Market Wrap 2025-11-03

Core-Brief

03 Nov 2025 — 15 min read

European stock markets are showing gains, encouraged by positive developments in EU-China trade relations. US equity futures are also increasing.
The US dollar is slightly stronger and is approaching the 100.00 level. The Swiss franc is being affected by CPI data.
Bond markets are relatively stable as participants await central bank commentary and the ISM Manufacturing series data.
Crude oil prices reversed initial gains after OPEC+ decided to increase output again by a modest 137,000 barrels per day in December, followed by a pause for the first quarter of 2026. Gold is essentially unchanged, while base metals are reacting to a disappointing Chinese RatingDog Manufacturing PMI.
Key events to watch include the US Final Manufacturing PMI, the US ISM Manufacturing PMI, speeches from Fed officials Daly and Cook, ECB's Lane, and BoC's Macklem, a gilt sale from the Bank of England (long-term), and US Financing Estimates.

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TARIFFS/TRADE

US President Trump stated on Friday regarding China that he would like to eliminate the additional 10% tariff and that the meeting with China was remarkable, adding that he believes the deal with China will be long-lasting. It was also reported that US President Trump told Chinese President Xi that chip sales are "between you and NVIDIA".
US President Trump said the US will not allow China to have NVIDIA's (NVDA) most advanced chips. He also mentioned that he will not attend Supreme Court tariff case arguments and does not want to detract from the importance of that decision. Furthermore, Trump posted that the tariff case is one of the most important in the history of the country, and if a President is not allowed to use tariffs, the US will be at a major disadvantage against all other countries throughout the world, warning that if they lose the decision, the US could be reduced to almost third-world status.
US Treasury Secretary Bessent said China has proven to be an unreliable partner in many areas. He also commented, “we’ll see” if a 10% tariff will be enacted on Canada after the Reagan advertisement, and he is not planning on attending the Supreme Court arguments on trade policy on Wednesday, according to CNN.
China’s Commerce Ministry said it will consider exemptions for the Nexperia chip export ban. Separately, Nexperia’s Dutch headquarters said it welcomes announcements lifting the block on shipping chips, while the Dutch government said that China talks continue regarding a constructive way forward in Nexperia.
Chinese President Xi proposed that China and South Korea properly manage differences through friendly consultations, calling for the sides to strengthen strategic communication and consolidate the foundation of mutual trust. Xi also called for deepening China and South Korea cooperation in emerging sectors such as AI and biopharmaceuticals, and urged South Korea to work with China to practice true multilateralism and safeguard the multilateral trading system.
South Korea’s presidential office said South Korea and China signed 7 MOUs, including a currency swap. It was also reported that a South Korean presidential adviser said they agreed with China to cooperate on stabilising supply chains and will continue working-level communication on China’s ban on Korean culture, while South Korea and China were said to have made progress on China’s effective ban on Korean culture.
Japanese PM Takaichi said they agreed with Chinese President Xi to build a constructive and stable relationship, and she reaffirmed a strong US-Japan alliance through US President Trump’s visit. Furthermore, Takaichi said they are not planning to renegotiate the USD 550 billion investment package with the US even after seeing the US-South Korea package.
Canadian PM Carney met with Japanese PM Takaichi on the APEC sidelines and discussed the potential to expand a productive economic relationship between the two countries, building on USD 32 billion in annual two-way merchandise trade. The Canadian PM’s office said they stand ready to negotiate an even better trade deal for both Canada and the US.
China’s MOFCOM says China and the EU held in-depth and constructive talks on mutual export control concerns; both sides agreed to maintain dialogue to support stable and smooth supply chains between the economies.
China is said to be seeking to buy US wheat for the first time in a year, according to Bloomberg sources.

