trap_zack

ICYMI O/N — THURSDAY 5 NOVEMBER 2026 MACRO: AI stocks saw selling pressure amid a continued rotation toward economically sensitive stocks.  South Korea’s Kospi closed down 5.28%, with selling sidecars/trading halts activated during the session, Nikkei -1.79%, TAIEX -3.2%. (BBG, WSJ, Yonhap) Hong Kong’s Hang Seng Tech Index climbed nearly 6%, while the Hang Seng gained as much as 4%, its biggest rise since April 2025. Alibaba and Tencent each rose more than 7% as investors rotated from hardware into cheaper Chinese internet platforms. Media also reported state-backed equity support (BBG, FT) Gold rose as much as 2.1% toward $4,146 as yields and the dollar fell. Silver traded around $53.11, up 1.7%, after gaining almost 5% Wednesday. (BBG) Democrats vowed to use their resounding midterm victory to rein in President Donald Trump, setting up two years of possible deadlock in Washington. (RTRS) Democrats will turn their new investigative powers on the Trump family's business deals as they make what they call corruption a central part of a 2028 campaign for the White House. (RTRS) The White House said attempts to impeach Trump or reverse his agenda over the next two years would fail. Its statement defended his record following the Republicans’ congressional defeat. (FT) After Democrats seized control of the US Congress, investors are focused on the risk of standoffs over the government's borrowing limit, with the potential for political brinkmanship to unsettle markets. (RTRS) Bernie Sanders renewed his call for a national AI data-centre moratorium, saying 43 of 44 communities had voted for local restrictions. (Sanders) Meta President Dina Powell McCormick said starting new US data-centre projects will become harder after the midterms, while expanding existing sites should be easier. Every hyperscaler is considering whether to build more capacity outside the US, she told WSJ Tech. (WSJ) One newly elected governor who campaigned against data centres has already asked Meta to meet after inauguration, saying they do not want to lose investment and jobs, Powell McCormick said. She did not identify the governor. (WSJ) OpenAI’s senior leaders discussed whether election results require a reset of next year’s data-centre-capacity expectations, a person familiar told WSJ. (WSJ) The oil industry is preparing for a possible Democratic push for a windfall tax, with incoming House Natural Resources chair Jared Huffman saying he will prioritize it. The White House called speculation about Trump supporting such a deal baseless; no agreement has been announced. (BBG) Wall Street banks were bracing for heightened scrutiny after Democrats took control of the US Congress, with executives and analysts predicting lawmakers would investigate cost-of-living issues and summon bank chiefs to testify. (RTRS) JPMorgan’s trading team remains tactically bullish on US equities, favoring a technology/cyclicals barbell weighted toward cyclicals. It sees October’s hedge-fund deleveraging as creating room for a rebound; Citadel Securities’ Scott Rubner also expects positioning to support a year-end rally. (BBG) Aptus Capital’s John Luke Tyner thinks September’s 25bp Fed hike could prove the cycle’s last if lower energy prices and slower AI spending ease inflation pressure. He expects gridlock to weaken growth and leave room for yields to fall further. (WSJ) Ed Yardeni said 10-year Treasuries look attractive around 5%, arguing productivity should bring inflation down over time. He sees the yield trading in a 4%–5% range and longer-term inflation around 2%–2.5%. (BBG) Pentagon CTO Emil Michael said the government’s Super Intelligence Task Force will publish the laws and regulations applying to US AI labs “in the next week or two.” He gave no further detail on the framework at WSJ Tech. (Reuters) China is six months to a year behind the US in AI development, according to Pentagon technology chief Emil Michael. He cited US advantages in data centres and advanced semiconductors. (WSJ) California’s proposed one-off 5% billionaires’ wealth tax remained on course for defeat, with more than 55% voting against in returns counted through Wednesday evening. AP had not called the result, and mail ballots could narrow the margin. (FT) Security workers at Los Angeles and Long Beach ports extended their contract-negotiation deadline to midnight Friday, employers said. A strike could affect terminals handling more than half the ports’ combined cargo, with other dockworkers expected to honor picket lines. (BBG) Japan’s 10-year government bond auction Thursday saw slightly weaker demand than the 12-month average, reflecting softer investor appetite after a recent decline in yields. (BBG) BoJ policymakers saw the need to keep raising interest rates with some signalling the chance of faster-paced increases, minutes of their September meeting showed, bolstering the case for another hike as soon as December. (RTRS) Japan's service sector expanded modestly in October as activity and new orders both rose slightly faster, a business survey showed on Thursday. (RTRS) Chinese refiners have sold only around 500,000 metric tons of diesel for loading in November so far, according to traders and Reuters calculations based on trade data, after a surge in exports since July sent domestic stockpiles to multi-year lows. (RTRS) China is considering dollar and offshore-yuan sovereign bond sales as early as this month, according to Bloomberg sources. The finance ministry is working with banks, but timing and other details remain under discussion. (BBG) Chinese Vice Premier Ding Xuexiang said export restrictions on high-tech products are preventing China from importing more. Speaking at Shanghai’s import expo, he defended Beijing’s trade practices and called for greater technology cooperation. (BBG) South Korea’s central bank is preparing a large-scale acquisition of US Treasuries to fortify its foreign exchange reserves, offering Washington a financial lifeline while securing vital geopolitical and trade leverage ahead of potential shifts in US policy. (KED) South Korea’s current-account surplus jumped to a record in September, fueled by booming semiconductor exports as global