increased risk of persistently elevated inflation, as well as reiterated that it will increase rates further if needed.

FIXED INCOME

• 10yr UST futures climbed higher overnight as cash Treasuries reopened following the Columbus Day holiday, while bond yields fell across the curve in tandem with the tech-driven sell-off in stocks.
• Bund futures rallied amid a flight to quality and price action unfazed by upcoming German final CPI data for September and upcoming issuances, beginning with EUR 5bln in Bobls later today.
• 10yr JGB futures conformed to the upside in global peers and returned to above the 125.00 level, which also follows the softer-than-expected PPI data from Japan.

COMMODITIES

• Crude futures pulled back after gaining yesterday in two-way trade as geopolitics remained in focus with Russia striking Ukrainian energy sites despite Trump's energy ceasefire claim, while Trump also commented that he thinks Putin wants to make a deal more than Zelensky, and reiterated that oil will drop when the war with Iran ends very soon.
• Energy and Oil ministers of countries participating in the Declaration of Cooperation held a meeting on the sidelines of the 17th IEF ministerial meeting and the 25th WPC Energy Congress in Riyadh.
• US Gulf shut in 604.5k BPD or 30% oil production, according to MMA.
• Russia’s Novak said regarding the diesel supply deal that there are talks between the governments of Russia and the US on supply and that they have the possibility to make additional supplies of diesel on global markets.
• Goldman Sachs said it doesn't see significant impacts on global diesel prices from Russian diesel releases.
• Spot gold rebounded from an initial dip, with the recovery facilitated by softer yields and a weaker dollar.
• Copper futures marginally declined with headwinds from the broad risk-off mood across Asia.

CRYPTO

• Bitcoin steadily gained throughout the session and rose above the USD 83,000 level.

NOTABLE ASIA-PAC HEADLINES

• RBA Minutes from the September Meeting stated the Board was concerned excess demand in the economy was greater than previously assumed and it saw an increased risk of persistently elevated inflation, while it reiterated it will increase rates further if needed. All board members had agreed that a 25bps rate hike was necessary, and the Board briefly weighed the case for keeping rates unchanged, including a decline in house prices. Furthermore, it discussed upside inflation risks and factors that could sustain higher inflation, as well as noted that some upside inflation risks had already emerged or intensified since August, and the Board highlighted the need to adjust rates in a timely manner to keep inflation expectations anchored.

DATA RECAP

• Japanese PPI MM (Sep) -0.3% vs. Exp. 0.5% (Prev. -0.2%)
• Japanese PPI YY (Sep) 6.8% vs. Exp. 7.6% (Prev. 7.6%)

GEOPOLITICS

RUSSIA-UKRAINE

• US President Trump said Ukrainian President Zelensky and Russian President Putin have to get together and end the war, while he added that they both don't know how to make a deal, but he thinks they support the energy ceasefire. Furthermore, Trump said he thinks Putin wants to make a deal more than Zelensky, and that Zelensky has to focus on making a deal, not talk.
• Ukraine's Foreign Minister said now is the time for real European pressure on Moscow, calling for frozen assets, trade and transit embargoes, maritime bans, entry bans and other measures rather than half-measures.
• Ukrainian official said a Russian drone strike damaged a cargo facility in Mykolaiv, while a Russian governor reported damage to the Nevinnomyssk industrial area following a Ukrainian drone attack.

OTHER

• US President Trump said he may meet with North Korean leader Kim and it would be exciting, while he also said that he is considering firing the US ambassador to Greece.
• North Korea confirmed it test-fired a tactical ballistic missile, while North Korean leader Kim said North Korean weaponry will be developed and completed more strenuously, according to KCNA.
• Belize's Foreign Ministry rejected China's sanctions and said measures against Belize's Foreign Minister are unwarranted.

EU/UK

NOTABLE HEADLINES

• BoE's Greene (hawkish dissenter) said a bigger risk is not being proactive enough in tackling inflation than raising rates too soon, while she warned if they wait until second-round effects materialise, it will be too late. Greene noted concern about successive supply shocks and stated they must be proactive in leaning against second-round effects, as well as stated that UK monetary policy is not that restrictive.
• ECB's Moulin said the French economy is holding up in the face of the energy shock, but the uncertainty gauge is at its highest since April, while he maintained his Q3 growth estimate at 0.1%.

DATA RECAP

• UK BRC Retail Sales Monitor (Sep YY) 1.0% vs. Exp. 0.7% (Prev. 0.5%)
• UK Barclays Consumer Spending YY (Sep) 2.0% (prev. 2.1%)