EUROPEAN TRADE

EQUITIES

European stock exchanges (STOXX 600 +0.4%) opened with mixed performance, fluctuating around the unchanged level, but then experienced a boost shortly after the market open. The upside lacked specific catalysts but occurred amid positive developments related to Nexperia and constructive EU-China trade discussions over the weekend.
European sectors initially showed a negative trend but are now mixed. The automotive sector is the clear outperformer, driven by the Nexperia developments over the weekend, specifically China's decision to loosen its chip export ban to Europe, which benefits European automakers, such as Mercedes-Benz (+3.6%). Basic Resources is at the bottom, following China's decision to pause rare earth export controls to the EU; Rio Tinto (-1.2%).
US equity futures (ES +0.3% NQ +0.5% RTY +0.2%) are generally firmer, with the tech-heavy NQ showing slight outperformance. Focus today will be on several Fed speakers and the ISM Manufacturing data.
Alphabet (GOOGL) was added to the US Analyst Focus List at JPMorgan.
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FX

The USD has started the week positively, extending gains from the previous week, which were primarily driven by a more hawkish Fed announcement and improved trade relations between China and the US. While official data releases are still lacking, this week will feature several private surveys, starting with the ISM manufacturing print, which is expected to remain in contractionary territory, contrasting with expectations of an expansionary print in the services metric on Wednesday. Today's speaker schedule includes Fed's Daly and Cook. The DXY has risen to as high as 99.92, focusing on a potential test of 100, a level not breached since August 1st (when the high was 100.25).
The EUR is weaker against the broadly stronger USD, with limited incremental macro drivers for the Eurozone following last week's uneventful ECB policy announcement. Messaging since then has reaffirmed the tone set by ECB President Lagarde, with Nagel of Germany being the latest to argue that there is no need to adjust policy in the near term based on the current outlook for the ECB. Notably, Chief Economist Lane is scheduled to speak at 12:00 GMT. The Eurozone manufacturing PMI was unrevised at 50, as expected, with the accompanying report noting that "demand across the eurozone economy remained subdued." On a more encouraging note, China’s MOFCOM said China and the EU held in-depth and constructive talks on mutual export control concerns, with both sides agreeing to maintain dialogue to support stable and smooth supply chains between the economies. EUR/USD has slipped to its lowest level since August 1st, with a session trough at 1.1511.
The JPY is slightly lower against the USD, with USD/JPY holding above the 154 mark. Japan was away from the market overnight, resulting in limited news flow surrounding Japan. The Japanese calendar is light this week, aside from Cash Earnings data on Thursday. Currently, markets price only a circa 28% chance of a BoJ rate hike in December. USD/JPY has reached as high as 154.28 but has yet to test Friday's best at 154.41.
The GBP is soft against the USD but flat against the EUR. News flow continues to center on the November 26th budget, with the latest reporting suggesting that UK Chancellor Reeves will target pensions of high earners and expensive homes. The potential outcomes for the budget are vast at this stage. However, consensus is gradually coalescing around the view that Reeves will attempt to establish a greater financial buffer via a range of tax increases (e.g., freezing income thresholds, expanding NIC coverage, etc.) that are expected to be non-inflationary and growth restrictive. Elsewhere, the UK manufacturing PMI has been revised slightly higher but ultimately remains below the 50 mark. Cable has slipped to a low of 1.3118 but is holding above Friday's 1.3097 base.
Antipodeans are both slightly more resilient than most peers against the USD, with the AUD managing to overlook a disappointing Chinese RatingDog Manufacturing PMI print overnight, which was hampered by a sharp decline in export orders. Instead, attention is focused on tomorrow's RBA policy announcement, with markets assigning a circa 94% chance of an unchanged rate following last week's hotter-than-expected Q3 inflation report.
The CHF is one of the laggards across the majors following softer-than-expected Swiss inflation data for October. The Y/Y CPI unexpectedly slowed to 0.1% from 0.2% versus consensus of a pick-up to 0.3%, while the M/M rate printed at just -0.3% (expected -0.1%, previous -0.2%); both prints were below the bottom-end of analyst forecasts.
US President Trump's administration reportedly discussed ways to encourage other nations to adopt the USD as their primary currency, according to the FT, which adds that no final decision has been taken.
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FIXED INCOME

