Volatility coming – UK Rates incoming
Data
– Global equities corrected sharply, as valuation concerns triggered a broad selloff across Asia and Europe. Japan’s Nikkei 225 −4.6 %, South Korea’s KOSPI −6.2 %, and the MSCI Asia-Pacific −1.2 % over two sessions — the steepest regional decline since April.
– Risk-off sentiment dominated: U.S. equity futures weakened (S&P 500 −1.09 %, Nasdaq 100 −1.37 %) as traders digested warnings from top Wall Street executives about stretched valuations.
– Safe-haven demand rose: the Japanese yen (+0.5 %) and Swiss franc (+0.3 %) firmed intraday, while the U.S. Dollar Index (DXY) climbed to 100.2, its highest in three months, as risk appetite faded.
– Oil prices retreated: Brent crude −1.5 % to US$ 64.38 / bbl, WTI −1.4 % to US$ 60.46 / bbl, pressured by rising inventories and the global equity selloff, despite OPEC+ confirming its production freeze through Q1 2026.
– Gold held near US$ 3 940 / oz, down −0.3 %, stabilizing after prior session losses as safe-haven flows partially offset dollar strength.
– Nigeria launched a US$ 2.25 billion Eurobond sale, split across 10-year (9.125 %) and 20-year (9.625 %) tranches — underscoring resilient investor appetite for high-yield emerging market debt.
– U.S. Dollar and Treasury yields rose modestly, with the 10-year at 4.06 %, while traders reduced odds of another Fed cut below 25 % amid prolonged U.S. government shutdown uncertainty.
– Technology stocks led the downturn, with AI and semiconductor shares under heavy pressure as investors reassessed inflated multiples following last month’s rally.
– Retail brokerage Robinhood Markets reported Q3 net profit of US$ 556 million (US$ 0.61 / share) — nearly quadrupling YoY — as retail options and crypto trading volumes surged.
– European equities extended declines: the STOXX 600 −1.4 % to 564.26, led by autos and industrials, with mixed corporate results deepening the risk-off tone.
– Investors turned cautious ahead of the U.S. Supreme Court tariff-legality hearing and lack of macro data due to the ongoing shutdown — both adding to volatility across global assets.
– Analysts noted that the pullback, following October’s record bond rally, signaled the first “true correction risk” since Q2, with stretched valuations and fading liquidity as key vulnerabilities.
Companies.
+) Global equities plunged as investors fled high-valuation technology names following warnings of an “AI bubble correction.” The Nikkei 225 sank –4.6%, KOSPI –6.2%, and Hang Seng –3.1%, marking one of the steepest global sell-offs since early 2023.
+) In Europe, the STOXX 600 fell –1.4%, led by heavy declines in semiconductor and software sectors, while defensive shares (utilities, healthcare) saw inflows.
+) U.S. futures pointed to a softer open, with Nasdaq 100 –0.5% pre-market, as investors digested stretched valuations and mixed Q3 earnings from major tech names.
+) The U.S. Dollar Index advanced to 99.8, while 10-year Treasury yields eased to 4.02% as safe-haven demand increased.
+) Gold rebounded above US$ 4,020/oz, while Brent crude dipped to US$ 64.8/bbl amid softer demand signals and rising global inventories.
+) AI and semiconductor stocks led losses globally — Nvidia, Palantir, AMD, and ASML each dropped over 5%, reflecting broad de-risking across growth assets.
+) European bank CEOs from Deutsche Bank and SocGen expressed caution on leverage in speculative tech exposures, warning of possible volatility spillovers.
+) Credit spreads widened by ~8 bps globally, while derivatives traders ramped up hedging activity via Nasdaq-linked options; the VIX Index spiked to 19.3.
+) The prolonged U.S. government shutdown continued to cloud macro visibility, limiting official economic data releases ahead of next week’s CPI report.
+) Market attention is now turning to Disney, Uber, and Moderna earnings as investors assess whether corporate resilience can offset the valuation-driven correction.
