Aaron Gifford via The Epoch Times,

Two years after the U.S. Supreme Court decision prohibiting racial preference in higher education admissions, the nation’s oldest university is reporting a decline in undergraduate black student enrollment.

Harvard University, in a profile of the Class of 2029 released today, noted that black American students make up 11.5 percent of the freshman class. That’s a decrease of 2.5 percent from last year, 2.6 percent from 2023, and 5.1 percent from 2020, according to undergraduate data released by the school each year.

In 2023, the Supreme Court sided with plaintiffs, Students for Fair Admissions, which sued Harvard on the grounds that the university denied applicants of Asian descent because that group overrepresented the undergraduate student body, violating Civil Rights laws.

Asian students, meanwhile, make up 41 percent of Harvard’s undergraduate Class of 2029, up from 37 percent in last year’s freshman class and 29.8 percent in 2023.

“The class of 2029 was drawn from big cities and small towns, suburbs, and farms; and from nations around the world,” William Fitzsimmons, Harvard’s dean of admissions and financial aid, said in the Oct. 23 announcement on the university website.

“No matter where they’re from and what their personal circumstance might be, they were admitted to Harvard because they share the extraordinary potential to change the world.”

According to The Harvard Gazette, the class of 2029 also includes 11 percent self-identified Hispanic or Latino and nearly 2 percent Native American, Native Hawaiian, or Pacific Islander.

Students for Fair Admissions also recently took action against the U.S. service academies, reaching a settlement with the Department of Defense to end race-based admissions at West Point and the Air Force Academy, and filing a lawsuit against the Coast Guard Academy over racial preferences in its commissioning program, according to the organization’s website.

President Donald Trump issued executive orders affirming Civil Rights laws that prohibit racial preferences in university hiring and student admissions and, following investigations, sanctioned Harvard and several other elite institutions.

In August, he issued a directive requiring colleges and universities to publicize acceptance rates, enrollment figures, and average applicant grade point averages and SAT (Scholastic Aptitude Test) scores by race and gender.

In recent years, many competitive higher education institutions have eliminated SAT requirements and instead mandated personal statements or essays from student applicants, raising concerns that they are being used to ideologically screen applicants for entry.

Matthew Beienburg, education policy director at the Goldwater Institute, said those changes are an attempt to preserve racial preferences in admissions.

“The left believes standardized testing promotes racial inequality,” he previously told The Epoch Times. “They pushed [for substituting tests with personal essays] very hard.”

Harvard’s Class of 2029 also noted that 2,003 undergraduate applicants out of 47,893 applicants were accepted, and that nearly half of the 1,675 first-year students won’t be required to pay tuition.

International students make up 15 percent of the freshman class, which also represents 92 nations and all 50 states, the profile report stated.

Update (1454ET):

Ontario Premier Doug Ford has announced that the $75 million informational campaign targeting Americans will pause on Monday. This means the television commercials in which Canada attempted to persuade Americans on trade policy will come to an end.

America’s neighbors to the north screwed around and found out the consequences late Thursday night, when President Trump terminated all trade negotiations in response to the ads attacking U.S. tariffs.

Late Friday afternoon, Ford took to X and wrote:

Our intention was always to initiate a conversation about the kind of economy that Americans want to build and the impact of tariffs on workers and businesses. We’ve achieved our goal, having reached U.S. audiences at the highest levels. I’ve directed my team to keep putting our message in front of Americans over the weekend so that we can air our commercial during the first two World Series games.

In speaking with Prime Minister Carney, Ontario will pause its U.S. advertising campaign effective Monday so that trade talks can resume.

The people elected our government to protect Ontario, our workers, businesses, families and communities. That’s exactly what I’m doing. Like I said earlier today: Canada and the U.S. are neighbors, friends and allies. We’re so much stronger when we work together. Let’s work together to build Fortress Am-Can and make our two countries stronger, more prosperous and more secure.

Our intention was always to initiate a conversation about the kind of economy that Americans want to build and the impact of tariffs on workers and businesses. We’ve achieved our goal, having reached U.S. audiences at the highest levels. I’ve directed my team to keep putting our…

— Doug Ford (@fordnation) October 24, 2025

Canada bends the knee.

Not a good look for globalist Carney.

*  *  * GET IN ON BLADE OF THE MONTH… CLICK BELOW

President Trump has terminated all trade talks with Canada amid an information war waged by the Ontario provincial government, which has criticized U.S. tariffs. Canada’s propaganda ad campaign has appeared on Newsmax and Bloomberg, with additional placements scheduled for Fox News, Fox Sports, NBC, CBS, CNBC, ESPN, ABC, and local channels.

The advertisement uses audio from former President Ronald Reagan to remind Americans of the negative consequences of tariffs. 

“High tariffs inevitably lead to retaliation by foreign countries and the triggering of fierce trade wars,” Reagan said, adding, “Then the worst happens: Markets shrink and collapse, businesses and industries shut down, and millions of people lose their jobs.”

Late Thursday night, President Trump wrote on Truth Social, “The Ronald Reagan Foundation has just announced that Canada has fraudulently used an advertisement, which is FAKE, featuring Ronald Reagan speaking negatively about Tariffs.”

“The ad was for $75,000,000. They only did this to interfere with the decision of the U.S. Supreme Court, and other courts. TARIFFS ARE VERY IMPORTANT TO THE NATIONAL SECURITY, AND ECONOMY, OF THE U.S.A. Based on their egregious behavior, ALL TRADE NEGOTIATIONS WITH CANADA ARE HEREBY TERMINATED,” Trump emphasized. 

Before Trump’s Truth Social post, on X, the Ronald Reagan Foundation blasted the “ad campaign using selective audio and video of President Ronald Reagan delivering his “Radio Address to the Nation on Free and Fair Trade,” dated April 25, 1987,” adding, “The ad misrepresents the Presidential Radio Address, and the Government of Ontario did not seek nor receive permission to use and edit the remarks.” 

Listen to President Reagan’s unedited remarks here: https://t.co/1gQUcbR4eZ pic.twitter.com/iqmjSuypp0

— Ronald Reagan Presidential Foundation & Institute (@RonaldReagan) October 24, 2025

In markets, UBS analyst Jason Poh told clients that “USDCAD has a knee-jerk jump, 30+ pips” after Trump announced all trade talks were terminated. 

Foreign governments attempting to shape U.S. trade policy or U.S. politics is not new, but this was certainly a bold move by Canada during trade talks.

. . . 

The US military’s strikes on alleged drug boats near Venezuela are growing, and War Secretary Pete Hegseth has just announced another one Friday morning, which marks the third such attack this week, after two boats were destroyed on the Pacific side of Latin America earlier this week.

“Overnight, at the direction of President Trump, the Department of War carried out a lethal kinetic strike on a vessel operated by Tren de Aragua (TdA), a Designated Terrorist Organization (DTO), trafficking narcotics in the Caribbean Sea,” Hegseth announced on social media. He said that “all six terrorists” were killed and no American forces were harmed in the new operation. This appears to be at least the ninth such attack – and at least third in less than a week.

Big questions have persisted over just how the US knows it is attacking drug smuggling boats, and not mere fishing vessels. Journalists have been turning up the pressure on the White House to provide evidence.

Hegseth tried to preempt such inquiries in his Friday statement, which continued, “The vessel was known by our intelligence to be involved in illicit narcotics smuggling, was transiting along a known narco-trafficking route, and carrying narcotics.”

Interestingly, the Pentagon chief noted it was the first strike conducted at night since the anti-Venezuela and anti-drug operations started.

He then reiterated the following message: “If you are a narco-terrorist smuggling drugs in our hemisphere, we will treat you like we treat Al-Qaeda. Day or NIGHT, we will map your networks, track your people, hunt you down, and kill you.”

