📈Morning Wrap: Tech Bounce and Oil Price Collapse Following Signals of De-escalation Around Iran

• Wall Street recorded its best session since April (cash S&P 500 rose by 2.3%, and Nasdaq 100 by 3.4%), driven by buyers returning to the chip sector (+6.9%) and a sharp sell-off in the oil market.

• Oil prices plummeted (Brent yesterday -5.85% to around 92.5 USD/b, WTI -4.38% to 86.8 USD/b) following Donald Trump's statement that strikes on Iran are "highly unlikely," alongside reports of a potential nuclear deal and the unblocking of the Strait of Hormuz.

• On the other hand, some sources in Iran indicate that no talks are taking place.

• Chinese exports in October surged by 35.2% y/y in dollar terms due to relentless demand for AI hardware, allowing China's full-year trade surplus to cross one trillion dollars a month faster than last year.

🇺🇸 Wall Street: How did the session end?

• Monday's session brought a massive rebound after earlier declines: the S&P 500 gained 2.3%, the Nasdaq rose by 2.7% (Nasdaq 100 up by 3.4%), and the Dow Jones added over 400 points; the main driver was bargain hunting in semiconductor stocks and falling energy prices reducing inflationary pressure.
• Current futures quotes on the XTB platform indicate a calming of sentiment: US500 is up 0.14% around 7,591 pts, US100 is slightly correcting down 0.16% around 28,027 pts, US30 is up 0.34% to around 52,692 pts, and small-cap stocks from Russell 2000 (US2000) are gaining 0.25%, hovering near 2,854 pts.
• The market fear index, VIX, dropped 1.85% yesterday to 19.66 pts (down by nearly 17% week-on-week), signaling a return of capital to risk assets.

🌏 Asia

• Stock markets in the Asia-Pacific region continued their technical rebound: South Korea's KOSPI rose up to 3.7% during the session near 5,200 pts (Samsung Electronics gained over 4%, and SK Hynix nearly 6%), while Japan's Nikkei 225 surged up to 2.4%, approaching the 61,000 pts mark led by SoftBank, Tokyo Electron, and Kioxia.
• Towards the end of the session, momentum cooled slightly: Nikkei 225 futures (JP225) are down 0.29% this morning near 60,772 pts, Hang Seng (HK.cash) is up 0.25% around 24,568 pts, Australia's ASX 200 (AU200.cash) is gaining 0.25% to around 9,132 pts, and China's China A50 (CH50cash) is down 0.98% to 12,884 pts.
• Behind the positive momentum was a recovery from the sell-off in the artificial intelligence sector (the market viewed Friday's crash as position trimming rather than a bubble burst) and relief in the oil market; however, resistance to further gains emerged in mainland China amid growing concerns over new trade frictions with the US.

🇪🇺 Europe before the open

• Morning futures quotes on European indices indicate a positive start to trading: the DAX (DE40) is up 0.28% near 26,589 pts, the Euro Stoxx 50 (EU50) is gaining 0.27% to 6,353 pts, and the UK's FTSE 100 (UK100) is noting a 0.17% gain around 10,864 pts.
• The French CAC 40 (FRA40) is catching up with yesterday afternoon's gains on Wall Street, rising 1.98% to around 8,280 pts.
• The European volatility index VSTOXX plummeted by 14.56% to 18.48 pts, reflecting a significant easing of fears over an escalation of the Middle East conflict.

💱 Currencies and Commodities

• Crude Oil: Following yesterday's slump, quotes are stabilizing at lower levels – Brent crude (OIL) is trading around 91.79 USD/b (-0.41% this morning, -6.1% week-on-week), while WTI (OIL.WTI) is hovering around 86.08 USD/b (-0.31% this morning, -4.7% week-on-week).
• The sell-off is a direct reaction to the softening tone of the US towards Iran and speculation surrounding the unblocking of the Strait of Hormuz.
• At the same time, however, some sources in Iran indicate that no talks are currently being held.
• Precious Metals: Gold (GOLD) is correcting slightly down 0.45% near 4,120.66 USD per ounce, while silver (SILVER) is pulling back 0.32% to around 53.18 USD per ounce due to capital outflow to riskier assets following the reduction in geopolitical tensions.
• Currencies: The FX market is waiting in tight ranges for the US CPI report – EURUSD is rising marginally by 0.03% to 1.1222, GBPUSD is gaining 0.07% to 1.3445, and USDJPY is up 0.11% near 158.05 (yen remains under pressure from weak household consumption data in Japan). The Polish Zloty is stable – USDPLN is trading near 3.9064 (-0.01%).

📊 Macroeconomics: What data did we learn?