| Company | Highlights | Key Metrics / Notes |
| Walt Disney Co. (DIS) | Beat profit estimates on strong theme park and streaming results; guided FY26 streaming profitability. | Revenue: US$ 23.7 bn (+7% YoY). EPS: US$ 1.28 (vs 1.19 est). Disney+ subs: 162 m (+4.5 m). |
| Uber Technologies Inc. (UBER) | First profitable year forecast; strong mobility and delivery segments drove margin expansion. | Revenue: US$ 10.9 bn (+16% YoY). Adj. EBITDA: US$ 1.4 bn. Net Income: US$ 92 m. |
| Moderna Inc. (MRNA) | Narrower loss than expected, with COVID and RSV vaccine revenue outperforming; positive early oncology trial data. | Revenue: US$ 2.2 bn (vs 1.9 bn est). EPS: –US$ 0.73 (vs –1.15 est). |
| Airbnb Inc. (ABNB) | Reported record bookings but warned of slowing Q4 growth due to softening European travel demand. | Revenue: US$ 3.7 bn (+14% YoY). EPS: US$ 1.84 (vs 1.75 est). Bookings: 120 m nights. |
| PayPal Holdings Inc. (PYPL) | Posted in-line results; payment volumes solid but operating margins compressed on cost investments. | Revenue: US$ 7.6 bn (+8% YoY). EPS: US$ 1.40 (vs 1.38 est). TPV: US$ 410 bn (+12%). |
| CVS Health Corp. (CVS) | Surpassed earnings expectations on retail pharmacy growth and Medicare advantage performance. | Revenue: US$ 91.3 bn (+11% YoY). EPS: US$ 2.25 (vs 2.10 est). |
| Fortinet Inc. (FTNT) | Reported strong Q3 results, with record cybersecurity demand across enterprise and public sectors. | Revenue: US$ 1.57 bn (+14% YoY). EPS: US$ 0.44 (vs 0.38 est). Billings: +18% YoY. |
| Electronic Arts (EA) | Posted softer Q3 results; EA Sports and Apex Legends growth offset by weaker mobile segment. | Revenue: US$ 2.28 bn (vs 2.31 est). EPS: US$ 1.03 (vs 1.07 est). |
General
Global equities tumble as AI-led rally unravels and valuation fears resurface
Global stock markets saw sharp declines as investors rotated out of overvalued technology shares following weeks of relentless gains. The Nikkei 225 plunged 4.6%, Kospi lost 6.2%, and the Nasdaq 100 fell more than 2%, erasing part of its October advance. Analysts attributed the correction to stretched valuations, excessive positioning in AI-related equities, and profit-taking after a record run in tech megacaps.
Safe-haven demand rises as investors flee risk assets
The Japanese yen and Swiss franc strengthened sharply amid risk aversion, while the U.S. dollar stayed firm on higher Treasury yields and reduced expectations for further Fed easing. Investors moved into short-duration bonds and gold, seeking protection from equity volatility and uncertainty over the U.S. fiscal outlook.
Dollar hits multi-month highs as markets scale back Fed cut bets
The U.S. Dollar Index (DXY) extended its advance to 99.6, the highest level in nearly four months, supported by a hawkish Federal Reserve tone and stronger-than-expected private employment data. The shift in rate expectations weighed on emerging-market currencies, particularly the Korean won and Taiwan dollar, which both fell over 1%.
Bond markets rally as yields retreat amid flight to safety
Global bond yields declined as investors sought safer assets following the equity sell-off. The U.S. 10-year Treasury yield fell to 3.97%, while German bund yields dropped to 1.93%, marking their largest one-day fall in over a month. Market participants described the move as a “classic risk-off rotation” driven by portfolio hedging rather than fundamental deterioration.
AI and tech sector face reality check after months of exuberance
The sell-off in AI-focused equities triggered wider risk repricing, as companies like Nvidia, AMD, and Alphabet experienced sharp intraday drops. Analysts described the correction as “healthy but overdue,” highlighting growing investor anxiety about earnings concentration and capital intensity in the AI sector. Despite strong demand signals, investors are now reassessing valuations amid rising funding costs.
China intensifies push for domestic chip independence, raising global supply-chain risks
Beijing issued new directives requiring state-funded data centers to prioritize locally produced AI semiconductors, escalating efforts toward technological self-reliance. The policy could disrupt global semiconductor supply chains and increase short-term costs for multinational firms operating in China. Markets interpreted the move as both strategic and defensive amid ongoing U.S. trade restrictions.
Upcoming News
Thursday’s session is poised to be one of the most consequential of the week as two major central banks — the Bank of England (BoE) and the European Central Bank (ECB) — take center stage amid a shifting global monetary landscape. After the Federal Reserve’s dovish pivot last week, investors are watching closely to see whether other major central banks begin to align with a synchronized easing cycle. The BoE is widely expected to hold its benchmark rate steady, but Governor Andrew Bailey’s tone during the press conference will be critical. Any indication that policymakers are preparing to lower rates in early 2026 could trigger a pullback in gilt yields and renewed downward pressure on the pound.
Across the Eurozone, focus turns to retail sales data and remarks from ECB officials, which will help gauge whether the recent stabilization in PMIs and cooling inflation is enough to justify delaying policy easing. While headline inflation has softened near 2.5%, sluggish growth continues to weigh on sentiment, prompting traders to increase bets on a mid-2026 rate cut. Meanwhile, early U.S. jobless claims and productivity figures will offer directional cues ahead of Friday’s Canadian labour-market report, particularly as markets continue to rely on private indicators in lieu of official data during the ongoing government shutdown.