President Trump in fielding questions from reporters the day before talked about just ‘killing’ drug smugglers and that no declaration of war or any kind of legal process for that matter is needed…

“I’m not going to necessarily ask for a declaration of war,” he said. “I think we’re just doing to kill people that are bringing drugs into our country. Okay? We’re going to kill them, you know, they’re going to be like, dead.”

JUST IN: President Trump fires back after reporter asks him why he doesn’t get approval from Congress for taking out narco-terrorists.

Reporter: Why not just ask for a declaration of war?

Trump: I think we’re just going to kill people that are bringing drugs into our country.… pic.twitter.com/N1owgnvt6V

— Collin Rugg (@CollinRugg) October 23, 2025

Geopolitical commentator Arnaud Bertrand has pointed out that Trump just honestly and openly reveals the face of US Empire:

People are in shock over this but Trump, as per his habit, is only putting in blunt terms what all US presidents have been doing for decades. “Nobel Peace Prize Obama” is the one who industrialized extrajudicial killings, officially ordering 540 drone strikes during his presidency (https://cfr.org/blog/obamas-final-drone-strike-data), so 1 to 2 a week on average, killing thousands of people with no due process whatsoever.

Indeed, Obama even one time killed a 16-year old American citizen and resident of Colorado by drone strike in Yemen, and he and his press secretary merely shrugged it off.

Still, Trump has some serious questions to answer, and a handful of Congressmen including Sen. Rand Paul try to reel in these latest foreign adventures off Latin America.

The ongoing trade war between the US and Canada barely registers on the radar for most of the American public, largely because it doesn’t affect their wallets in any significant way.  However, on the Canadian side of the border, the economic conflict dominates headlines and discussion.  Average Canadians face significant uncertainty and Canada’s export markets are teetering on the brink of crisis. 

The lesson here?  Perhaps it’s a bad idea to engage in brinkmanship with the US when the US buys 76% of your exports?  Canada’s exports represent 33% of their total annual GDP, while US exports are only 10% of GDP.  That is to say, Canada needs the US far more than the US needs Canada.  The numbers are clear as day.

The Trump Administration’s recent announcement that all trade negotiations with Canada have been shut down requires some analysis of future consequences.  The trigger for the cancellation was a Canadian ad aimed at US conservatives featuring excerpts of a Ronald Reagan speech with criticisms on tariffs. 

According to the Ronald Reagan Foundation, the ad uses selective editing to present a false picture of Reagan’s position on trade protections.  It is true that Reagan was generally a proponent of globalization, but he also instituted a number of protectionist policies during his two terms as US President.  Reagan pressured Japanese car makers to adopt import restraints on automobiles, which remained in effect until 1985.  Japan was told that if they did not accept the restraints, Congress would pass harsher measures.

Additionally, Reagan imposed protectionist measures on textiles, specialty steel, Canadian wood products, Italian pasta, motorcycles, and even mushrooms during his two terms. In 1986, Reagan threatened to impose a 200 percent tariff on Spain for its restrictions on U.S. grain imports.

That said, Reagan’s affinity for globalism also helped to accelerate the eventual collapse of US manufacturing jobs, which were ultimately outsourced to third world countries with cheap labor sources.  The American middle class has been in steep decline ever since globalist policies were instituted. 

Canada’s political advertisement is an attempt to exploit conservative nostalgia for the Reagan era while deliberately ignoring the nuances of his trade views.  Not to mention, it shows that the Canadian government has no intention of addressing the parasitic relationship imposed on Americans through NAFTA and the USMCA.  Numerous American industries have been crushed in the wake of these trade agreements. 

Trump’s fury over Canada’s propaganda efforts is understandable, because it shows they would rather try to manipulate the American electorate rather than engage in sincere negotiations.  This is a mistake on their part; manufacturing is now fleeing Canada.

Approximately 185,000 jobs have vanished in Canada since the beginning of the trade war.  The majority of these jobs have come from the manufacturing sector.  Companies shifting jobs away from Canada and to the US include:  Stellantis, General Motors, and multiple steel producers.  If tariffs continue, the country is projected to lose another 140,000 jobs by the end of 2025. 

Canada’s GDP for 2025 is estimated to decline 2.6% to rest at 0.4%, equating to $78 billion in lost economic output.  Prices also continue to skyrocket on basic necessities including food and housing. 

Prime Minister Mark Carney has announced a plan to shift reliance on US markets and expand exports to other trading partners, but this plan is naive.  The US represents 30% of all global consumer markets, and Canada has enjoyed the good fortune of sharing a border with the biggest single buyer of exports in the world.  Meaning, the cost of moving goods is minimal, which maximizes profits for companies based in Canada.  Trying to recreate these conditions with alternative buyers overseas is impossible.

Long term option for Canada include moving away from manufacturing and focusing on natural resources, which they have in abundance.  Again, this still requires access to the US for any substantial exports, not to mention investments for exploration.  As of 2023, the U.S. had a total FDI position of $452 billion in Canada across all sectors. This represents a significant portion of all foreign investment in the country. 

Carney’s apparent arrogance on trade is perhaps driven by his progressive and globalist ideology, and as we have seen time and time again with the far-left, they don’t know how to admit they’re in over their heads.  They only double down.  Therefore, it’s likely that Carney will continue to blunder through negotiations with the US and lead Canada into economic disaster.  

U.S. Trade Representative Jamieson Greer announced moments ago that the U.S. has initiated a Section 301 investigation into China’s implementation of the Phase One trade deal, a deal that has been out of public focus since President Trump’s first term. This development comes less than one week before Trump and Chinese President Xi Jinping are scheduled to meet on the sidelines of the Asia-Pacific Economic Cooperation summit to ease trade tensions. The flurry of recent trade-related headlines, from rare earths to soybeans to jet engines, suggests that both economic superpowers are attempting to build leverage ahead of trade talks.

“President Trump made history in his first term when he stood up for the American worker and brokered the Phase One Agreement, establishing a more fair and reciprocal trade relationship with China,” Ambassador Greer stated.

Greer wrote in a statement, adding, “The initiation of this investigation underscores the Trump Administration’s resolve to hold China to its Phase One Agreement commitments, protect American farmers, ranchers, workers, and innovators, and establish a more reciprocal trade relationship with China for the benefit of the American people.”

USTR provided additional context on the Phase One trade deal reached in December 2019, which required China to implement structural reforms in areas such as intellectual property, technology transfer, agriculture, and financial services, and to significantly increase purchases of U.S. goods and services. Beijing’s shift toward sourcing agricultural products from the U.S. to Brazil has inflicted pain across America’s Midwest farm belt, and is likely one key reason this probe was opened. 

Five years after the agreement was signed, China has not fulfilled its commitments, particularly regarding non-tariff barriers, market access, and purchase targets. Ahead of next week’s Trump-Xi meeting at APEC, Greer will investigate whether China’s failure to comply with the Phase One deal violates U.S. trade rights under Section 301.

Despite the probe, President Trump said on Thursday, “I think we’re going to come out very well and everyone’s going to be very happy.”

The Trump-Xi meeting also comes just before a trade truce between Washington and Beijing is set to expire on November 10. Trump has threatened to impose an additional 100% tariff on Chinese products on November 1 if Beijing does not ease shipments of rare earth minerals to the U.S. Trump said this week that upcoming talks with Xi will produce a “good deal” on “everything” related to trade.

Market attention now turns to any weekend statements from both sides. So far, the market reaction has been muted across equities, bonds, and FX, as a cooler CPI print in the U.S. has pushed main equity indexes to around noontime.  

General Motors Co. laid off more than 200 salaried employees on Friday, mostly at its Tech Center in Warren, Michigan, according to Bloomberg.

The cuts, announced around 7 a.m. via a Slack message, were attributed to “business conditions” rather than performance, according to people familiar with the meeting.

