US stocks mostly gained amid tech strength following AMD/OpenAI deal - Newsquawk Asia-Pac Market Open

• US stocks were mostly in the green with outperformance in the Nasdaq thanks to the rally in AMD shares after it signed a deal with OpenAI in which the latter is to deploy 6 gigawatts of AMD GPUs based on a multi-year agreement, while US macro updates were light, given the US government shutdown entering its second week and with little sign of progress on a reopening so far. Nonetheless, the sectors were predominantly firmer, with Consumer Discretionary, Tech and Utilities leading the gains, while Real Estate, Consumer Staples and Health Care underperformed.
• USD was bid which was largely due to the heavy JPY selling after the Japanese LDP election and as US newsflow remained on the quiet side with the government shutdown entering its second week, while the absence of tier-1 releases and Fed speak left international developments as the main drivers.
• Looking ahead, highlights include Australian Westpac Consumer Sentiment, Japanese Household Spending & Leading Index, Philippines CPI, Supply from Japan, Holiday Closures in South Korea, Mainland China & Hong Kong.

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LOOKING AHEAD

• Highlights include Australian Westpac Consumer Sentiment, Japanese Household Spending & Leading Index, Philippines CPI, Supply from Japan, Holiday Closures in South Korea, Mainland China & Hong Kong.
• Click for the Newsquawk Week Ahead.

US TRADE

• US stocks were mostly in the green with outperformance in the Nasdaq thanks to the rally in AMD shares after it signed a deal with OpenAI in which the latter is to deploy 6 gigawatts of AMD GPUs based on a multi-year agreement, while US macro updates were light, given the US government shutdown entering its second week and with little sign of progress on a reopening so far. Nonetheless, the sectors were predominantly firmer, with Consumer Discretionary, Tech and Utilities leading the gains, while Real Estate, Consumer Staples and Health Care underperformed.
• SPX +0.36% at 6,740, NDX +0.78% at at 24,979, DJI -0.14% at 46,695, RUT +0.41% at 2,486.
• Click here for a detailed summary.

TARIFFS/TRADE

• US President Trump said all medium and heavy-duty trucks coming into the US from other countries will be tariffed at 25%, beginning November 1st, 2025.
• US President Trump said he had a very good phone call with Brazilian President Lula, while he added they discussed the economy and trade, and will be having further discussions.
• Brazil's President Lula asked US President Trump to withdraw the 40% tariff on Brazilian goods, according to a Brazilian government statement.
• White House said US President Trump is to host Canadian PM Carney on Tuesday, and to host the President of Finland on Thursday, while it stated that trade will be a topic of talks with Carney.
• White House said that tariff rebates are an idea that is being discussed, but no decision has been made.
• White House crypto and AI czar Sacks sees a strong case for not selling the latest AI chips to China and sees Nvidia (NVDA) CEO Huang as a strategic asset in the AI race.
• European Commission intends to propose tariffs of 50% on steel imports worldwide above a quota set at 2013 levels on Tuesday, according to FT, citing a document.

NOTABLE HEADLINES

• US President Trump posted "JUST OUT: Good news for the Holiday Season. EARLY PRICES ARE DOWN, WHILE TARIFFS ARE MAKING OUR COUNTRY AN ECONOMIC POWER AGAIN. Also, virtually NO INFLATION, AS STOCK MARKETS CONTINUALLY HIT RECORD HIGHS."
• Some of US President Trump's hard-line deputies are reportedly beginning to accept the political risk of allowing ACA credits to expire and are preparing proposals, according to Politico citing sources.
• White House said the OMB is continuing to work with agencies on layoffs of federal workers.
• Interviews by Treasury Secretary Bessent "for the next Fed Chairman with the first round of 11 candidates will be concluded this week", according to sources cited by Fox's Lawrence.