In Asia, trading is subdued following China’s stable foreign-reserve data and Japan’s household-spending results earlier in the week. Regional currencies remain sensitive to yield differentials as global bond markets adjust to the Fed’s new easing bias. With commodities holding firm and equities showing renewed strength, Thursday’s trading tone leans cautiously constructive — anchored by policy signals from London and Frankfurt that could confirm a broader global pivot toward monetary accommodation.
| Region / Country | Event / Indicator | Expected Impact |
| 🇬🇧 United Kingdom | Bank of England Rate Decision & Press Conference | 🔴 High — tone on inflation and 2026 policy path will guide GBP and gilts |
| 🇪🇺 Eurozone | Retail Sales (Sep) | 🟠 Medium — consumer demand gauge shaping ECB outlook |
| 🇪🇺 Eurozone | ECB Officials’ Remarks | 🔴 High — potential confirmation of synchronized global easing |
| 🇺🇸 United States | Initial Jobless Claims (Weekly) | 🟠 Medium — real-time labour indicator amid official data delay |
| 🇺🇸 United States | Nonfarm Productivity (Q3) | 🟠 Medium — insight into inflation-adjusted growth trend |
| 🇨🇦 Canada | Building Permits (Sep) | 🟡 Low–Medium — construction activity precursor to jobs data |
| 🌍 Global | G7 Monetary & Fiscal Policy Commentary | 🔴 High — tone-setting for post-Fed coordination narrative |
G7 – Index (NQ + ES + DJ) – Gold – (BTC + ETH)
G7 FX
The U.S. Dollar Index (DXY) briefly touched the 100.0 mark before retreating to 99.7, as investors shifted toward safe-haven currencies amid a global equity sell-off. The yen and Swiss franc outperformed sharply, while high-beta currencies such as the Australian and New Zealand dollars extended losses.
- USD/JPY: fell to 5, its largest one-day drop in over a month, as traders sought safety amid surging global volatility.
- EUR/USD: traded steady near 150, with short-covering offsetting dollar strength.
- GBP/USD: eased modestly to 303, weighed by soft services PMI data and continued fiscal caution.
- AUD/USD: slid to 651, pressured by risk-off flows and weaker iron-ore prices.
- USD/CHF: declined to 860, reflecting broad haven demand for the franc.
Analysis:
Safe-haven dynamics dominated the FX landscape. The yen and franc benefited from deleveraging and equity liquidation, while the dollar’s rally paused after a three-week climb. The euro and pound remained range-bound, underpinned by short-covering but capped by poor growth data.
Metals
Precious metals regained momentum as yields fell and defensive sentiment returned, while industrial metals came under renewed pressure.
- Gold: +0.9 % → US$ 3,970/oz, rising back toward the $4,000 psychological level.
- Silver: +0.7 % → US$ 47.1/oz, following gold’s move.
- Copper: –1.2 % → US$ 10,890/ton, extending losses as demand outlook dimmed on weaker global growth sentiment.
Analysis:
Gold’s rebound underscores its renewed hedge appeal as global risk aversion resurged. The metal remains well-supported above $3,950, with resistance seen at $4,030. Industrial metals continued to track global macro weakness, though persistent supply constraints limited downside risks.
Global Equities (NQ / S&P 500 / DJ / Nikkei 225 / FTSE 100)
Global equity markets plunged as valuation concerns triggered widespread risk reduction.
- S&P 500: –1.9 % → 6,730, its steepest daily loss in five weeks.
- Nasdaq 100: –2.3 % → 22,400, pressured by a sharp unwinding in AI and semiconductor stocks.
- Dow Jones: –1.5 % → 45,950, dragged by energy and industrials.
- Nikkei 225: –2.8 % → 49,460, as foreign investors booked profits following record highs.
- FTSE 100: –1.1 % → 9,590, weighed by banking and mining losses.
Analysis:
The correction in equities reflected exhaustion in the AI-led rally and stretched valuations across major indices. Volatility spiked to a two-month high, prompting renewed hedging. While macro fundamentals remain stable, liquidity thinning ahead of U.S. inflation data fueled short-term volatility.
Crypto Markets
Cryptocurrencies extended declines, tracking the equity rout and broader deleveraging across risk assets.
- Bitcoin (BTC): –4.8 % → US$ 98,500, breaking below the $100,000 psychological level for the first time since July.
- Ethereum (ETH): –6.1 % → US$ 3,420, marking its weakest close in six weeks.
- Altcoins: fell 5–8 % on average, with total crypto market capitalization slipping to US$ 3.25 trillion.
Analysis:
Crypto assets mirrored high-beta equity behavior, suffering from liquidity withdrawals and fading ETF inflows. While long-term on-chain activity remains resilient, near-term sentiment remains bearish amid persistent dollar strength and global deleveraging.
This report is provided to The Concept Trading from Van Hung Nguyen