investment in artificial intelligence continues to stoke demand for the country’s technology products. (BBG) All 15 senior economists surveyed by Bloomberg expect the RBA to move to the sidelines after this week’s increase to 4.85%. Markets put the highest probability of another hike at 31% for February, while pricing a 76% chance of a cut by November 2027. (BBG) Some RBA board members criticized Andrew Hauser’s hawkish pre-meeting comments and felt public remarks by chief economist Sarah Hunter risked boxing them into a hike, the AFR reported. The RBA declined to comment. (BBG) RBA Deputy Governor Hauser said confidence in the bank’s ability to achieve its objectives over the near term has fallen materially. Overall institutional trust remains stable, but he warned that accumulated goodwill would not indefinitely protect it from poor economic outcomes. (BBG) Australia’s NSW data-centre inquiry found approvals inadequately assess cumulative power, water and infrastructure demands, but stopped short of recommending a moratorium. Committee members voted 6–1 to remove proposed state and national approval freezes. (Reuters) Australia’s trade surplus is on track to slump to its lowest level in a decade this year, as chips and servers needed for data centers add to a surge in imports from China while energy costs spiral higher. (BBG) The BoE is expected to raise Bank Rate 25bp to 4% at noon GMT, its first increase in more than three years. More than three-quarters of surveyed economists expect at least a 7–2 vote; markets price rates reaching 4.75% by next autumn. (BBG) UK inflation will peak at an average 4.4%, mostly in Q1 2027, according to the FT’s new survey of 12 economists—above the OBR’s 3.8% forecast. Five respondents expected a peak between 4.5% and 5%. (FT) The most commonly expected BoE rate peak among economists in the FT survey was 4.25%, implying two 25bp increases. Markets were pricing four quarter-point increases by the end of 2027. (FT) Britain's construction sector shrank last month at its fastest pace since June as housebuilding suffered its worst month of the year, a survey showed on Thursday. (RTRS) A new parliamentary report warns Britain remains “dangerously exposed” to China’s critical-minerals dominance. MPs called for a financing facility and an allied buyers’ club to help fund alternative mines, processing plants and recycling. (FT) UK junior-job vacancies have fallen by a quarter since January 2025, while entry-level postings mentioning AI have almost tripled, according to new Adzuna figures. Indeed found AI mentioned in one in six entry-level vacancies across highly exposed occupations, twice the year-earlier share. (BBG) ECB's Schnabel said rising public debt and the rapid expansion of non-bank finance could curb the European Central Bank's ability to set the appropriate monetary policy. (RTRS) Airlines across Europe received a series of bomb threats on Thursday morning for the second time this week, forcing many to make unplanned or escorted landings, although none of the threats immediately proved to be genuine. (RTRS) France’s National Assembly rejected the revenue section of the 2027 budget by 458 votes to zero, with two abstentions. The rejection sends the government’s original text to the Senate, with debate scheduled from November 20. (AFP via TV5Monde) France faces nationwide strikes and demonstrations as budget negotiations remain deadlocked. SNCF expects rail disruption, dockworkers have called a strike, and authorities closed at least 25 Paris metro stations. (BBG) France’s long-dated bond sales could test the tightening in long-end OAT spreads, Commerzbank said ahead of Thursday’s supply. Spain also has nominal and inflation-linked auctions, while Italy is conducting a buyback. (WSJ) France’s SME minister Serge Papin urged the EU to follow France’s approach to taxing ultrafast fashion, in an FT interview. This is a call for wider European action; France’s own levy was introduced in September. (FT) German factory orders partially rebounded, a sign of resilience in Europe’s biggest economy against a volatile global backdrop. (BBG) The German Chamber of Commerce and Industry on Thursday raised its 2026 growth outlook for Europe's largest economy to 1% from 0.3% but said debt-financed public spending was largely driving the expansion. (RTRS) Spain proposed a 5.3% minimum-wage increase for 2027, affecting approximately 2.5m workers. The proposal would set annual pay at €18,004, or €1,286 across 14 payments, and still requires cabinet approval. (BBG) Norway's central bank kept its policy interest rate on hold at 4.50% on Thursday, as unanimously predicted by economists in a Reuters poll, and reiterated that it may still tighten policy to contain inflation. (RTRS) Sweden’s core inflation rate unexpectedly slowed to its weakest pace in six months, denting arguments for further interest-rate hikes in the short term while most analysts saw the price development as largely temporary. (BBG) Brazil unanimously held the Selic rate at 13.75%, interrupting five consecutive cuts; 26 of 31 economists expected a hold. The central bank raised its 2027 inflation forecast to 4.7% from 3.9% and highlighted weaker activity alongside deteriorating inflation expectations. (BBG) India will soon require state utilities to add energy storage capacity, a move aimed at helping the country save surplus clean power for use during evening peak demand as it rapidly expands clean energy generation. (RTRS) Malaysia held its policy rate at 2.75%, as expected by 17 of 23 economists; six anticipated a hike. Bank Negara warned that commodity prices, geopolitics and weather would put upward pressure on inflation in 2027 and said it would remain vigilant. (BBG) Indonesia’s economy unexpectedly accelerated in the third quarter as government stimulus helped household consumption and investment withstand challenging global conditions. (BBG) Philippine inflation accelerated to the fastest pace in almost four years in October as the prolonged Middle East conflict drove up energy costs, raising the odds of another large interest rate increase by the central bank. (BBG) South Africa revised its debt/GDP peak to 74.6% from 