► Tensions in the Middle East remain in focus. While Israel halted its ground offensive in Gaza, efforts continued to secure the release of more hostages. The situation has eased somewhat after Hamas released two U.S. hostages and aid is flowing across the Egyptian border into Gaza. However, the temporary calm could be disrupted if Israel intensifies its airstrikes on Gaza to prepare for further phases of conflict and warn of a wider regional conflict with Lebanon.
► Stocks in Europe saw a drop, with the Europe’s Stoxx 600 falling ~0.4% – pressured from a series of negative earnings report. Volkswagen AG retreated almost 3% after preliminary earnings missed expectations and Royal Philips NV lost 4% after reporting a drop in order intake. British house-building giant Vistry Group tumbled after announcing hundreds of job cuts. Investors in Europe await several pieces of economic information this week, most notably the ECB rate decision on Oct 26.
► In the U.S., the stock markets were also affected: Futures on the major indices are 0.2% lower in pre-market trading. This comes ahead of the release of earnings reports this week from major technology companies such as Google, Microsoft, Meta and Amazon. Although Monday is off to a slow start with no major U.S. earnings reports being released. The 10-year Treasury bond yield also rose above the key 5.000% level – it is currently at 5.004%, up 8 basis points. Rising Treasury yields and ongoing concerns about persistently high interest rates are influencing global markets. Federal Reserve Bank of Cleveland President Loretta Mester spoke of an end to Fed tightening soon if economic forecasts are confirmed.
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