► In Europe, the Stoxx 600 index dropped up by 0.2%. Over in the UK, the GBP was able to move higher, backed by data revealing a tenacious labor market. France's composite PMI rose to 45.30 points in October (still deep in contraction territory = below 50), outpacing consensus, but its manufacturing PMI dipped below anticipated levels. European stocks received support from strong Hermes earnings. Sales rose by around 16% at constant exchange rates in the third quarter, Hermes International reported on Tuesday. Analysts had expected an increase of 13%. Growth in the Americas exceeded estimates, while performance in Asia Pacific excluding Japan was in line with expectations.
► In the US, equity futures are trading positively in pre-market trading after a mixed session. The Nasdaq is up 0.40%, the S&P 500 and Dow Jones are also trading slightly higher (+0.15% – +0.3%). We saw a massive 3.84% jump with Nvidia on Monday after the chip giant announced to make Arm-based PC chips – Intel (-3.06%) & AMD (-1.77%) lost sharply on the news. Investor attention is now sharply focused on forthcoming tech giant earnings, notably Alphabet and Microsoft. The market is expecting very strong earnings from Big Tech which opens room for disappointment.
► The 10-year Treasury yield retreated, shedding four basis points and settling at around 4.81%, following a high not witnessed since 2007. This descent in yields is likely a rebound, catalyzed by market bear warnings of an economic deceleration. This has increased expectations of the Federal Reserve dialing down on interest rates. The economic resilience combined with surges in government issuance and geopolitics makes the future trajectory of the Federal Reserve's rate hikes uncertain. Market’s await the US GDP and inflation metrics due this week to help shape the outlook on the current monetary policy.
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