78.4% after GDP rebasing showed a larger economy. Treasury stressed this was a mechanical change: its revenue, spending and debt amounts have not changed. (BBG) Heavy Australian rainfall is degrading wheat quality and delaying harvesting, Bendigo Bank said, threatening high-protein supplies despite a crop of at least 30m tonnes. Feed-wheat volumes are increasing in Queensland and New South Wales at the expense of higher grades. (BBG) Thai 5% broken white rice reached $499/tonne on Wednesday, its highest since December 2024, as El Niño pressured Asian production. Philippine rice prices rose 21% YoY in October, according to Thursday’s inflation release. (BBG) IRAN: The US military is finishing preparations for a possible return to major combat operations against Iran and sending more assets to the region, American officials told Axios. Trump has made no final decision. (Axios) Trump officials are split between fresh Iran strikes followed by a peace push during the lame duck and cutting losses by winding down operations, people familiar told WSJ. (WSJ) The White House decided before the election to keep ongoing limited strikes on Iran quiet after senior officials warned that publicising them would hurt Republicans in vulnerable states, according to the WSJ. (WSJ) Hegseth has repeatedly advocated continuing the Iran war inside Trump’s cabinet, often against Vance and Rubio’s push for talks, people familiar with the discussions told the WSJ. (WSJ) Thomas Massie plans to trigger a Hegseth impeachment vote when Congress returns next week, CNN reported, with multiple Republican sources expecting passage. Massie subsequently said he would not reintroduce the articles if Hegseth resigns. (CNN, Massie) Some of Hegseth’s upcoming travel was put on hold, NBC reported as Trump discussed possible replacements with allies. Sources cited either potential renewed Iran operations or post-election politics without establishing which caused the travel change. (NBC) The Pentagon said Hegseth is “100% committed” to serving through Trump’s term and would fight investigations and impeachment efforts. (Fox News, CNN) Republican lawmakers and allies are increasingly blaming Hegseth for the Iran war, accusing him of pressing for it without an exit strategy, CNN reported Wednesday evening. (CNN) Axios reported that Vance has privately accused Netanyahu of being “wrong on everything” regarding Iran while urging Trump to reach a deal. (Axios) Qatari mediators are seeking US and Iranian backing for a draft agreement to avert renewed fighting and potentially restart direct talks in the coming days, regional sources told Axios. (Axios) Diplomats and Trump advisers fear Iranian gloating could trigger renewed strikes. (Axios) Russia agreed to supply Iran with 90 helicopter-mounted missile launchers, previously unreported production documents seen by the FT reveal. The order appears in a 2024–25 schedule; the documents do not establish whether delivery occurred. (FT) Senator Peter Welch told the FT that Democrats now share a consensus of opposition and distrust towards Netanyahu’s government. He said the incoming majority could push to end unrestricted aid to Israel; no new aid restriction has been enacted. (FT) Israel has ordered billions of dollars worth of American military hardware beyond what the U.S. has committed to paying for, illustrating how hard it would be to phase out Washington’s funding for the country. (WSJ) The Houthis demanded $51bn in compensation and Saudi recognition as Yemen’s rulers during negotiations to halt hostilities, people briefed told WSJ. Other amounts have subsequently been discussed; no settlement was reported. (WSJ) Saudi Arabia’s options for an offensive against the Houthis remain constrained: Pakistan has refused strikes inside Yemen, Turkey’s parliament has yet to approve their defence pact, and Egypt’s support is defensive only, WSJ reports. (WSJ) South Korea plans to extend its Cheonghae naval mission to waters south of Oman, adding a P-8A patrol aircraft, mine-clearing equipment and 75 personnel. The mission would remain non-combat, roughly 650km from Hormuz, and requires parliamentary approval. (Yonhap, BBG) GEOPOLITICAL: The US was unprepared for modern drone warfare and is racing to catch up, Pentagon technology chief Emil Michael told WSJ Tech. He said the US now has a stockpile of about 500,000 drones. (WSJ) North Korea said it tested a newly designed air-defence missile system, claiming improved materials, guidance and target-tracking performance. KCNA disclosed the details Thursday following Wednesday’s launches. (RTRS) EQUITIES: Qualcomm (-10%) tumbled in late trading after giving a lackluster profit forecast, a sign the largest maker of smartphone processors is still grappling with higher component prices. Said additional data centre unit upside is constrained by supply. (BBG, call excerpts) Arm’s (-4%) gave a revenue forecast for the current period that left investors underwhelmed, a sign the chip designer hasn’t yet met the lofty hopes for its push into the AI data center market. (BBG) Coherent (+2.6%) bear estimates for the quarter and also gave a Q2 forecast above estimates, whilst giving line of sight to sales growth topping 60% in fiscal 2027 and quarterly revenue of $4 billion in 2028. Disclosed another ~$20bn, five-year PhotonLink agreement with an unnamed major AI company, additional to its Nvidia agreement.  (Coherent) Applovin (+16%) shares are soaring after the mobile-app marketing company’s third-quarter results beat expectations and it gave an outlook that is above the analyst consensus estimate. (BBG) HubSpot (-9.5%) shares are down after the software company’s outlook added to concerns about its growth prospects. (BBG) Figma (-3.5%) shares dropped after the company reported third-quarter results, with analyst noting sequential decline in adjusted gross margin. (BBG) Snap (-9.5%) fell after the company reported third-quarter ad revenue and user growth that missed estimates, with Chief Executive Officer Evan Spiegel acknowledging that “advertising revenue growth remains below our ambitions.” (BBG) MercadoLibre (-5.6%) shares slid after the company posted third quarter earnings that missed profit estimates as investors weigh whether the company’s heavy investments translate into stronger profitability over the long run. (BBG) Expedia (-5%) shares are down even after the online travel agency raised its gross bookings forecast for the full year. Still, the midpoint of its fourth-quarter bookings projection trailed the average analyst estimate. (BBG) Wolfspeed (-3.6%) reported a larger loss per share than expected but gave revenue gudiance above estimates whilst forecasting an inflection to breakeven on adusted gross margins going ahead, noting an accelerating AI order book. (Wolfspeed) Zillow (-17%) shares plunged after the digital real estate company reported adjusted earnings per share and revenue for the third-quarter that missed the average analyste estimate. The firm also said that adjusted earnings in the next quarter could be the weakest in three years. (BBG) OpenAI’s enterprise sales overtook consumer revenue in Q3, driven by coding tools, GPT-5.6 Sol and ChatGPT Work, Greg Brockman told WSJ Tech. He described Q1–Q2 as rough before the third-quarter inflection. (WSJ) Brockman said he thinks OpenAI can be ready to go public in 2027, while stressing it will list when the timing is right. No listing date was announced. (WSJ, Reuters) Microsoft declined an option to more than double its existing Nscale compute contract in Texas, potentially worth tens of billions, new FT/Reuters reporting revealed. Reuters’ source says the decision predates September’s IPO filing; the existing contract and Nscale’s $103bn backlog are unaffected. (FT, Reuters) Nscale is separately discussing an expanded Anthropic agreement covering a second 460MW data centre at its West Virginia site, a person familiar with the matter told the FT. No expansion agreement is confirmed. (FT) Meta said it must work with local officials to determine the future of its $1bn Piqua, Ohio, data-centre investment. Voters restricted new construction and recalled three commissioners involved in approving the project. (FT) Bloomberg reported that nearly all of at least 45 local US measures restricting data-center development had passed or were heading for approval. Harwood, North Dakota, was the notable exception, rejecting restrictions affecting Applied Digital’s Oracle-linked project. (BBG) Goldman and Apollo are in talks with Wall Street investors to start selling portions of a roughly $40 billion chip financing deal for SpaceX. The package funds ~$47.3bn of Rubin equipment due H1 2027; lease documents leave SpaceX liable for rent even under force majeure. (BBG) Alphabet Inc.’s Isomorphic Labs is in talks to raise roughly $5 billion in new funds to support its efforts to use AI for drug discovery, according to Bloomberg soruces. The round would value Isomorphic, which spun out of Alphabet’s Google DeepMind, at about $50 billion. (BBG) Pan Alto is in talks to acquire Clutch Security for ~$500m, The Information reports. Clutch tracks passwords and authentication credentials used by AI agents, extending Palo Alto’s push into non-human identity security. (The Information, Globes) AI-chip startup Tenspresso is negotiating at least $50m of funding at a $500m valuation, people familiar said. Founded by former Google TPU engineers, it aims to complete its first chip design in late 2027 or early 2028. (BBG) DayOne secured a five-year HK$1.86bn ($237m) loan for a Hong Kong data center and refinancing, people familiar said. Pricing is 152bp over Hibor, with a potential reduction for meeting sustainability targets. (BBG) Counterpoint puts Q3 global DRAM revenue near $200bn, up 369% YoY, while quarterly bit shipments rose only ~4%. Samsung retained 38% share; Hynix revenue grew over 40% QoQ, with pricing doing most of the industry’s growth work. (Counterpoint) SK Hynix’s HBM4 yield has reportedly reached the mid-60% range, DIGITIMES reports, describing it as the industry’s highest. This is a reported manufacturing-yield estimate. (DIGITIMES) TrendForce analyst Chia-Yuan Hsu estimates current server-RDIMM contract prices imply roughly $80,000 of revenue per DRAM wafer. He sees supply constraints continuing through 2027, with new fabs not arriving before 2028. (China Times) Foxconn's October revenue jumped 46% to NT$1.31tn ($39.7bn) on AI-server demand. Bloomberg said analysts expect roughly 30% growth across the December quarter. (BBG) ABB confirmed China blocked SoftBank’s acquisition of its robotics business in China, complicating the wider $5.375bn deal; constructive discussions continue. The FT reported concerns that robotics data could be transferred overseas to train AI models. (FT, WSJ, BBG) Sony Group Corp. raised its profit outlook after a string of entertainment hits propelled better-than-expected results in the September quarter. (BBG) Nintendo Co. reported a surprise quarterly profit decline, hurt by a dearth of major new game releases and rising Switch 2 component costs. (BBG) Toyota Motor Corp. shares climbed the most in nearly four decades after the automaker, emboldened by strong demand for its hybrid vehicles, raised annual profit forecast and stepped up shareholder returns. (BBG) Toyota established a dedicated robotics division under production chief Takefumi Shiga to accelerate commercialization and deployment, consolidating its existing robotics work into one organization. (BBG, FT) Chinese renewable-energy stocks extended their rally: Suzhou Maxwell rose as much as 20%, CSI Solar nearly 18% and Sungrow 12.5%. Investors priced lower US regulatory risks, although Citi and Bloomberg Intelligence cautioned that Chinese overcapacity and trade barriers remain. (BBG) Air France-KLM is deepening an overhaul of its Dutch subsidiary as the airline group grapples with higher fuel expenses and a cost-of-living crisis that’s starting to deter some passengers. (BBG) Siemens Healthineers will drop “Siemens” from its name and rename its diagnostics operation Olyrian Diagnostics as it prepares that business for a standalone carve-out. The parent-company separation still requires shareholder approvals in February. (WSJ)