A GM spokesperson said the move targeted overlapping roles in design engineering, explaining, “We’re restructuring our design engineering team to strengthen our core architectural design engineering capabilities. As a result, a number of CAD execution roles have been eliminated. We recognize the efforts and accomplishments of the impacted team members, and we thank them for their contributions.”

Bloomberg writes that the job reductions are part of a broader effort to streamline operations and boost profitability amid tariffs and slower electric-vehicle sales. Earlier in the week, GM reported stronger-than-expected third-quarter earnings, driven by robust sales of high-margin trucks and SUVs.

Recall, just days ago, the automaker delivered stronger-than-expected third-quarter results and raised its 2025 outlook. The company reported adjusted EPS of $2.80 versus $2.31 expected and revenue of $48.59 billion versus $45.27 billion.

CEO Mary Barra said at the time: “Thanks to the collective efforts of our team, and our compelling vehicle portfolio, GM delivered another very good quarter of earnings and free cash flow… we are raising our full-year guidance, underscoring our confidence in the company’s trajectory.”

GM now expects $12–$13 billion in adjusted EBIT and $9.75–$10.50 in adjusted EPS for the year, both above prior forecasts. The company also lowered its expected tariff impact to between $3.5 billion and $4.5 billion, down from $4–$5 billion previously.

Barra thanked President Trump for “the important tariff updates” announced last week, which included new levies on imported trucks and parts as well as an offset for U.S.-made vehicles.

Despite EV-related headwinds—only about 40% of GM’s electric models are profitable on a production basis—CFO Paul Jacobson reaffirmed the company’s long-term commitment to electrification, saying, “We continue to believe there is a strong future for electric vehicles.” Gains in China, international markets, and GM Financial helped offset weaker North American margins, as GM focuses on restoring its regional profitability to the 8–10% range.

GM’s stronger outlook also reflects booming demand for its high-margin pickups and SUVs, which delivered the company’s best year-to-date truck and Escalade sales since 2018 and 2007, respectively, and record results for the GMC brand, according to Bloomberg. CEO Mary Barra highlighted that GM is “very well positioned as we invest to increase our already significant domestic sourcing and manufacturing footprint,” thanking President Trump for extending tariff discounts through 2030.

Authored by Steve Watson via Modernity.news.

In a move clearly designed to help illegal aliens avoid the authorities, the Democratic Party has proposed adding an ICE tracker to its website to allow anyone to track the movements of agents.

Labelling it a “master” ICE tracker, Rep. Robert Garcia announced the plan alongside Los Angeles Mayor Karen Bass.

NEW: Democrats are planning to launch a “master” ICE-tracker on their website. pic.twitter.com/aYbtH36kJF

— Fox News (@FoxNews) October 22, 2025

Less than a month ago, Apple removed an  app called ICEBlock from its App Store because it allowed users to report the locations of ICE agents ahead of raids, both putting them in danger and helping illegal aliens evade justice.

Apple acquiesced following pressure from the Justice Department after a demented leftist carried out a shooting at an ICE detention facility in Dallas. 

Attorney General Pam Bondi declared “ICEBlock is designed to put ICE agents at risk just for doing their jobs, and violence against law enforcement is an intolerable red line that cannot be crossed.”

🚨 BREAKING: Apple has finally TAKEN DOWN the ICEBlock app, which was used by leftists like the Dallas ICE shooter, to dox the location of ICE agents

Good, but this took WAY too long.

The Trump DOJ intervened, pushing Apple to make the move.

“We reached out to Apple today… pic.twitter.com/A18vZGjvkH

— Nick Sortor (@nicksortor) October 3, 2025

Now Democrats want to directly enable the exact same thing on their own website.

Acting ICE director Todd Lyons urged that the move would be akin to “giving a map to a hitman.”

🚨”LIKE GIVING A MAP TO A HITMAN.”

Acting @ICEgov Director Todd Lyons responds to Democrats’ plan to create a public tool to track I.C.E. agents.@FoxNews | @DHSgov pic.twitter.com/wu1dRg3CG7

— America’s Newsroom (@AmericaNewsroom) October 22, 2025

The Department of Homeland Security described the development as dangerous, further noting “Anyone who actively obstructs law enforcement in the performance of their sworn duties or assaults law enforcement, including U.S. citizens, will face consequences.”

ICE tracking apps and websites directly put the lives of ICE law enforcement and their families in danger.

Less than a month after a deranged gunman — who used an ICE tracking app to plan his attack — opened fire at the Dallas ICE facility, California politicians are pushing to… pic.twitter.com/a1JUWo2JuT

— Homeland Security (@DHSgov) October 22, 2025

ICE agents have repeatedly come under sustained attacks from lunatic leftists.

Of course the Democrats want this.

If an ICE agent gets killed or attacked and it’s found they used the tracker it could lead to massive legal ramifications.

— Rich Doherty (@ChiTownGrowz) October 22, 2025

Not playing politics here, but asking a serious question: How is this not a criminal act intentionally putting the lives of law-enforcement officials in danger?

— Douglas Hargett 🇺🇸 (@douglashargett) October 22, 2025

Seems unlawful and un-American, so of course Democrats concocted this evil scheme.

— JWF (@JammieWF) October 22, 2025

There is one way of countering it:

Well, I expect everyone to submit false ICE sightings and overload their network.

— Emerson Miller (@e_millertyme) October 22, 2025

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

The French blue-chip CAC 40 is lower on the session, and the spread between 10-year French and German yields has widened, signaling that the political turmoil is far from over.

On Friday, France’s Socialist Party threatened to sink Prime Minister Sébastien Lecornu’s minority government as soon as next week unless the 2026 budget includes 15-20 billion euros in additional taxes. Without Socialist support in parliament, no-confidence motions would likely pass, toppling the government.

“If in the coming hours, basically until next Monday, there is no clear change to the text, there would be no margin for maneuver on the budget bill or the social security bill, so it would in reality all be over,” Socialist leader Olivier Faure stated on the 24-hour French news television channel BFM television, earlier today.

S’il n’y a pas d’évolution sur les budgets de l’État et de la Sécurité sociale pour plus de justice sociale et fiscale d’ici lundi, les socialistes voteront contre et censureront ce gouvernement.

On ne peut pas demander aux retraités, aux malades, aux jeunes, aux classes… pic.twitter.com/GK79MMXn5F

— Olivier Faure (@faureolivier) October 24, 2025

Bloomberg noted, “The threats from the Socialist party chief come as the group treads a tricky line between getting more out of Lecornu on fiscal plans while avoiding fresh elections. The ouster of yet another premier would likely result in a snap legislative vote, in which polls suggest Socialists would fare poorly.”

At the beginning of the week, UBS analyst Simon Penn told clients that Lecornu “might not make it until year-end.” With how things are going this week, he might not make it until the end of next week.

Here is what Penn told UBS clients:

French PM Lecornu Might Not Make It Until Year-End

Political advisory group Forefront isn’t convinced French Prime Minister Lecornu will remain in office until the end of the year.

His basic problem is the same one that each of his predecessors has faced – he is going to struggle to pass a budget.

The Socialists were clear last week: they were willing to lend their support to get Lecornu through confidence votes, but that didn’t mean they supported his budget proposals. Forefront noted that the first thing Lecornu will need to do is enact the suspension of pension reform. He might be able to get that through the National Assembly, but the right-leaning Senate is opposed. If it fails in the Senate, it will go to a joint committee, and since that has a center-right bias, a decision to suspend pension reform will likely hinge on a raft of other requirements. This brings it full circle – the National Assembly is unlikely to accept those.

Odds on the cryptocurrency-based prediction market Polymarket show 13% that Lecornu is out by the end of next week. About 12 hours ago, these odds were 4%. Odds for Lecornu’s ouster by the end of the year jumped from 37% to as high as 51% on Friday.

In regional bond markets, France’s 10-year yield premium over Germany widened to 81 basis points on Friday, the highest in 10 days, according to Bloomberg data. This remains below the 89 basis point peak during Lecornu’s resignation, but it indicates that markets are beginning to price in greater uncertainty ahead of next week.