USTs are firmer by a handful of ticks. Price action this morning was limited for USTs at first owing to the Japanese closure for Culture Day. USTs picked up a bit more into the European day alongside benchmarks generally and despite an uptick in equity performance. Action that took USTs to a 112-27 peak, nearly matching Friday’s 112-27+ high, last week’s 112-29+ best just above. Markets will get Cook (voter) and Daly (2027) later today, in addition to the refinancing estimates ahead of Wednesday’s Quarterly Refunding Announcement. Before that, ISM Manufacturing hits and given the lack of NFP on Friday owing to the shutdown the employment component may draw even-greater attention than usual. This week, we will get ADP and Challenger but no JOLTs, weekly claims or as mentioned, NFP.
OATs are modestly firmer. Friday’s Zucman tax measures failed to garner support in the National Assembly on Friday, though a slight adjustment was made to a real estate tax to target “unproductive wealth”. Supported by the Socialist Party, but markedly shy of the measures they seek. Amidst this, the OAT-Bund 10yr yield spread has narrowed a touch to just above the 78bps mark, potentially trading off the c. 10 day reprieve Lecornu may very well have.
Bunds drifted lower overnight and then came under pressure this morning on the announcement of six-part EUR denominated Alphabet issuance, an update that sent Bunds to a 129.24 trough with downside of 15 ticks at most. However, the move proved somewhat short-lived with Bunds bouncing thereafter to 129.41, but still shy of the overnight early doors 129.46 peak. Upside that started around the European cash equity open and despite the equity tone picking up at the time amid the MOFCOM announcing in-depth China-EU talks. While firmer the action, as is the case with USTs, leaves Bunds just shy of Friday’s 129.49 best and last week’s peak at 129.73. No substantial move to the Final Manufacturing PMIs this morning, neatly surmised by HCOB as “fragile in Germany, in recession in France, persistently weak in Italy, and showing only subdued growth in Spain.“
Gilts opened with upside of a handful of ticks at 93.65 before extending to a 93.74 peak in tandem with peers as outlined above, a high that just about eclipses Friday’s 93.71 best but stopped shy of 93.89 and 93.96 from earlier that week. No move to a slight upward revision to the Final Manufacturing PMI, but one that left it in contractionary territory. The release highlighted that manufacturing is in a holding pattern, awaiting clarity on the domestic fiscal and geopolitical backdrop. Weekend press reports focussed on the fiscal situation, as Reeves is said to be preparing a pension tax raid of as much as GBP 4bln, according to The Telegraph. Additionally, the FT reports that the Treasury is looking into higher council tax bands, a tweak that could raise several billion pounds.
Alphabet (GOOGL) mandates EUR-denominated 3yr, 6yr, 9yr, 13yr, 19yr & 39yr bonds; proceeds for general corporate purposes, incl. the repayment of outstanding debt.
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COMMODITIES

Crude benchmarks initially gapped higher following the OPEC+ meeting on Sunday but have failed to hold onto gains, reversing back to the closing price of Friday’s session. WTI and Brent gapped and extended to a peak of USD 61.50/bbl and USD 65.32/bbl respectively before falling c. USD 0.80/bbl to a trough of USD 60.70/bbl and USD 63.98/bbl. Over the weekend, OPEC+ agreed to an oil production hike of 137k BPD for December but then to hold on oil hikes for the following three months. The three-month hold has been described by analysts as an acknowledgement by the group that the oil market is facing a sizable surplus.
Spot XAU fell straight on the open of the APAC session to a trough of USD 3962/oz before gradually reversing to a peak of USD 4028/oz just as the European session got underway. Currently, XAU is trading shy of best levels at USD 4006/oz as the global equity bid weighs on the yellow metal.
Base metals initially dropped as the APAC session got underway but reversed higher, with 3M LME Aluminium reaching near its highest prices since May 2022, as the market follows the wider positive sentiment in global equities. 3M LME Copper dipped to a trough of USD 10.84k/t early in the trading day before reversing to a peak of USD 10.93k/t and currently oscillating within this tight c. USD 100/t band. Overnight the red-metal lacked direction after disappointing Chinese PMI data.
Eight OPEC+ countries agreed to raise oil output in December by 137k bpd and then pause for Q1.
Turkish oil refiners are to cut Russian crude imports for December arrival with Azeri Socar buying four non-Russian cargoes, while Turkish state refiner Tupras increases purchases of non-Russian crude, according to sources cited by Reuters.
Morgan Stanley raises H1'26 Brent estimate to USD 60/bbl (prev. saw USD 57.50/bbl)
BP (BP /LN) CEO says oil demand remains robust, adds that 1% oil demand growth was helped by aviation and petchems.
UBS sees upside risks for gold towards USD 4,700/oz if political or financial market volatility increases again.
OPEC Secretary-General says the group has been consistently and regularly returning barrels to the market, have the flexibility to alter, pause and reverse past decisions. Making sure to maintain supply-demand balance. Group sees oil demand growth at 1.3mln BPD this year. Still sees good signs for demand. Not expecting any surprises in the market.
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NOTABLE DATA RECAP