• China – October Trade Balance: Dollar-denominated exports surged by 35.2% y/y against expected 33.5% y/y, driven by AI hardware demand; imports rose by 41.6% y/y. The monthly trade surplus came in at 105.28 billion USD (consensus: 126.5 billion USD; in yuan: 712.78 billion CNY vs 855 billion CNY forecast). Total surplus year-to-date crossed a record one trillion dollars.
• Japan – September Household Spending: Deep disappointment with a reading of -6.8% y/y (consensus: -3.1%, previous: -3.1%) and -2.8% m/m (forecast: +0.3%), marking the 10th consecutive month of decline and confirming severe weakness in Japanese consumer spending.
• Australia – Consumer and Business Confidence: Westpac Consumer Sentiment index for November fell 2.7% m/m to 78.2 pts (a four-year low) following rate hikes by the RBA to 4.85%. Meanwhile, the NAB Business Conditions index dropped in October to -2 pts (lowest since 2020), and business confidence weakened to -15 pts.
• United Kingdom – BRC Retail Sales for October: Like-for-like sales grew by 1.1% y/y (forecast: 1.2%), while total sales increased by 1.5% y/y (strongest reading since June).

🔑 Key Information overnight

• Rapprochement between Washington and Tehran: Donald Trump announced on Truth Social that after talking with the Prime Minister of Qatar, he considers military strikes on Iran "highly unlikely" and that Gulf allies prefer the status quo. Reports from Al Arabiya point to an outline of an agreement providing for the unblocking of the Strait of Hormuz in exchange for allowing Iranian uranium enrichment up to 3.67% and unfreezing 6-9 billion USD of frozen Tehran assets (despite Iranian authorities officially demanding unconditional fulfillment of their 7 conditions).
• Hawkish tone in Bank of Japan (BoJ) Summary of Opinions: Some board members called for faster rate hikes towards a neutral rate level, which according to one policymaker sits "significantly above 1%". The market maintains high pricing for a rate hike to 1.50% at the December meeting.
• AI Sector shadowed by Anthropic IPO and regulations: Anthropic raised 26 billion USD from tech giants (including Google, Nvidia, Microsoft, TSMC) via a private placement at IPO pricing and unveiled its Mythos 5.2 and Fable 5.2 models, though it had to retract erroneous pricing parameters (70-80 USD per share) sent to bankers. Meanwhile, the Australian Prime Minister announced the creation of a new regulator and mandatory reporting of AI safety incidents following a data leak from Medicare.
• Investigation surrounding Nvidia chief: Donald Trump confirmed he spoke with Nvidia CEO Jensen Huang, adding that the FBI is investigating potential leaks and connections with a suspected Chinese spy, while House Democratic Leader Jeffries called for further tightening chip sanctions.

📅 What lies ahead today?

• 09:30 | United Kingdom – Speech by Sarah Breeden from BoE.
• 10:00 | USA – Speech by Christopher Waller from the Fed (crucial for expectations ahead of the December meeting).
• 12:00 | USA – NFIB Small Business Optimism Index for October (consensus: 98.0 pts vs 97.9 pts previous).
• 14:15 | USA – Weekly ADP Employment Report (previous: 16.8k).
• 14:30 | USA – CPI Inflation Report for October: consensus expects headline index growth of 0.3% m/m (previous 0.6%) and Core CPI at 0.2% m/m (previous 0.3%). Due to last year's government shutdown, the BLS will not publish official annual figures (y/y).
• 16:50 – 21:30 | USA – Speeches by additional FOMC members: Logan (16:50), Schmid (19:30), and Bowman (21:30).
• 19:30 | Canada – Bank of Canada (BOC) Summary of Deliberations.

🔎 Suggested to watch

• Brent Crude (OIL) — a sharp sell-off of over 6% week-on-week brought quotes into oversold territory on short-term indicators (RSI at 34.5, 1-year Z-score Z1R +0.31, Z5L +0.61 at the 5-year 75th percentile), while the market is shaken by conflicting reports of a truce with Iran and incidents in the Black Sea and the Strait of Hormuz.
• DAX 40 (DE40) — the index is in an extreme multi-year overbought zone (5-year percentile at 99.8%, 5-year Z-score Z5L +1.74, and Z1R reaching +1.86 with RSI at 59.7), which after a 3.25% weekly gain creates an elevated risk of profit-taking in the event of a higher US inflation reading.
• Japanese Yen (USDJPY) — the rate hovers around 158.00, entering an area of extreme yen weakness (5-year Z-score Z5L +1.99, 5-year percentile 97.0%, Z1R +1.01), where hawkish BoJ minutes clash with a dramatic drop in Japanese household spending (-6.8% y/y) and anticipation of US CPI.
• NASDAQ 100 (US100) — the main beneficiary of yesterday's rally (+3.4% on Monday), whose valuation cooled down in recent weeks (RSI at 41.1, 1-year Z-score Z1R stands at just +0.16, and Z5L fell m/m by 0.56 to +1.55); the contract will be under direct influence from today's CPI inflation reading as well as news surrounding Nvidia and Anthropic's debut.