ICYMI O/N & WEEKEND — MONDAY 2 NOVEMBER MACRO: Oil declined following a report that US President Donald Trump wants to give diplomacy with Iran more time before any move to resume strikes. (BBG) Trump said he may become “Mr. Veto” if Democrats win Congress, before eventually negotiating deals. His comments came in a New York Post interview preview aired Sunday on Fox News. (BBG) Kalshi and Polymarket priced Democrats above 60% to win the Senate and above 90% for the House in WSJ’s Saturday report. The paper cautioned that thinner election trading and uncertain polling inputs could undermine those signals. (WSJ) US early voting exceeded 48.5mn, a midterm record, with registered Democrats accounting for 44% versus Republicans’ 32% in reporting states. The figures reflect voter registration, not vote choice, and changing voting habits limit their predictive value. (BBG) Democrats sought on Monday to contain a rift in Michigan's US Senate race after one of their own crossed party lines to endorse the Republican candidate, as both parties made final pitches before midterm elections that will decide control of Congress. (RTRS) Trump’s Justice Department has shown a willingness to intervene directly in Tuesday's midterm elections, breaking with decades of practice meant to avoid the appearance that its law enforcement powers are being used to benefit a political party or candidate. (RTRS) OpenAI has raised about $11 billion in its latest funding round, falling short of its initial $30 billion target. The funding round values OpenAI at $1.25 trillion, which is below the $1.4 trillion valuation the company had hoped to achieve. (FT, WSJ) CoreWeave, Nebius and Nscale have effectively been shut out of new high-yield bond issuance in recent weeks, WSJ reports. (WSJ) AI investors and tech executives are seeking downside protection through options and credit-default swaps amid concerns of a sector-wide slowdown. Trading firms Jump and Susquehanna are developing derivatives and hedging structures tied to computing power to help clients manage risk. (WSJ) SemiAnalysis sees the datacentre election risk concentrated in 2028: roughly 75% of its 33.8GW 2027 pipeline is already under construction, while most of the projected 62.2GW of 2028 US additions has yet to start. Texas, representing almost 30% of 2028 capacity, is its biggest permitting risk. (SemiAnalysis) Citi expects the US Treasury to announce cuts in 20- and 30-year auction sizes starting this month at Wednesday’s refunding. That is an outlier forecast, with other dealers expecting guidance changes ahead of reductions in 2027. (BBG) JPMorgan expects Treasury to retain its current guidance and leave coupon auction sizes unchanged through next August. UBS also favours guidance over immediate action and sees no issuance change until May. (BBG) PGIM economist Robert Sockin told the FT US recession risk might now be 25%, versus 20% a month ago and 10% earlier this year. He warned that AI-led overheating creates larger risks at both ends of the growth outlook. (FT) PGIM and Morgan Stanley Investment Management told the FT they were pausing bond-market positioning ahead of the midterms and forthcoming US data. MSIM’s Vishal Khanduja sees divided Congress as broadly supportive for bonds through greater fiscal restraint. (FT) Morgan Stanley’s Mike Wilson sees possible downside toward 7,100 on the S&P around the midterms, AI spending concerns and liquidity constraints. He told Bloomberg such weakness would be a buying opportunity ahead of an eventual move toward 8,000. (BBG) DB’s Binky Chadha upgraded Tech to Overweight from Neutral following its sharp relative selloff. The argument: positioning has reset and now discounts a substantial earnings slowdown. (DB) BTIG remains bearish on semis, saying the sector has broken below its 200-day moving average for a second time, while SOXX is breaking support. Said this is not what a bottom looks like. (BTIG) A prolonged sell-off in riskiest global junk debt has caused steep losses for credit investors, with yields on CCC-rated borrowers topping 21% in Europe and 18% in the US, up from roughly 16% and 15% early in the year. (FT) Arini Capital Management has sold about $800 million in debt holdings in recent weeks, partly due to margin calls from banks. The firm’s flagship fund lost over 20% this year as of mid-October, dragged down by wagers in distressed credits like Altice International. (WSJ) Carlyle Group, KKR and Oaktree are among the money managers hoping to pounce on US leveraged loans increasingly selling at bargain prices. Many other fund managers are looking at doing the same, according to strategists at Barclays. (BBG) 'Bitcoin’s Resilience After Binance Hack Masks Market Jitters' Bloomberg article notes the resilience in price of Bitcoin since the theft is being attributed to Binance’s reimbursement commitment and purchases to replace customer assets. (BBG) Binance users withdrew a net $3.64bn in the nine-and-a-half hours after withdrawal services restarted on Sunday. The exchange processed $4.65bn of withdrawals against $1.01bn of deposits, with access being restored progressively across tokens and networks. (FT) Binance said it had assembled assets covering 95% of the stolen funds using its revenues and emergency fund. It was buying the remaining 5% in the market, saying those tokens were less liquid and harder to source at scale. (FT) The FBI on Saturday attributed the Binance theft to North Korea-linked TraderTraitor, moving beyond the earlier private-sector assessments. It said stolen assets were being converted primarily into ether and warned further laundering through decentralised-finance and instant-swap services was expected. (FT) Trump said a US–Canada trade deal is very close after talks with Carney. Carney’s statement was more measured: teams will work over coming weeks toward a mutually beneficial agreement respecting Canadian sovereignty. (BBG) Factory activity across Asia continued to expand in October but growth slowed in major chip exporters, private surveys showed on Monday, suggesting the AI boom may be losing momentum as markets start to question the sector's profitability. (RTRS) Japan has made gradual progress towards anchoring inflation around the central bank's 2% ​target, the Bank of Japan said in a report on ‌Monday, bolstering