Closing Recap

U.S. stock futures indicate a positive open, building on Friday’s rebound as investors embrace signs of U.S.-China trade de-escalation and await the start of a heavy earnings week; gold is easing, oil is down, and the dollar is subdued amid ongoing government shutdown concerns. In the currency markets, the Japanese Yen is seeing significant volatility as a new coalition government is formed in Tokyo, while the Euro is under pressure from political turmoil in France and a sovereign credit downgrade, and the British Pound is range-bound. Bitcoin, meanwhile, has rebounded to above $110,000. 

Key Takeaways 

• Futures Point Higher on Trade Hopes: Equities are set for a positive start (S&P futures +0.2%) after President Trump appeared optimistic on a China deal and officials signaled talks would continue, easing immediate tariff fears. 
• Government Shutdown Enters Fourth Week: The U.S. government shutdown is now in its 20th day, raising concerns about its economic impact and delaying key data, which is keeping a lid on the U.S. dollar. 
• Heavy Earnings Week Ahead: Investor focus shifts to Q3 earnings, with major reports from Netflix, Coca-Cola, Tesla, and Intel on deck. 
• Gold Eases from Highs: Gold prices are pulling back from recent record highs as immediate trade fears recede, though underlying support remains from dovish Fed bets and shutdown uncertainty. 
• Dollar Holds Firm Amid Global Uncertainty: The Japanese Yen is volatile, with USD/JPY gapping lower before reversing higher as Japan’s new pro-stimulus Prime Minister is confirmed, while the Euro is pressured by a French credit downgrade and the British Pound is quiet. 
• Bitcoin sharp bounce: Bitcoin has rebounded to above $110,000, driven by the improved risk sentiment from easing U.S.-China trade tensions. 
• Oil Prices Weaken: Crude oil prices are trading lower as the market weighs the demand implications of mixed Chinese GDP data. 
• Yields Rebound: Treasury yields bounced back on Friday after dropping to key support levels earlier in the week, as a combination of decent regional bank earnings and softer trade rhetoric soothed sentiment. 

Market Overview

It was a weekend of high drama that has completely reset the market narrative. Friday’s trading session was a volatile affair, with stocks initially rallying before succumbing to a sell-off sparked by renewed credit concerns at regional banks. U.S. equity markets are poised for a positive start to the week, with futures pointing to gains as investors focus on an apparent de-escalation in the U.S.-China trade war. Sentiment improved significantly late last week after President Trump expressed optimism about a potential trade deal ahead of his meeting with Chinese President Xi, and Treasury Secretary Scott Bessent confirmed that talks would continue. This has led traders to believe that Trump’s threat of an additional 100% tariff on Chinese goods beginning November 1st may be averted, sparking a rebound in risk assets. 

Index	Up/Down	% Change	Last
DJ Industrials	238.37	0.0052	46190.61
S&P 500	34.94	0.0053	6664.01
Nasdaq	117.44	0.0052	22679.97

This trade optimism is helping to offset persistent concerns about the U.S. government shutdown, which is now entering its fourth week. The prolonged shutdown is raising worries about its impact on GDP growth and is delaying the release of critical economic data, including this Friday’s CPI report. In the background, political turmoil in Japan and France is creating significant moves in the currency markets. Japan has confirmed a new coalition government, paving the way for a pro-stimulus Prime Minister, while in France, a recent credit downgrade by S&P is weighing on the Euro. 

The market now enters a crucial week, where the focus will shift from the data vacuum created by the government shutdown (now on Day 20) to the start of Q3 earnings season (several large-cap companies, including Netflix and Tesla) and a key CPI inflation report.

Economic Calendar

The U.S. economic calendar is bare today. The focus remains on Q3 earnings and any developments regarding the government shutdown. Key risk events this week: 

• U.S. Government Shutdown ongoing. 
• Q3 Earnings Season: Reports from Netflix, Coca-Cola, Tesla, Intel. 
• U.S. September CPI (Friday – Release is contingent on government reopening).