Modest selling pressure on CAC 40…

And next week may bring fireworks in French politics.

With vol markets fully clenched, this morning’s much-anticipated CPI print (no matter how full of guesstimated data) is sure to prompt an initial flurry of trading activity but as we detailed in our preview, absent some major outlier, is likely to be mostly irrelevant with rate-cut expectations now fully pricing in 2 x 25bps cuts for the rest of the year.

As a reminder, this data was supposed to originally be revealed on Oct 15 and would have been indefinitely delayed had the White House not intervened with a demand that the BLS recall staff and figure out what the number is and report it today at 8:30amET.

Just as we suggested, the headline data was a miss (cooler than expected)…

CPI Preview: Likely A Miss But Mostly Irrelevant https://t.co/hEwPttKmOG

— zerohedge (@zerohedge) October 24, 2025

…rising 0.3% Mom (vs +0.4% exp), with the YoY print at 3.0% (below expectations of +3.1% but higher than the 2.9% YoY print in August).

Source: Bloomberg

That is the hottest YoY headline CPI since January.

Energy costs rose but Services slowed…

Source: Bloomberg

Headline CPI highlights:

• The index for gasoline rose 4.1% in September and was the largest factor in the all items monthly increase, as the index for energy rose 1.5% over the month.

  • The gasoline index increased 4.1 percent over the month.

  • The index for electricity decreased 0.5 percent over the month and the index for natural gas decreased 1.2 percent over the same period.

• The food index increased 0.2% over the month as the food at home index rose 0.3% and the food away from home index increased 0.1%

  • Four of the six major grocery store food group indexes increased in September.

  • The index for other food at home rose 0.5 percent over the month after rising 0.1 percent in August.

  • The cereals and bakery products index and the nonalcoholic beverages index both increased 0.7 percent in September

  • The dairy and related products index declined 0.5 percent in September as the cheese and related products index decreased 0.7 percent. The index for fruits and vegetables was unchanged over the month

  • The index for limited service meals rose 0.2 percent over the month while the index for full service meals was unchanged

• Other indexes with notable increases over the last year include medical care (+3.3%), household furnishings and operations (+4.1%), recreation (+3.0%), and used cars and trucks (+5.1%).

Energy Services costs and Used Car prices fell MoM (along with electricity costs – which is odd given the massive increase in demand via AI Data Center build outs) but Gasoline costs rose notably…

…something that will be erased next month as oil prices tumbled…

On an annual basis, the shelter index increased 3.6% over the last year (but continues to slow dramatically).

• Rent inflation rose 3.40% YoY in Sept, down from 3.49% in Aug and the lowest YoY increase since Dec. 2021; it was also up 0.17% MoM, the smallest monthly increase since August 2021

• Shelter inflation rose 3.58% in Sept, down from 3.63% in Aug and the lowest annual increase since Oct 2021; it was also up 0.28% MoM, down from 0.34% in Aug.

A similar pattern was seen in Core CPI data with the print rising 0.2% MoM (below expectations of +0.3%), but pulled the YoY print down to 3.0% (down from 3.1% in August), the lowest since June…

Source: Bloomberg

Core CPI highlights:

• Indexes that increased over the month include shelter, airline fares, recreation, household furnishings and operations, and apparel

• The indexes for motor vehicle insurance, used cars and trucks, and communication were among the few major indexes that decreased in September.

Core CPI details:

• The shelter index increased 0.2 percent over the month.

  • The index for owners’ equivalent rent rose 0.1 percent in September, the smallest 1-month increase in that index since January 2021.

  • The rent index increased 0.2 percent over the month.

  • The index for lodging away from home rose 1.3 percent in September.

• The index for airline fares increased 2.7 percent over the month, after rising 5.9 percent in August.

• The recreation index rose 0.4 percent in September as did the household furnishings and operations index.

• The index for apparel rose 0.7 percent over the month and the index for personal care increased 0.4 percent.

• The new vehicles index rose 0.2 percent in September.

• The index for used cars and trucks also decreased 0.4 percent over the month and the index for communication declined 0.2 percent.

• The motor vehicle insurance index declined 0.4 percent in September, after being unchanged in August.

• The medical care index increased 0.2 percent over the month, after declining 0.2 percent in August.

• The index for hospital services increased 0.3 percent over the month, as did the index for prescription drugs.

• The dental services index decreased 0.6 percent in September and the physicians’ services index declined 0.1 percent.

Core Services costs declined significantly…

Source: Bloomberg

Finally, SuperCore CPI (Services Ex-Shelter) also saw its YoY print slow to +3.30% (the slowest since May)…

Source: Bloomberg

Transportation Costs slowed dramatically in September…

Source: Bloomberg

On a 3m and 6m annualized basis there is no sign of the hyped-up tariff-driven inflation that the left and their establishment puppets have been screaming about for months…

Source: Bloomberg

Summing up September’s (delayed) data, Services inflation slowed to its weakest since Nov 2021 and Goods inflation was flat at +1.5% YoY…

Source: Bloomberg

There’s certainly nothing here to stop The Fed cutting rates again next week.

But we do note that given the surge in money supply, once could argue, re-inflation is coming…

By which time Trump will have a new Fed head to bully.

US equity futures are higher ahead of a Trump-blessed CPI print that is broadly expected to print in line or lower than expected, with optimism growing the meeting planned for next week between Trump and Xi will succeed in reducing trade tensions. With the wait nearly over for inflation data that’s will be key for the Fed’s to justify a rate cut next week, as of 8:00am S&P futures are 0.3% higher and Nasdaq futures gain 0.4%. Pre-market, Intel soared 8% after an upbeat revenue forecast. Ford gained 3% after signaling it will largely bounce back next year from a devastating fire that hobbled a key supplier. Newmont slumped after the precious-metals miner’s guidance disappointed investors.Mag 7 names are mostly higher led by GOOGL and NVDA. 10Y bond yields are fractionally higher, just above 4.0% as the USD trades near session highs. Commodities are mixed: base metals are outperforming, while precious metals are lagging and gold slides by about $100 to $4,050. Incremental macro news since Thursday’s close were mostly muted, but earnings announcements were mostly positive. Trump announced that all trade talks with Canada are finished over what he called a deceptive video ad featuring Ronald Reagan disapproving of tariffs. Today, the key focus will be CPI release at 8:30am ET and PMIs at 9:45am ET.

In premarket trading, Mag7 stocks are mostly higher (Alphabet +1.2%, Nvidia +0.6%, Microsoft +0.1%, Meta Platforms +0.4%, Apple +0.3%, Amazon -0.1%, Tesla -0.5%)

• Booz Allen (BAH) falls 8% after the defense contractor cut its adjusted earnings per share guidance for the full year.
• Deckers Outdoor (DECK) falls 12% after the owner of the Ugg and Hoka brands forecast 2026 net sales below the average analyst estimate. Analysts note the management annual outlook might be conservative.
• Ford Motor Co. (F) climbs 4% after the company reported third-quarter results that included a beat on profit and as traders weigh a 50,000 unit boost to pickup truck production against a $1.5 billion-$2 billion hit to Ebit from the Novelis aluminum plant fire.
• HCA Healthcare (HCA) rises 2% after boosting its revenue forecast for the full year
• Intel (INTC) gains 7% after the chipmaker returned to profitability and gave an strong revenue forecast, indicating signs of a comeback gaining traction.
• Mohawk Industries (MHK) falls 4% after the flooring manufacturer provided a disappointing fourth quarter earnings outlook.
• Newmont (NEM) is down 7% after the precious metals miner guided attributable gold production for 2026 that’s expected to be within the same guidance range provided for 2025.
• NEXTracker (NXT) is up 13% after the renewable energy equipment company reported adjusted earnings per share for the second quarter that beat the average analyst estimate.
• Procter & Gamble (PG) climbs 2% after reporting better-than-expected sales for its latest quarter as consumers snapped up the company’s Gillette razors and Secret deodorant.