the case for raising interest rates. (BBG) Japanese authorities are prepared to respond if currency market movements become disorderly, acting in accordance with a standing pact with her US counterpart, Finance Minister Satsuki Katayama said, one day before the US holds its midterm elections. (BBG) BoJ’s full quarterly report warned shrinking population makes robust aggregate consumption growth increasingly difficult. Weak headline spending alone may therefore overstate deterioration in household demand as officials assess further tightening. (BBG) Tokyo and Chubu next-day power prices reached their highest since September 2022 on Sunday, at ¥36.11 and ¥36.29/kWh respectively. Elevated LNG costs are feeding into electricity prices despite a fall in the nationwide average. (BBG) Chinese stocks advanced on expectations of renewed liquidity support after reports that regulators met with banks and brokerages to discuss market measures. (BBG) China’s economic activity slowed sharply in October, with gauges of manufacturing, services and construction all pointing to a loss of momentum. The official manufacturing purchasing managers index fell to 49.3 in October, down from 50.1 in September, said the National Bureau of Statistics on Saturday. (WSJ) Chinese buying of US farm goods other than soybeans is on track for a seven-year low this year despite an agreement to purchase billions of dollars in imports, a Reuters analysis of customs data showed, underscoring long-running uncertainties about the deal. (RTRS) China’s central bank launched daily overnight reverse repurchase operations on Monday, kicking off a revamped liquidity framework that establishes the short-term tool as its primary policy anchor. (BBG) Primavera’s Fred Hu urged China to take much bolder action to revive domestic consumption and investor confidence. He told Bloomberg TV the absence of inflation pressure gives the central bank considerable room to act. (BBG) A Rhodium report published Monday finds China nearly doubled production of some key chemicals between 2020 and 2025 and is displacing foreign suppliers in domestic and overseas markets. It also finds substantial losses and rising inventories despite the expansion. (FT) China published a Communist Party decision calling for tougher action against corruption using crypto, blockchain and cross-border funds. The document also targets concealed interests, proxy holdings and illicit local-government debt. (BBG) Macau October gaming revenue fell 10% y/y to MOP21.68bn, matching expectations and marking a fifth monthly decline. Golden Week visitor growth failed to offset weaker high-end spending. (BBG) Most economists expect the RBA to hike 25bp to 4.85% Tuesday, its fifth increase this year; markets priced roughly 80% probability. Updated forecasts and Bullock’s press conference will accompany the decision. (BBG) Australian home prices fell 1.2% m/m in October, with capital-city prices down 1.4%, according to Cotality. It was the seventh consecutive monthly decline; AMP now expects a 15% peak-to-trough fall. (WSJ) UK manufacturers started the final quarter of 2026 with the strongest output growth in more than two years, a survey showed on Monday, although fast-rising costs may worry the Bank of England, which looks set to raise interest rates this week. (RTRS) The BOE is expected to raise rates 25bp to 4% on Thursday, but could push back against markets pricing an eventual 5% rate. Its updated forecasts are likely to show inflation exceeding 4% early next year. (WSJ) UK PM Burnham’s draft ten-year plan is due in mid-December, The Sunday Times reported. It covers utility control, AI, pensions and care, and will identify spending priorities; the document remains subject to change. (Sunday Times) UK Chancellor Healey told the BBC welfare spending will be brought down but declined to set a savings timetable. The government will await two reviews before legislating reforms next year. (BBG) The BoE is considering raising the threshold defining higher-risk mortgages from 4.5 to five times household income, sources told the FT. UK Finance estimates this could release lending capacity equivalent to 7% of new residential mortgages; no change has been approved. (FT) Fitch unexpectedly cut France’s rating outlook to negative, affirming A+, citing weaker growth, higher borrowing costs and a wider deficit. Political fragmentation and protests make sustained fiscal consolidation harder, the agency said late Friday. (BBG) ECB's Kazimir said the ECB will have to raise interest rates again to prevent high inflation from getting entrenched and markets may be underestimating what is needed to quell price pressures. (RTRS) Euro zone manufacturing activity growth held up well in October, albeit easing as new order growth slowed and rising costs from energy and supply-chain disruptions squeezed margins, a survey showed on Monday. (RTRS) Germany's manufacturing sector expanded solidly in October as rising export sales and government-linked demand supported output and orders, a business survey showed on Monday. (RTRS) Germany’s AfD is reconsidering its push to leave the euro and EU, Reuters reported. A strategy paper prioritises treaty reform and leaves open retaining the common currency; no formal abandonment of its exit policy was confirmed. (RTRS) Germany must review and improve the mechanism for filling its gas caverns, gas storage industry association INES said on Sunday, as storage levels in Europe's top economy remained at record lows ahead of the winter season. (RTRS) Belgian PM Bart De Wever was expected to offer his government’s resignation after overnight budget talks failed. The reporting reviewed had not established that King Philippe accepted a resignation by the cutoff. (Le Soir) Taiwan’s central bank told some banks exporters’ dollar sales would no longer face daily limits, FX traders said. The Taiwan dollar rebounded after the move, with one-month NDFs strengthening as much as 0.4% to 32.535/$. (BBG) Foreign investors sold a record $31.78bn of Taiwanese shares in October, exceeding March’s previous high. The outflows helped drive a roughly 2% monthly decline in the Taiwan dollar. (BBG) India's markets