FX

• USD was bid which was largely due to the heavy JPY selling after the Japanese LDP election and as US newsflow remained on the quiet side with the government shutdown entering its second week, while the absence of tier-1 releases and Fed speak left international developments as the main drivers.
• EUR faced pressure amid the political uncertainty in France owing to the PM's resignation after recent appointments to the new cabinet were met with heavy disapproval from opposing parties, while President Macron asked outgoing PM Lecornu to hold final talks with political partners to stabilise the country.
• GBP traded little changed against the dollar with price action hampered by a lack of UK-specific drivers.
• JPY underperformed after Sanae Takaichi's LDP election victory, who is widely seen as an advocate for looser fiscal policy and for a delayed BoJ rate hike cycle, which lifted USD/JPY to the 150.00 handle and prompted comments from an adviser Honda, who noted that USD/JPY going above 150 is a "bit too much".

FIXED INCOME

• T-notes bear steepened ahead of supply while the government remained in shutdown.

COMMODITIES

• Oil prices gained after the modest OPEC+ output hike for November albeit with the upside capped, while Saudi Arabia maintained its OSP to Asia.
• Saudi Arabia maintained November Arab Light Crude oil OSP to Asia at plus USD 2.20/bbl vs Oman/Dubai, while it set the OSP to NW Europe at plus USD 1.35/bbl to ICE Brent settlement and set the November crude OSP to the US at plus USD 3.70/bbl vs ASCI.

GEOPOLITICAL

MIDDLE EAST

• IDF spokesperson said Israel attacked Hezbollah targets in the Bekaa area in Lebanon.
• White House said technical talks are happening now on the Gaza plan, and the administration is working to move ahead as quickly as they can.
• Hamas is concerned about the lack of guarantees for the implementation of the agreement after the release of the hostages, according to journalist Elster on X.

RUSSIA-UKRAINE

• US is preparing an arms deal with Ukraine that will see Kyiv supply military technology to Washington, according to Semafor.
• Russia's Kremlin said US President Trump's language on nuclear limits provides some ground for optimism, while it also stated that there is no reason to blame Russia for the drone sightings in Europe.

OTHER

• Venezuelan President Maduro’s top negotiator Rodriguez, said Venezuela uncovered plans to set off explosives in the US Embassy and that the plans come from extremists in the far-right movement.

ASIA-PAC

NOTABLE HEADLINES

• Japan's Honda (adviser to incoming PM Takaichi) said USD/JPY going above 150 is a "bit too much".

EU/UK

NOTABLE HEADLINES

• Numerous UK firms met with Chancellor Reeves on Monday, as she targets a revival of the UK's IPO market, according to Sky News.
• French PM Lecornu resigned and presented his resignation to President Macron. It was later reported that French President Macron said he has asked outgoing PM Lecornu to hold final talks with political partners to stabilise the country, while Lecornu said he has accepted President Macron's request for last-ditch talks and will tell him by Wednesday evening if it is possible or not, so he can draw the appropriate conclusions.
• French Minister of the Armed Forces Le Maire announced he is stepping down from the new government.
• ECB President Lagarde reiterated that the disinflationary process is over and noted that despite heightened uncertainty, the euro area economy has held up well. Lagarde reiterated they will continue to determine the appropriate monetary policy stance by following a data-dependent and meeting-by-meeting approach, while she added they are not pre-committing to a particular rate path.
• ECB's de Guindos said inflation risks are balanced and that consumption has grown less than expected, while he added the uncertainty level is still very high. Furthermore, he said the policy rate is appropriate and there is no pre-determined rate path.
• ECB's Lane reiterated a "data-dependent and meeting-by-meeting approach to determining the appropriate monetary policy stance, with no pre-commitment to a particular rate path".
• ECB's Pereira said that policy is entering a period of greater normalcy.

DATA RECAP

• UK S&P Global Construction PMI (Sep) 46.2 (Prev. 45.5)
• French HCOB Construction PMI (Sep) 42.9 (Prev. 46.7)
• German HCOB Construction PMI (Sep) 46.2 (Prev. 46)
• EU HCOB Construction PMI (Sep) 46.0 (Prev. 46.7)
• EU Sentix Index (Oct) -5.4 vs. Exp. -8.5 (Prev. -9.2)
• EU Retail Sales MM (Aug) 0.1% vs. Exp. 0.1% (Prev. -0.5%, Rev. -0.4%)
• EU Retail Sales YY (Aug) 1.0% (Prev. 2.2%, Rev. 2.1%)