Overnight, Trump said he is halting all trade talks with Canada for its “egregious behavior” over an ad comprising clips from a 1987 address by former President Ronald Reagan in which he defended free trade and slammed tariffs as an outmoded idea. At the same time, Trump has already been talking up the prospects for a trade deal with China, dangling an extension to the pause on higher tariffs on Chinese imports in exchange for a resumption of China’s purchases of American soybean, a crackdown on fentanyl and Beijing backing off restrictions on rare-earth exports. China’s Commerce Minister sounds optimistic, too. 

Turning back to markets, Wall Street rediscovered an appetite for growth and momentum stocks, pushing indexes steadily higher during the back half of Thursday’s session. Confirmation came of a Trump-Xi sit-down next week, the first face-to-face meeting between the leaders of the world’s two biggest economies since Trump took back the keys to the White House in January. 

At 8:30 a.m. markets deprived of economic data by the US govt shutdown now in its 24th day (yet with everything still working just fine) will finally get a look into the trajectory of consumer prices, which the median estimate sees rising 3.1% for both headline and core. September’s CPI report should give the Fed a green light to cut interest rates next week (see our CPI preview). Into the CPI data, Fed-dated OIS, steady over recent weeks, almost fully price in 25bp rate cuts at the October and December policy meetings

“Whatever the print looks like, it won’t deter the FOMC from delivering a 25 basis-point cut next week, or at the December meeting, even if there will probably be some knee jerk volatility as the data crosses,” said Michael Brown, a senior research strategist at Pepperstone Group Ltd.

“The risk sits firmly with a topside surprise,” said Nick Twidale, chief market analyst at AT Global Markets. A soft print is unlikely to impact Fed rate cut expectations at next week’s meeting or into 2026, he said

Next week is shaping up to be the busiest of this earnings season, with companies speaking for nearly 44% of the S&P 500’s market value slated to report. With earnings season approaching its apex, just 5% of companies in the S&P 500 Index that have released earnings this season so far have cut their forward guidance, a mere fraction of the 14% that did so by this stage of the reporting cycle in the past two quarters, according to data compiled by Citigroup.

The strong earnings season so far has helped markets to ride out geopolitical and trade tensions. With nearly quarter of the reporting done, year-on-year growth in earnings-per-share has been 4% in Europe and 14% in the US, better than expected, according to Barclays Plc strategists. The real test will come with big-tech results starting next week, they said. Alphabet Inc. and Meta Platforms Inc. are slated to report on Oct. 29 and Apple Inc. the day after.

“We do not think that we are out of the volatility period and market sentiment still feels fragile,” said Mohit Kumar, chief economist and strategist at Jefferies International Ltd. “Investor positioning has shown some signs of cleanup, but overall positioning still remains on the long side. Thus, we are keeping our low-risk mode for now, while maintaining our medium term bullish view.”

Europe’s Stoxx 600 reversed an opening gain, now down by 0.1%, with real estate and utilities shares leading declines, while technology and financial services stocks outperformered. Among companies reporting earnings in Europe, French drugmaker Sanofi SA, UK lender NatWest Group Plc, Swiss cement producer Holcim AG and Swedish defense firm Saab AB gained after beats, as did automobile component maker Valeo. Aluminum supplier Norsk Hydro ASA, Dutch lights manufacturer Signify NV and elevator specialist Schindler Holding AG dropped after missing analysts’ estimates. Here are the biggest movers Friday:

• Valeo shares rise as much as 8.5% to their highest intraday since May 2024 after the French firm posted revenue for the third quarter that beat estimates
• Lifco gains as much as 11% after the Swedish industrial conglomerate reported better-than-expected third-quarter earnings, with organic revenue growth of 4.9% coming in well ahead of consensus estimates of 0.2%
• Saab gains as much as 7.8%, the most since July, after the Swedish defense firm boosted its full-year sales guidance as well as posted a sales and Ebit beat in the third quarter
• Safran shares fall as much as 2.1% as the engine manufacturer’s third guidance increase this year is already largely reflected in estimates, according to analysts. The stock remains close to all-time highs
• Sanofi shares rise as much as 5.2% to the highest since May 29 after the French drugmaker reported sales and profit for the third quarter that beat market expectations
• GSK shares drop as much as 3.3% in London. FDA approval of the British pharma company’s blood cancer drug for a later-than-expected treatment line raised concerns about the medicine’s sales potential
• Kering shares drop as much as 3.6%, pulling back from the highest since April 2024 as HSBC downgrades the luxury-goods company following a strong rally in the share price
• Sika shares fall as much as 2.8% after the specialty chemicals company reported results that were “worse than feared,” with sales declining 1.2% compared to last year — the first quarterly organic decline since 2020
• Schindler shares drop as much as 2.6%, after the elevator and escalator specialist posted a drop in order intake during the third quarter, which analysts at Bloomberg Intelligence said could drag on its recovery
• Bravida falls as much as 11%, the most since May, after the Swedish building installations group reported its latest earnings. DNB Carnegie says poor margins in its core Swedish market disappointed

Earlier in the session, Asian stocks advanced, as confirmation of a meeting next week between US President Donald Trump and his Chinese counterpart Xi Jinping bolstered investor mood. The MSCI Asia Pacific Index rose as much as 0.6%, on course to end a three-day losing streak. SK Hynix, Samsung Electronics and Alibaba were among the top contributors to the advance. Most markets were in the green, with notable gains in South Korea, Japan and China. Taiwan’s market was closed for a holiday. Hopes for a thaw in trade tensions are rising ahead of a planned meeting between Trump and Xi next Thursday on the sidelines of the Asia-Pacific Economic Cooperation summit. Chinese stocks got an extra lift from the nation’s renewed emphasis on technological self-reliance at a key political gathering this week. “The plenum confirms the market expectations of the next five years, and the recent signs of deescalation from both sides is supporting risk sentiment,” said Hao Hong, chief investment officer at Lotus Asset Management in Hong Kong. Elsewhere, South Korea’s Kospi rose 2.5% to touch a fresh high on gains in its big chipmakers. Japanese stocks also rose as Intel’s bullish sales outlook lifted semiconductor-related shares, including Advantest, and optimism increased over corporate earnings. 

In FX, the Bloomberg Dollar Spot Index rose 0.1%, on track for a 0.5% gain this week.  Overall, the dollar was bolstered as USD/JPY rose 0.3% to 153.06, after Japan’s finance minister signaled that it may be necessary to issue additional debt to fund Prime Minister Sanae Takaichi’s upcoming economic package. USD/CAD rose 0.3%, as the Canadian dollar took a hit after President Donald Trump said he would stop trade negotiations with Canada, citing a Canadian advertisement against US tariffs. 

In rates, treasuries hold small losses following Thursday’s sharp selloff triggered by jump in oil prices. US yields remain within 1bp of Thursday’s closing levels, the 10-year just over 4%, with Germany’s lagging by almost 3bp and UK counterpart outperforming slightly. European bonds are falling after resilient euro-zone PMI readings, bolstered by German private sector activity at the strongest since 2023. That overshadowed a miss for French PMIs, hit by the recent political turmoil. German 10-year yields are up by three basis points, French yields by four basis points. UK retail sales also beat estimates. Focal point of US session is the delayed September CPI release at 8:30am New York time. Next week’s Treasury auctions are on an accelerated and compressed schedule before the Oct. 29 FOMC decision, beginning Monday with 2- and 5-year notes sales and concluding with 7-year notes Tuesday

In commodities, gold prices down by $56 to $4,070/oz. Oil prices stable following the surge in the previous session, with Brent holding around $66/barrel.