regulator has recommended the government remove the long-term capital gains (LTCG) tax imposed on foreign investors, two people with direct knowledge of the matter said, as India looks to galvanise its underachieving equity markets. (RTRS) Brandywine’s Carol Lye said Philippine bonds could become an Asian outperformer once inflation stabilises and Iran risks ease. The firm already owns the debt but is holding off adding because of poor liquidity and further yield risk. (BBG) Colombia’s Vice President Restrepo warned in Semana that the country risks default next year unless Congress passes its fiscal rescue bill by year-end. The government estimates the deficit could exceed 9% of GDP without adjustment. (BBG) IRAN: UAE presidential adviser Anwar Gargash said Sunday that US and Iranian positions remained far apart and the region was braced for the worst. Regional officials fear renewed strikes could target Iranian nuclear, missile and power infrastructure after Tuesday’s vote. (FT) Iranian negotiators left Doha talks on Sunday, but not due to difficulties in negotiations, an official briefed on talks told Reuters on Monday. A draft proposal wad being circulated for feedback and a follow-up meeting is possible, the official added. (RTRS) Netanyahu pressed Trump in a Saturday call for strikes on Iran immediately after the US midterms, while Trump remained focused on talks, according to US and Israeli sources cited by Axios. (Axios) US commentator Tucker Carlson claimed late Sunday that the Trump administration could be days away from launching a nuclear strike on Iran's Pickaxe Mountain, alleging that Israeli Prime Minister Benjamin Netanyahu is pressuring Trump to authorize an attack. (AA) US Secretary of State Rubio said Trump had made no decision on fresh strikes against Iran and had set no deadline for the Qatar talks. (Rubio transcript) MS NOW reported that US officials had warned Gulf allies to prepare for a short, intense round of strikes on Iran as soon as 4 November. The White House said no attack decision had been made. (MS NOW) Trump said at a Sunday rally that he was holding back to save lives, but that the US might eventually have to give Iran “the hammer.” (Trump transcript) Iran Supreme Leader Khamenei ordered commanders to expand potential US and Israeli targets and prepare immediate retaliation without geographic limits. The statement marks his first known gathering of top commanders as supreme leader; its location and date were unspecified. (Official statement) Iranian military chief Ali Abdollahi signalled the possibility of pre-emptive strikes, saying the armed forces would not wait for an enemy attack once indications of hostile action were confirmed. (FT) Iran’s foreign ministry said its deputy foreign minister went to Doha to help relay indirect messages with the US. It said Qalibaf remains Iran’s lead negotiator. (IRNA) Iran’s foreign ministry said transferring its 60%-enriched uranium to a third country had not been raised in Doha and would be rejected by Tehran. (Iran International) Iran said it has not reached the stage of considering renewed IAEA inspections. (IRNA) Iranian security chief Mohsen Rezaei said he had read Vance’s letter but had not replied, describing a complete change in Washington’s tone as a positive sign. He declined to disclose the letter’s contents. (AFP) Pakistan negotiated with Iran to secure safe passage for liquefied natural gas carrier Al Mayeda before the ship was attacked near the Strait of Hormuz on Friday, according to Bloomberg sources. (BBG) OPEC+’s seven-country subgroup left December output quotas unchanged. Members will meet again November 29, while Gulf producers remain constrained in their ability to use existing targets. (OPEC) Goldman raised December Brent to $105 from $90 and its 2027 average to $88, up 10%. Its base case now allows for 1mn b/d of global supply disruption next year; a severe Gulf shortfall could produce $130 average Brent. (BBG) Trump has been asking allies about Hegseth’s and Caine’s performances as he considers renewed Iran strikes, The Atlantic reported. The White House said both retain his confidence. (The Atlantic) GEOPOLITICAL: The US is pushing to restart Russian pipeline-gas sales to Europe through Ukraine as an incentive for an energy ceasefire, WSJ reveals. The proposal envisages a US intermediary and escrow arrangements, but faces European resistance ahead of planned mid-November talks in Abu Dhabi. (WSJ) Ukraine struck the Bashneft refinery complex in Ufa Saturday, a source said, resuming pressure on Russian processing capacity. The three refineries have combined capacity exceeding 470,000 b/d; Russian officials had not confirmed damage. (BBG) NASA imagery showed a fresh heat anomaly at Russia’s Samara crude-pumping and storage hub Monday, potentially indicating fire. The major facility handles western Siberian and Kazakh crude; Ukraine had not confirmed a strike there. (BBG) Russian overnight strikes left 200,000 households without power in Dnipro and another 80,000 in Kyiv, Zelenskyy said Saturday. Ukraine imposed prolonged outages, with some residents facing more than 15 hours without electricity. (FT) Romania scrambled four F-16s and a helicopter after two drones entered its northeastern airspace Saturday. One left, the second was last tracked between Vaslui and Bacau; no crashes were reported. (Romanian defence ministry) The newly approved 500 Patriot interceptors for Ukraine are expected only after 2030, sources told RFE/RL. Zelensky urged immediate transfers from allied stockpiles to cover this winter instead. (Polish Radio/PAP) Russian shadow-fleet oil tankers are using makeshift netting, cages and rubber tires to protect against Ukrainian drone strikes. At least 60 ships with countermeasures have been documented transiting the Bosporus since August. (WSJ) US Secretary of State Rubio defended Russia’s inclusion in G20 meetings, saying negotiations are necessary to end the Ukraine war. Several allies refused the traditional group photograph with Lavrov at the Atlanta gathering. (BBG) Bulgaria’s Russia-friendly interim president Iliana Yotova won Sunday’s election with more than 57%, defeating pro-western Andrey Gyurov