Swiss CPI YY (Oct) 0.1% vs. Exp. 0.3% (Prev. 0.2%); CPI MM (Oct) -0.3% vs. Exp. -0.1% (Prev. -0.2%)
Turkish CPI MM (Oct) 2.55% vs. Exp. 2.83% (Prev. 3.23%)
EU HCOB Manufacturing Final PMI (Oct) 50.0 vs. Exp. 50.0 (Prev. 50.0)
Spanish HCOB Manufacturing PMI (Oct) 52.1 vs. Exp. 51.7 (Prev. 51.5)
Italian HCOB Manufacturing PMI (Oct) 49.9 vs. Exp. 49.3 (Prev. 49.0)
French HCOB Manufacturing PMI (Oct) 48.8 vs. Exp. 48.3 (Prev. 48.3)
German HCOB Manufacturing PMI (Oct) 49.6 vs. Exp. 49.6 (Prev. 49.6)
UK S&P Global Manufacturing PMI (Oct) 49.7 vs. Exp. 49.6 (Prev. 49.6)

NOTABLE EUROPEAN HEADLINES

UK Chancellor Reeves is reportedly considering higher bands of council tax to target expensive homes, via FT citing sources who said the idea is well established, the discussion is on the implementation; would reportedly raise several billion pounds. (FT)
The EU is devising plans to expand supervision of key financial markets infrastructure, including stock exchanges, crypto exchanges, and clearing houses, as it seeks to eliminate fragmentation in the single market, according to the FT.
German VDMA says German engineering order fell 19% Y/Y in September; domestic orders -5%, Foreign Orders -24%; July-Sept -6% Y/Y.
ECB's Kazimir says there's no time or need to fine-tune or overengineer monetary policy. Would not read too much into small deviations from a desired inflation path. There's a risk as broadly balanced for both the economy and inflation. The next move could be in either direction depending on the signals the ECB receives.

NOTABLE US HEADLINES

Fed’s Miran (voter) warned that the Fed risks a recession if it doesn’t cut rates rapidly, according to The New York Times.
US President Trump urged Senate Republicans to terminate the filibuster rule. US President Trump separately commented that they will ask the courts how they can legally fund SNAP benefits as soon as possible.
US Treasury Secretary Bessent said the Trump administration will not appeal the judge’s ruling on SNAP benefits, while he also commented that the Fed should be cutting rates if inflation is dropping, according to an interview with CNN.
US Democratic and Republican Senators are talking and focussed on finding agreement on FY26 spending bills, via Punchbowl; the hope being that a spending agreement could help to resolve the shutdown. On spending, talks continued over the weekend and there is some optimism around a resolution. However, there are no signs from Trump/Republicans around giving ground on extending the expiring premium Obamacare subsidies.

GEOPOLITICS

MIDDLE EAST

Israeli PM Netanyahu warned that Israel was prepared to take further action against Iran-allied groups, Hezbollah in Lebanon and Houthis in Yemen, according to FT.
Israel’s Defence Minister said the Lebanese government must fulfil its commitment to disarm Hezbollah and remove it from south Lebanon, while Israel vowed maximum enforcement will continue and intensify to protect northern residents.
Israel reportedly conducted artillery strikes and destroyed residential blocks in Khan Younis, southern Gaza Strip.
Israel announced on Sunday that it received the bodies of three hostages from the Red Cross in Gaza.
Iran’s President said Tehran will rebuild its nuclear facilities with greater power, according to state media.
Iranian Foreign Minister Araghchi reiterates Iran is not interested in direct negotiations with the US, via Iran International.
Iranian Foreign Ministry spokesperson Baghaei says Tehran remains committed to the Non-Proliferation Treaty (NPT) and its safeguards agreement, via Iran International.