US economic calendar calendar includes September CPI (8:30am), October S&P Global US PMIs (9:45am), September new home sales and October final University of Michigan sentiment (10am) and October Kansas City Fed services activity (11am).

Market Snapshot

• S&P 500 mini +0.3%
• Nasdaq 100 mini +0.5%
• Russell 2000 mini +0.4%
• Stoxx Europe 600 -0.1%
• DAX little changed, CAC 40 -0.4%
• 10-year Treasury yield +1 basis point at 4.01%
• VIX -0.2 points at 17.12
• Bloomberg Dollar Index +0.1% at 1214
• euro little changed at $1.161
• WTI crude little changed at $61.8/barrel

Top Overnight News

• Trump says talks with Canada off after ad invokes Reagan as free-trader: RTRS
• Former Bundesbank chief Axel Weber has warned the coming disruption from artificial intelligence could usher in the rise of a new global elite that profits disproportionately from the adoption of the cutting-edge technology while leaving the rest worse off” BBG
• Hobbled by US tariffs, carpet weavers in India’s Kashmir struggle to stay afloat: RTRS
• After soaring as a global safe haven bet, the Swiss franc is wrapping up a volatile week against the euro with speculation the Swiss National Bank has intervened to curb the currency’s strength: BBG
• China’s New Strategy for Trump: Punch Hard, Concede Little: WSJ
• Investors Love Intel Again. That Still Doesn’t Solve Its Problems: WSJ
• Data-starved bond traders risk seeing the October rally in Treasuries spoiled by the key inflation figures they’ve been waiting for: BBG
• Strong Earnings Reassure Jittery, Data-Deprived Investors: WSJ
• White House Deputy Chief of Staff Blair made the case that, regarding the shutdown, US President Trump wants to spend time and political capital putting together a broader overhaul of healthcare. Blair says there will be a “number” of publicly traded pharmaceutical companies who’ll be “coming to the table” to “get the cost of prescription drugs down in the United States.”: Politico.
• A Turkish court dismissed a case that could topple the leader of the country’s main opposition party, offering relief to investors concerned about renewed political instability: BBG
• US states warn food aid benefits will halt if federal shutdown drags on: RTRS
• Fed has reportedly requested a formal consultation into a banking ruling around the treatment of cross-border loans for EZ banks: BBG
• JPMorgan to Allow Bitcoin, Ether as Collateral in Crypto Push: BBG
• Target to Eliminate 1,800 Roles, 8% of Headquarters Team: BBG
• Applied Materials to Cut 4% of Global Staff After Sales Slow: BBG
• Rivian Cuts About 600 Jobs in Latest Setback for EV Maker: BBG
• ConocoPhillips to Lay Off Canada Employees in November: Reuters
• Will India and China Be Able to Resist U.S. Sanctions on Russian Oil: WSJ

Trade/Tariffs

• US Trade Representative Greer is to travel to Malaysia, Japan and South Korea.
• South Korea’s Industry Minister said South Korea wants the US investment package to be smaller than USD 350bln as part of the tariff deal, while it was separately reported that South Korea and the US remain far apart on key sticking points in trade negotiations, although some progress has been made, according to a senior presidential aide.
• China’s Commerce Minister said regarding ties with the US, that dialogue and cooperation is the only right choice and can find a solution and correct way of coexistence. The minister also noted regarding FDI that they will not will not engage in zero-sum games in opening up and attracting investment, while they will further lower market access barriers to foreign investors.
• US President Trump posted “Canada has fraudulently used an advertisement, which is FAKE, featuring Ronald Reagan speaking negatively about Tariffs…They only did this to interfere with the decision of the U.S. Supreme Court, and other courts. TARIFFS ARE VERY IMPORTANT TO THE NATIONAL SECURITY, AND ECONOMY, OF THE U.S.A. Based on their egregious behaviour, ALL TRADE NEGOTIATIONS WITH CANADA ARE HEREBY TERMINATED.”
• Canada reportedly limits how many American vehicles Stellantis (STLAM IM) and GM (GM) can import tariff-free, while the move comes after companies dropped some Canadian production, according to CBC. Canada’s government later confirmed significant reductions to import quotas of General Motors (GM) and Stellantis (STLA IM), reducing the annual remissions quotas for General Motors by 24.2% and for Stellantis by 50%.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly higher as the region took impetus from the rebound on Wall St, where energy names were underpinned amid surging oil prices and with the improved risk sentiment also facilitated by confirmation of a Trump-Xi meeting for next Thursday. ASX 200 lagged as gains in tech were offset by weakness in defensives and the top-weighted financials sector. Nikkei 225 rallied at the open and reclaimed the 49,000 status alongside a weaker currency, while the latest CPI data from Japan printed mostly in line with forecasts but showed an acceleration in the headline and core figures. Hang Seng and Shanghai Comp conformed to the upbeat mood following confirmation of a Trump-Xi meeting next week, although gains were capped as it was also reported that the US is to probe China’s 2020 trade deal compliance, while an investigation could be announced on Friday.

Top Asian News

• Chinese President Xi said China’s development is facing both strategic opportunities and challenges, while he added that China should comprehensively promote the integrated development of education, science, and technology talent, as well as strive to break through key core technologies, according to Xinhua.
• China’s NDRC head said the economy relies on the real economy to move towards the future, and noted that strong domestic demand is strategic underpinning for China’s modernisation. NDRC head also stated that there is room and potential for China to expand domestic demand and they will implement some major investment projects, improve the structure of government investment and increase the proportion sent to people’s livelihoods. Furthermore, they will expand economic policy space during the next five years, will prevent improper government intervention in the economy and will increase coordination of macroeconomic policies.
• China’s Deputy Head of Office of Financial and Economic Affairs Commission said the external environment is uncertain and unstable, but noted the economy is on a solid foundation and fundamentals supporting long-term growth remain unchanged, while it was stated that they must move faster to implement a new development paradigm.
• China’s Science and Technology Minister said regarding AI, that they will accelerate development and seek breakthroughs, as well as step up efforts on the top-level design of artificial intelligence. China will also develop chips with high-level resources and will strengthen artificial intelligence governance, while it will step up efforts in quantum technology and biotechnology.
• Japan’s Finance Minister Katayama said they need to take into account various factors when asked regarding the possibility of raising financial income tax, while she added that monetary policy measures should be up to the BoJ and hopes the BoJ continues appropriate dialogue with markets. Furthermore, Katayama said she spoke with US Treasury Secretary Bessent for about 15 minutes via phone, while she told Bessent she wants to tackle various issues and will meet with Bessent next week.
• Japan’s Prime Minister Takaichi says ‘Economy first then fiscal policy’ will be the foundation of the government’s approach. Will not implement cash handout which was pledged during the upper House election due to lack of public understanding. Aims to pass legislation in the current diet session to abolish provisional gasoline tax rate. To provide assistance for electricity, gas bills during winter. Launching a Japanese growth strategy council to expand the economy.

European equities (STOXX 600 -0.2%) are softer after initially opening with upside. European market sentiment has failed to follow APAC and Wall Street where the tone was supported after confirmation of next weeks Xi and Trump meeting. There’s been no clear macro driver for the recent losses. European sectors have opened slightly negative this morning. Technology (+0.9%) takes the top spot, with sentiment boosted by post-earning strength in Intel (+8.3%). Financial Services is in second place driven by gains in LSEG (+4.3%) after a broker upgrade from JP Morgan. Real Estate is found at the bottom of the pack.

Top European news

• Turkish court ruling permits the opposition leader to stay.