on just under 40%. Turnout was 29%, according to final results reported by the FT. (FT) WSJ’s new ship-tracking investigation found Chinese research vessels mapping waters east and south of Taiwan that could be important to submarine operations and US intervention. Taiwan’s coast guard described the activity as preparation of the battlespace. (WSJ) China’s navy now exceeds 400 ships and submarines, roughly 35% larger than the US fleet by hull count, according to new US official figures seen by WSJ. The US remains ahead by tonnage, while China’s shipbuilding capacity supports continued expansion. (WSJ) NATO diplomats fear a Republican midterm defeat could prompt Trump to withdraw US troops from Europe or cut alliance funding, Politico reported. These are allied concerns, with no such decision announced. (Politico) North Korea said it tested a cluster warhead for tactical ballistic missiles Saturday and plans to let units select among four types by year-end. Its claimed 12–13-hectare destruction footprint was not independently verified. (RTRS) EQUITIES: Alphabet Inc. kicked off its second sale of euro bonds this year, testing investor demand less than a week after its disappointing third-quarter earnings sent the stock to a record drop and pushed spreads wider across the technology sector. (BBG) Meta’s S&P outlook moved to Negative from Stable; its AA- rating was affirmed. S&P forecasts free operating cash-flow deficits of $39bn in 2026 and $71bn in 2027, with leverage potentially exceeding the rating’s 1x threshold next year. (RTRS) Elon Musk is reportedly taking a more pragmatic approach to Terafab and revisiting collaboration with TSMC, according to DIGITIMES supply-chain reporting. This is discussion of a possible manufacturing arrangement, rather than a signed agreement. (DIGITIMES) Musk said serving Grok Bot had become unsustainably expensive relative to its revenue, responding to complaints about sharply increased usage consumption. (Elon Musk) A federal judge rejected xAI’s bid to dismiss the NAACP’s Clean Air Act lawsuit over unpermitted turbines powering its Colossus data centre. (TechCrunch) Meta built a humanoid prototype with Chinese robotics company Fourier and is working on a second version, The Information reported. Reuters could not independently verify the report. (The Information, Reuters) Zion Research Group tells the FT that all of Microsoft's free cash flow comes from financial engineering across four main forms totalling $75.3B last year. Zion says the practice is transparent but represents lower-quality cash flow, raising questions about whether Microsoft's premium valuation at 25 times forward earnings is justified.. (FT) OpenAI's Altman met roughly 50 Samsung executives Saturday to deepen cooperation across memory supply and AI infrastructure. The meeting builds on the existing Stargate partnership amid intensifying global memory shortages. (BBG) Anthropic’s Japanese IPO filing outlined up to ¥552.9bn/$3.5bn of new shares for Japanese investors, with proceeds for working capital, operating costs and capex. The filing did not disclose the overall IPO size or valuation. (RTRS) Nebius decided against pursuing a debut high-yield bond offering as financing costs climbed. Its COO said asset-backed financing remained available, pushing back on a broader suggestion that those funding markets had closed. (WSJ) Nscale is leaning towards a December IPO after targeting November, WSJ reports. Tougher terms demanded by potential backers of its $45bn Anthropic data centre have delayed its revised prospectus; bankers doubt demand will support the targeted $30–35bn valuation. (WSJ) Lambda cut its target fundraising valuation to $13bn from $14.5bn after investors including Coatue declined to participate, WSJ reports. The neocloud is seeking $4bn in its final private round before an IPO. (WSJ) AI startup Baseten is preparing a roughly $2bn funding round with tranches valuing it at $26bn and $30bn, sources said. Sands Capital is set to lead; the AI inference platform was valued at $13bn in June. (BBG) Brookfield has selected KB Kookmin Bank to be lead arranger for South Korea’s largest-ever syndicated loan (KRW10.7tn/$8bn) that will help finance the purchase of AI chips for use by domestic tech giant Naver Corp. (BBG) Singapore-based data center operator STT GDC Pte. is in talks with banks for a S$3.1 billion ($2.4 billion) syndicated loan, according to Bloomberg sources, as the AI boom continues to fuel demand for debt among companies building the infrastructure. (BBG) Apple confirmed Apple Intelligence’s mainland China developer beta starts 4 November, with public availability in December through iOS 27.3 and Qwen integration. The initial rollout excludes Siri AI and the next-generation features shown at WWDC26. (Apple) Apple is offering replacements for iPhone Duo units with cracked inner displays, Reuters reported. Demand still appears supply constrained: BofA put average delivery waits at 79 days, pushing shipments into January. (RTRS) Google is in early talks to support data security for Golden Dome, sources said, potentially using its storage, networking and cybersecurity capabilities. The Pentagon said no final decision on a new consortium or participants has been made. (BBG) Samsung notified customers it will end all 8-inch foundry production by the end of 2030, according to The Elec. This provides a specific shutdown deadline as the company shifts resources towards advanced 12-inch processes. (The Elec) SK Hynix’s SOCAMM2 orders are increasing sequentially as it expands production for Vera Rubin, DIGITIMES reports. PCB makers are accelerating capacity additions, but tight copper-clad laminate availability is pushing up substrate prices. (DIGITIMES) OpenAI’s first custom ASIC is expected to use TSMC 3nm, while a second generation is reportedly targeting A16, according to Commercial Times supply-chain sources. (Commercial Times)

The rot in AI CDS has paused over past week or so, with CRWV tightening further today. The $95bn share issuance from META, the $63bn Broadcom deal, and "strong" cash position from Anthropic factors are all helping calm the financing concerns. The build out has not frozen.