Macro Update
Asian markets recover ahead of Apple earnings: South Korean shares climbed 2.6% after losing 16% in October, while Japan’s Nikkei added 0.3% and China’s CSI 300 rose 1.3% on reports that regulators would meet financial institutions to discuss support for capital markets. S&P 500 futures gained 0.5% and Nasdaq futures rose 0.9%, following the Nasdaq’s near 7% October decline, its worst month since April 2025. Apple is expected to report quarterly earnings per share of $2 on revenue of $113bn.
AI investment boom raises questions over future growth: Goldman Sachs expects hyperscaler capital expenditure to nearly double to $800bn this year and reach $1.2tn in 2027, while forecasting S&P 500 earnings growth to slow from almost 30% in 2026 to 18% next year. Intel’s near 29% plunge on Friday heightened pressure on other chipmakers, while Tuesday’s US midterm elections added uncertainty, with a Democratic victory in either chamber potentially creating obstacles for data centre development.
Oil prices slide on hopes of Iran peace deal: Brent crude dropped 3.3% to $109.70 a barrel, while US crude fell 3.4% to $100.58 as Iranian and Qatari officials held a third consecutive day of talks in Doha aimed at ending the US-Israeli war on Iran. The pullback followed October’s 13.6% surge, with tanker attacks in the Gulf continuing and OPEC+ leaving December production targets unchanged.
Gold rebounds after falling below $4,000: Bullion rose 0.9% to $3,911 an ounce as easing oil prices helped temper inflation concerns, recovering slightly after Friday’s 3.5% plunge took it below $4,000 for the first time since October 2025. Silver also advanced, gaining 1.8% to $49.97 an ounce.
Markets scale back expectations for Fed tightening: Futures indicated a 72% probability of a quarter-point Federal Reserve rate increase in December, although total tightening priced in had fallen to 55 basis points from more than 70 basis points a month earlier. The 10-year Treasury yield held at 4.931%, well below October’s peak of 5.3645%, while investors anticipated rate increases from the Reserve Bank of Australia, Bank of England and Riksbank this week.
Euro remains under pressure as currencies await US vote: The euro hovered near a 17-month low of $1.1182 after Fitch revised France’s outlook to negative, while the dollar index slipped 0.15% to 101.83 and the yen traded at 157.73 per dollar. Bitcoin edged 0.6% higher to $78,263 as Binance recorded $3.64bn in withdrawals after restoring services following a record $6.3bn hack attributed to North Korea.