RUSSIA-UKRAINE

US Pentagon was reported on Friday to have approved the White House to transfer US Tomahawk missiles to Ukraine, although left the final decision to the US President Trump, according to CNN, while the Russian Foreign Ministry said regarding reports about the US approval of Tomahawk supplies to Ukraine, that sending weapons to Kyiv will not help any settlement, according to RIA. However, US President Trump commented on Sunday that he is not really considering giving Ukraine Tomahawk missiles.
Ukraine drone attack causes fire at Russian Black Sea port of Tuapse, while authorities announced that an oil tanker and two foreign civilian vessels were damaged as a result of the drone attack on Russia’s Tuapse.
Ukraine’s military said it is raising the number of its assault groups to counteract Russian troops and that it has improved positions in several districts in Pokrovsk. However, it also stated that the situation in Pokrovsk remains complicated and dynamic, while Russia’s Defence Ministry said Ukrainian soldiers surrounded in Pokrovsk began to surrender.
Russia says it struck Ukrainian gas facilities, a military airfield, and a Ukrainian military equipment repair base in large overnight strikes.

OTHER

US President Trump's administration is reportedly planning a new mission in Mexico to target cartels, via NBC citing current & former officials; would include US troops on the ground, though deployment is not imminent.
US President Trump threatened to cut off all US aid to Nigeria over the killing of Christians and said the US might go into Nigeria with “guns-a-blazing”, while he instructed the Department of War to prepare for possible action and separately commented that there could be US troops on the ground in Nigeria or airstrikes.
US Secretary of War Hegseth posted "The killing of innocent Christians in Nigeria — and anywhere — must end immediately. The Department of War is preparing for action. Either the Nigerian Government protects Christians, or we will kill the Islamic Terrorists who are committing these horrible atrocities."
US and China agreed to set up direct communication between their militaries to help avoid conflict, according to US Secretary of War Hegseth, who also said the administration supports a strong and independent Vietnam, while the US wants a deeper military relationship with Vietnam and wants to expand the partnership with Vietnam and work to advance shared interests. Furthermore, Hegseth announced that the US military carried out another ‘lethal kinetic strike’ on a vessel in the Caribbean.
South Korean President Lee said they will aid US President Trump to play a peacemaker role on North Korea.
China criticised Japanese PM Takaichi for meeting with Taiwanese officials on the sidelines of APEC.
Philippines signed a military pact with Canada as the former seeks to build a coalition of allies to deter China's aggression in the South China Sea.

CRYPTO

Bitcoin is on the backfoot and is now down to USD 107k, with Ethereum also slipping to around USD 3.7k.

APAC TRADE

APAC stocks trade mostly higher despite a lack of fresh major macro developments over the weekend and with thinned conditions as Japanese markets were shut for a holiday.
ASX 200 lacked conviction as gains in tech, energy and financials were offset by weakness in healthcare, real estate and miners, while the RBA also began its two-day policy meeting, where the central bank is unanimously forecast to maintain its Cash Rate at 2.60%.
KOSPI rallied to a fresh all-time high amid tech strength with notable gains in SK Hynix and Samsung Electronics, while South Korea and China reportedly signed 7 MOUs and agreed to cooperate on stabilising supply chains.
Hang Seng and Shanghai Comp were ultimately higher although price action in the mainland was choppy with risk sentiment flimsy as participants digested disappointing Chinese RatingDog Manufacturing PMI data.

NOTABLE ASIA-PAC HEADLINES

Hong Kong’s Financial Secretary Chan said the city is set to achieve its annual target of 2%-3% for 2025 and noted that the economy grew 3.8% in Q3, which was the fastest pace of growth since Q4 2023.
South Korea and Singapore agreed to cooperate on defence technology and signed an MOU on AI and green shipping, according to Korea’s presidential office.
RBNZ 2025 stress test results noted that large banks are well placed to withstand the solvency and liquidity impact of a severe scenario caused by worsening geopolitical risks.

DATA RECAP

Chinese RatingDog Manufacturing PMI Final (Oct) 50.6 vs. Exp. 50.9 (Prev. 51.2)
Australian Building Approvals (Sep) 12.0% vs. Exp. 5.0% (Prev. -6.0%, Rev. -3.6%)