FX

• USD is marginally firmer today, as traders digest a slew of trade-related updates and ahead of the much-awaited delayed US CPI report for September. DXY is currently in a 98.89-99.10 range. In brief, consensus looks for headline CPI to rise +0.4% M/M (prev. 0.4%), with the annual rate seen rising to 3.1% Y/Y (prev. 2.9%). On the trade front, the White House confirmed that the POTUS will meet a number of Asian leaders next week, namely Chinese President Xi on Thursday. It was also reported that Trump said he thinks he will come out well from the meeting with Xi.
• Up the northern border, Trump cancelled all trade negotiations with Canada, due to anti-tariff ads. In an immediate reaction, USD/CAD moved higher by 25 pips to 1.4030 from 1.4005 over two minutes; currently trading around 1.4028. ING suggests that the BoC would be more likely to deliver a 25bps cut at next week’s meeting, given how much trade uncertainty/existing tariffs are weighing on Canadian businesses.
• EUR is essentially flat/modestly lower vs the Dollar. Focus today has been on a slew of PMIs. Starting by way of release order; France was subdued, Germany upbeat and EZ-wide metrics also resilient. Delving into price action in detail, a slight tick lower in the Single-Currency on the downbeat French metrics, but then jumped higher and made fresh highs on the German figures, rising from 1.1607 to 1.1628. The pair has gradually cooled from those highs since.
• JPY is the marginal G10 underperformer today, continuing the pressure seen in the APAC session. USD/JPY is currently trading at the upper end of a 152.47-153.06 range; peak marks a fresh WTD high and now approaching last week’s best at 153.27. Focus for the region has been on inflation, whereby Japan’s National CPI Y/Y rose from the prior (in-line with expectations); the core figure also rose (as expected), whilst the super-core metric fell more-than-expected. From a policy perspective, the elevated inflation figures play in favour of a hike for the BoJ; ING opines that the ongoing US-China trade spat will keep the BoJ wary of hiking rates in October, and instead favour December.
• GBP is modestly lower vs the Dollar. Focus for the UK today was on Retail Sales, which topped analyst expectations; headline M/M +0.5% (exp. -0.2%), the Ex-Fuel figure cooled from the prior but not as much as expected. Thereafter, Cable slipped from those levels heading into the PMI metrics, which were overall resilient; Services ticked a little higher, whilst Manufacturing topped the most optimistic of analyst expectations. The accompanying report suggested that “Companies are clearly treading cautiously in terms of spending, investment and hiring ahead of the upcoming Budget”. Overall, Cable lifted from 1.3302 to 1.3321; the midpoint of the day’s range. On the Budget, it was reported that Chancellor Reeves is mulling raising income tax at next month’s budget, according to The Guardian.
• Antipodeans are modestly lower vs USD, after trading with modest gains overnight, which was facilitated by the generally positive risk tone. However, this has subsided a touch in recent trade. AUD/USD trades in a 0.6641-0.6707 range, and within the confines of this week’s range; NZD/USD trades in a 0.5743-0.5759 range, the high for the day just shy of the WTD best at 0.5761 and then the 21 DMA at 0.5763 thereafter.

Fixed Income

• USTs are contained overnight despite a handful of trade updates, with USTs very much waiting for the upcoming US September CPI report. A series that is being released, despite the shutdown, to facilitate social security adjustments. Consensus looks for headline CPI to rise +0.4% M/M (prev. 0.4%), with the annual rate seen rising to 3.1% Y/Y (prev. 2.9%). The core rate is expected to rise by +0.3% M/M (prev. 0.3%), with the annual rate of core inflation seen unchanged at 3.1%. Elsewhere, we await updates on the trade front. Firstly, a potential investigation into China’s adherence with Section 301 terms from Trump’s first term. Secondly, further details on Thursday’s upcoming Trump-Xi meeting. Finally, relations between the US and Canada have deteriorated significantly with Trump stopping discussions following the release of a Canadian tariff video.
• Bunds were contained early doors, holding just under the 130.00 mark. Thereafter, the softer-than-expected French PMIs pushed the benchmark to a 130.07 peak and also lifted OATs to a 123.06 high. However, this peak proved short-lived as the subsequent German measures came in firmer than expected across the board and eclipsed the forecast range. The German metrics sent Bunds down by c. 30 ticks at the time, a move that has since extended to a 129.50 base following the EZ figure.
• OATs underperforming vs peers. After-hours Moody’s will be reviewing France. Currently, Moody’s has France at Aa3 and is the last of the big-three to have a double-A rating on France; after S&P cut in an unscheduled move last Friday and Fitch earlier on. In politics, PS leader Faure spoke to BFM this morning and outlined that they are yet to see any signs of compromise from the government over an ultra-rich tax measure, and if there is no change by Monday then “it’s all over”; implying that they would submit a no-confidence motion, unless progress is made on taxing the wealthiest in society.
• A firmer start to the day for Gilts, but only by a few ticks. Thereafter, Gilts followed EGBs lower following the German and EZ figures before coming under more pressure and slipping to a 93.41 low in the wake of better-than-expected Flash UK PMIs. A series that confirms the relatively ok performance of the economy and corroborates the recent cooler-than-expected CPI report; furthermore, it chimes with the view of uncertainty ahead of the November Budget. On the point of data, this morning’s surprisingly strong retail sales figures spurred a slight hawkish reaction in November pricing, trimming the odds of a cut to c. 21% (pre-release c. 35%) but had no impact on December pricing; in sum, chiming with the above view on the BoE’s near-term trajectory. Elsewhere, we remain attentive to reports in UK press that Chancellor Reeves is said to be considering breaching a manifesto pledge and raising income taxes. However, a UK minister has since pushed back on this.
• China to issue up to USD 3bln of USD-denominated sovereign bonds in Hong Kong, during the first week of November.

Commodities

• Crude benchmarks are taking a pause following Thursday’s drive higher as the US placed sanctions on Russian oil companies. APAC trade was muted, with WTI and Brent trading in a tight USD 0.60/bbl range before slightly extending to a peak of USD 62.13/bbl and USD 66.30/bbl respectively as German and UK PMIs came in better-than-expected, but then pulling back modestly. Currently, benchmarks are off best and somewhat rangebound. Late in Thursday’s session, a White House official said a Trump-Putin meeting is not completely off the table and states that the US President has not seen enough action from Russia towards peace.
• Spot XAU is currently being weighed on as bond yields rise globally, reversing Thursday’s gains. XAU rose to USD 4144/oz early in the APAC session before gradually falling to a low of USD 4047/oz as the European session got underway.
• Base metals followed on Thursday’s rally as copper supply concerns come at a time of broad optimism over demand and a Trump-Xi meeting on the horizon. 3M LME Copper oscillated in a tight c. USD 65/t range during the APAC session, forming a low at USD 10.8k/t, before extending the prior week’s high and peaking at USD 10.97k/t as the red metal nears key USD 11k/t price point. Prices are currently off best levels, with 3M LME Copper pulling back to USD 10.89k/t.

Geopolitics: Middle East

• US President Trump said regarding Israel, that it will not be doing anything with the West Bank.

Geopolitics: Ukraine

• EU leaders failed to back a EUR 140bn loan to Kyiv using frozen Russian state assets following opposition from Belgium, according to FT.
• EU’s Costa said discussions at the EU summit showed a reparation loan for Ukraine is feasible, while he added that discussions with the ECB and Eurogroup presidents showed the reparation loan proposal is in line with European and international law. It was also reported that Belgium’s Prime Minister said Belgium does not want one euro of money returned to Russia, and on the legality of the reparation loan idea, it is not clear and it is a matter that needs to be solved. Furthermore, German Chancellor Merz said regarding Russian frozen assets that he assumes all EU countries will take part and it is complicated because there is no blueprint for such a step, as well as stated regarding Russian jets violating Lithuania’s airspace, that it is a further provocation and they will react with a sense of proportion.

Geopolitics: Other

• US President Trump said reports that B-1 bombers flew near Venezuela are not accurate, while he added that China is using Venezuela for Fentanyl smuggling. Furthermore, he said they will be seeing land action in Venezuela soon and may go to Congress about targeting land drugs.