Overnight data from China and New Zealand has set the tone for their respective currencies: 

• China Q3 GDP: Grew at 5.2% year-over-year for the first three quarters, keeping Beijing on track to meet its annual growth target. 
• New Zealand Q3 CPI: Reaccelerated to 3.0% year-over-year, hitting the upper bound of the RBNZ’s target range and creating a policy headache for the central bank.
• Central Bank Speakers: A couple of ECB speakers are on the docket, including the hawkish Isabel Schnabel.

Commodities, Treasuries and Currencies 

Gold prices are trading lower, with spot gold around $4,245 per ounce, as the improved risk sentiment from easing U.S.-China trade tensions reduces demand for safe-haven assets. Silver has also stabilized above $52 after a recent sharp correction. Crude oil prices are trading lower, with WTI down near $56.82/bbl, pressured by mixed Chinese GDP data that highlighted a persistent drag from the property sector.

Asset	Up/Down	Unit / % Change	Last
WTI Crude	-0.52	USD/bbl	57.02
Brent	(Not provided)	USD/bbl
Gold	(Not provided)	USD/oz	4245
EUR/USD	0.0001	USD	1.1656
USD/JPY	0.09	JPY	150.72
10-Year Note	0.012	%	0.04026
Dollar Index	0.08	Points	98.51

In the currency markets, the Japanese Yen is seeing significant volatility. The USD/JPY pair initially gapped lower on the confirmation of Japan’s new coalition government but then reversed sharply higher as the new Prime Minister, a known fiscal dove, is expected to keep the Bank of Japan in an accommodative stance. The Euro is under pressure, trading around 1.1660, following a sovereign credit downgrade for France by S&P. 

• EUR/USD: The pair is struggling for direction, trading weakly around 1.1660. The Euro is being weighed down by the S&P credit rating downgrade for France and the ongoing political turmoil, which is creating significant budget uncertainty. 
• GBP/USD: Sterling is trading on a subdued note above the 1.3400 level. The pair is caught between a weaker U.S. dollar and dovish expectations for the Bank of England, creating a mixed and uncertain backdrop. 
• USD/JPY: The pair is trading with a firmer tone near 150.70. The formal confirmation of a pro-stimulus coalition government in Japan is weighing on the Yen, though a large $1.3B options expiry at the 150.00 level could act as a magnet and limit downside for the pair today.

U.S. Treasury yields rebounded on Friday as risk sentiment improved, with the 10-year yield moving back above 4.026%. After a brutal weekend that saw a massive liquidation event, Bitcoin is rebounding, climbing 3.5% to retake the $110,000 level, driven by the improved risk sentiment from easing U.S.-China trade tensions.

Looking Ahead 

The market will be entirely driven by Q3 earnings reports this week, particularly from major tech names like Netflix and Tesla. Any guidance from these companies on the impact of trade tensions and the economic outlook will be critical. The primary macro focus remains on the U.S. government shutdown and any progress toward a resolution. With official U.S. data still on hold, commentary from the numerous Fed speakers on the calendar this week will also be closely watched for any shifts in monetary policy expectations. What to watch: 

• The “Trump Trade” Reversal: The entire market is currently trading on the hope that Trump will walk back his tariff threats. Any new headlines or social media posts that either confirm or contradict this narrative will be the primary driver of volatility. 
• Japan’s New Government: With Sanae Takaichi now confirmed as the incoming Prime Minister, traders will be watching for any details on her fiscal stimulus plans and what it means for the Bank of Japan’s policy path. 
• Earnings and CPI are Key: This week’s main events will be the start of Q3 earnings season (Netflix, Tesla, Intel) and Friday’s crucial CPI inflation report, which will be the market’s first look at official U.S. inflation data in weeks. 
• Crypto’s Post-Crash Environment: The massive liquidation event has reset the crypto market. Traders will be watching to see if the rebound has legs or if the on-chain signs of declining network usage point to a more prolonged period of consolidation and weakness.