US Event Calendar

• 8:30 am: Sep CPI MoM, est. 0.4%, prior 0.4%
• 8:30 am: Sep Core CPI MoM, est. 0.3%, prior 0.3%
• 8:30 am: Sep CPI YoY, est. 3.1%, prior 2.9%
• 8:30 am: Sep Core CPI YoY, est. 3.1%, prior 3.1%
• 9:45 am: Oct P S&P Global U.S. Manufacturing PMI, est. 52, prior 52
• 9:45 am: Oct P S&P Global U.S. Services PMI, est. 53.5, prior 54.2
• 9:45 am: Oct P S&P Global U.S. Composite PMI, est. 53.45, prior 53.9
• 10:00 am: Sep New Home Sales, est. 708k, prior 800k
• 10:00 am: Sep New Home Sales MoM, est. -11.5%, prior 20.5%
• 10:00 am: Oct F U. of Mich. Sentiment, est. 54.5, prior 55

DB’s Jim Reid concludes the overnight wrap

Geopolitical news dominated markets over the past 24 hours. Concerns over the impact of new US sanctions on Russia oil saw Brent crude post its largest two-day jump since 2022, which drove a sell-off in government bonds with 10yr Treasury yields posting their biggest rise in over a month (+5.1bps) ahead of today’s delayed September CPI print. More positively, White House confirmation of a meeting between Trump and Xi next week helped ease recent trade fears. Combined with improved tech optimism, this boosted risk assets, as the S&P 500 rose +0.58% while in Europe the STOXX 600 (+0.37%) reached a new all-time high.

Starting with oil, markets wrestled with the impact of sanctions announced by the US against Russia’s two largest oil companies the previous evening, in particular how these will impact oil flows to China and India, which have been the main buyers of Russia’s crude exports. Reports yesterday pointed to initial disruption, with Bloomberg reporting that Chinese state oil majors have suspended seaborne Russian oil purchases due to concerns about Western sanctions, while Reuters reported that Indian refiners are poised to sharply cut imports of Russian oil. Also the EU yesterday approved its new Russia sanctions package, which targets some Chinese entities for buying Russian oil and tightens restrictions on transactions with Russia’s largest state-owned oil producers. Our view is that while the new US sanctions are likely to disrupt Russia’s oil exports in the near-term, especially to India, the medium-term impact will depend on ongoing enforcement and adaptation. Indeed, looking at previous restrictions on Russia’s oil exports, their impact typically faded after a few months. In response to the new US sanctions, Russia’s President Putin downplayed the impact on Russia’s economy and criticised the impact on global energy markets but suggested that his meeting with Trump was delayed rather than cancelled.

With all said and done, Brent crude prices spiked by +5.43% yesterday to $65.99/bbl. Following Wednesday’s +2.07% rise, this marks the largest two-day jump since April 2022, when oil markets were in turmoil following Russia’s February 2022 invasion of Ukraine. Meanwhile, the geopolitical noise helped gold prices find a firmer footing (+0.68%) after falling by nearly 6% over the previous two sessions.

The rise in oil prices led to a sizeable sell-off in government bonds. In the US, Treasury yields moved higher across the curve, with 10yr yields posting their largest rise in over a month (+5.1bps) back to 4.00%, while 2yr yields rose +4.6bps to 3.49%. That said, while breakevens rose, it was real yields that saw the larger increase, suggesting some broader correction of the recent Treasury rally ahead of today’s delayed CPI print. In Europe, 10yr bund (+2.0bps) and OAT (+2.7bps) yields saw a more moderate increase, while gilts (+0.6bps) outperformed.

The other major geopolitical news came with the White House saying that President Trump will meet with China’s President Xi next Thursday (October 30) on the sidelines of the APEC summit, which buoyed hopes of a détente between the world’s two largest economies. This would be the first in-person meeting between the two leaders since Trump returned to office in January and comes as the current 90-day US-China tariff truce is due to expire on November 10. Meanwhile, we’ve seen negative news on US-Canada trade overnight, with Trump posting that “ALL TRADE NEGOTIATIONS WITH CANADA ARE HEREBY TERMINATED”, in an apparent response to an advertisement against tariffs funded by the government of Ontario.

Easing US-China fears supported an overall risk-on mood, with the S&P 500 (+0.58%) yesterday closing less than a quarter of a percent from its all-time high. The NASDAQ (+0.89%) was helped by a rebound in chip stocks, as the Philadelphia Stock Exchange Semiconductor Index rose +2.54%. That advance was supported by a WSJ story Wednesday night that the Trump administration was considering taking equity stakes in domestic quantum-computing firms, with Rigetti Computing later saying that it is in ongoing talks with the US government on funding. Recovery for the Mag-7 (+0.88%) was led by Tesla (+2.28%), which saw a spectacular intra-day move after falling as much as -5.71% just after the open following its earnings release that we discussed yesterday. So a buy-the-dip mentality holding strong in the US. The positive mood also carried over to Europe, where the STOXX 600 (+0.37%) and the FTSE 100 (+0.67%) reached new record highs, while the DAX (+0.23%) and CAC (+0.23%) also advanced.

The positive equity market mood has continued in Asia this morning, with the Trump-Xi meeting announcement alleviating concerns on trade. The KOSPI (+2.22%) is leading the gains across the region, posting a new intraday record, while the Nikkei is also strongly higher (+1.50%). Amid Chinese equities, the Hang Seng (+0.59%), the CSI (+0.66%) and the Shanghai Composite (+0.42%) are all seeing decent gains as the CCP released more details on China’s new five-year economic plan focusing on advanced manufacturing, technological self-sufficiency, and enhanced domestic demand. US equity futures are also higher, with the NASDAQ 100 (+0.30%) futures outperforming the S&P 500 (+0.19%) following an upbeat revenue outlook from chipmaker Intel.

On the data front, in Japan core consumer prices rose by +2.9% year-on-year in September (vs +2.7% August), though the ‘core-core’ measure, which excludes both food and energy, was a touch below expectations at +3.0% (vs +3.1% expected; +3.3% in August). Meanwhile, the flash PMIs in Japan show manufacturing activity declining to its lowest level in 19 months in October (48.3 vs 48.5 previous). The services PMI also slowed, albeit to a still solid 52.4 (vs 53.3 previous). With this backdrop, 10yr JGB yields are -1.4bps lower this morning at 1.66%, while the Japanese yen (-0.21%) is extending its decline against the dollar to a sixth consecutive session. Elsewhere, the flash October PMIs in Australia show a decline in manufacturing activity for the first time in ten months (49.7 vs 51.4 previous) though the services PMI rose from 52.4 to 53.1.

Looking ahead to today, we will get the postponed US CPI release for September at 8.30am EST (13.30 LDN) ahead of next week’s FOMC meeting. Our US economists expect headline CPI to come in at +0.42% m/m, which would push up the year-on-year rate to +3.1%, and be the strongest monthly print since January. For core CPI, they project +0.32%, or +3.1% year-on-year. Within the data, they’re still looking for signs of tariff impacts in core goods, with a focus on categories like apparel and new vehicles that haven’t yet seen a meaningful pass-through. See their full preview here.

In terms of yesterday’s data releases, the shutdown-affected calendar saw US existing home sales post a slight uptick in September to their highest in 7 months (+1.5% m/m as expected). In Europe, France’s INSEE business confidence survey (97 vs 96 expected) and Euro area consumer confidence (-14.2 vs -15.0 expected) were both a touch stronger ahead of today’s flash PMI prints. So data also providing some support to the higher-rates higher-equities backdrop.

To the day ahead now, we’ll get data including the global October flash PMIs, US September CPI, final October University of Michigan survey, UK September retail sales and France October consumer confidence. Central bank speakers include ECB’s Nagel, Cipollone and Villeroy. Notable earnings include Procter & Gamble, Sanofi, NatWest and Porsche. We also have Moody’s review of France’s credit rating.