ASX 200 Live Today - Thursday, 22nd October

The live blog has wrapped up for Thursday, October 22. Thanks for following along, and we’ll be back tomorrow morning. Let us know how we can make it even better.

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New updates

ASX 200 lower as energy and miners lag

[2:00 pm] The S&P/ASX 200 is down 29 pts (-0.34%), with energy and mining stocks leading the declines. The S&P/ASX 200 Energy Index is down 2.2% as Woodside falls 3.1% and Santos drops 1.3% after narrowing its 2026 production guidance on delays at its Pikka project in Alaska. Miners are heading for a third straight session of losses, with the S&P/ASX 200 Materials Index down 1.6%. BHP and Rio Tinto are down more than 1%, while Fortescue is off more than 4.2% after warning its operations may be affected if talks with CMRG drag past year-end.

S&P/ASX 200 sectors (Source: Market Index)

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DeepSeek raises $15bn in one of China’s largest ever funding rounds

[1:48 pm] Chinese AI developer DeepSeek has raised one of the country’s largest ever funding rounds as it prepares for a sharemarket listing and steps up competition with leading US labs.

• DeepSeek raised about 100bn yuan ($15bn), after lifting its target at least twice from an initial 50bn yuan

• CATL and Tencent were among the biggest investors in the round

• The company is preparing for an IPO, which would be one of the most anticipated Chinese market debuts in years

• DeepSeek still has far less funding than Anthropic and OpenAI, which have each raised more than $100bn

• It is spending more aggressively on AI data centres and open-source models for China and overseas markets

• Its September V4.1 Flash release hit shares of local rivals MiniMax and Z.AI

Source: Bloomberg

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WoodMac warns China’s state iron ore buyer could leave other customers as price takers

[1:26 pm] China’s state-backed iron ore buyer is moving from consolidating purchases to shaping how the steelmaking ingredient is priced globally, according to Wood Mackenzie.

• China Mineral Resources Group (CMRG) is shifting from a centralised buyer to a potential force in global price setting, according to Wood Mackenzie

• Japan and other major buyers risk becoming price takers, with costs more sensitive to Chinese port stockpiles, the yuan and the timing of CMRG purchases

• CMRG aims to capture transaction data, steer trading and shape benchmark prices through a state-backed platform

• The group has taken a tougher line with suppliers over the past year, including months-long standoffs with BHP and Fortescue that restricted some sales

Source: Bloomberg

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UBS sticks with November RBA hike call after hawkish Hauser comments

[12:55 pm] UBS says RBA Deputy Governor Andrew Hauser’s latest comments were hawkish, reinforcing its call for another rate rise next month.

• UBS still expects a 25bp hike to 4.85%, most likely in November, though the timing depends on next week’s September quarter CPI

• Hauser said the inflation outlook looks materially worse than the RBA’s August forecasts, with oil prices about a third higher than assumed

• Hauser said the RBA must react when supply shocks are big and persistent and inflation expectations are under challenge, which UBS says reflects current conditions

• UBS forecasts trimmed mean inflation of 1.0% q/q in the September quarter, above the RBA’s implied 0.8%, with headline CPI up 1.2% q/q and 3.9% y/y

• Hauser played down the rise in unemployment to 4.7%, and UBS says his comments imply unemployment may need to rise to 5% or higher to bring inflation back to target

• Even if the RBA holds in November, UBS expects it to keep a tightening bias and set up a hike in December

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NextDC rebounds 6.3% as Macquarie says 42% plunge is overdone

[12:47 pm] Macquarie says NextDC has been oversold after its guidance downgrade, arguing the data centre operator doesn’t need to raise capital despite power delays at its flagship Melbourne site.

• Macquarie retained Outperform but cut its target price 35% to $12.90 from $19.70, still 141% above Wednesday’s $5.35 close

• NextDC does not need to raise capital, with interest cover of 1.67x in Macquarie’s bear case vs a 1.5x lending covenant

• The $143m FY27 EBITDA guidance cut reflects removing an entire 213MW contract at M3 after Jemena paused power network works until at least February 2027

• Guidance excludes about $74m of FY27 EBITDA that Macquarie estimates the 55MW already delivered could contribute

• Macquarie cut EBITDA forecasts by 35% for FY27 and 23% for FY28

• NextDC’s $4.1bn market value sits well below Macquarie’s $9.5bn replacement cost estimate, and pausing growth capex could lift free cash flow yield above 10% by FY31

Company page: NEXTDC (NXT)

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Magellan slides 8% as bond volatility hits Barrenjoey trading revenue

[12:03 pm] Magellan Financial Group shares fell after the newly merged group flagged a weak start to FY27, with volatile global bond markets hitting Barrenjoey’s trading business and higher yields weighing on funds under management.

• Financial Markets revenue was materially lower in the September quarter than the 1H26 run rate, after sharp moves in global bond markets

• AUM fell 8% to $38.0bn in the September quarter, as higher bond yields hit listed infrastructure valuations and outflows

• Corporate Finance activity remains strong, and bond market conditions have largely eased

• Annual merger synergies were upgraded to $15m from $6m on headcount savings, with the full benefit flowing through in FY28

• A new dividend policy targets a 60% to 90% payout of operating profit after tax from FY27, initially at the top end of the range

• Shareholders vote today on renaming the company Barrenjoey Group, with its ASX ticker to change to BJY

Company page: Magellan Financial Group (MFG)

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Nick Scali tumbles 17% as first-half profit guidance falls 20% short of ests

[11:47 am] Nick Scali shares slumped after the furniture retailer flagged a sharp drop in first-half earnings, with weak Australian and New Zealand demand outweighing continued growth in the UK.

• 1H27 underlying NPAT guidance of $28m to $32m implies a 20% miss to $37.6m ests at the $30m midpoint

• ANZ written sales orders fell 15% y/y in the September quarter, compared with 11% growth a year earlier, with store traffic down about 10%

• ANZ first-half revenue is expected to fall 11% to 14% y/y

• UK written sales orders rose 29% y/y, with like-for-like orders up 14%

• An August cyber incident took core systems offline for about three weeks, with about $980k of related costs excluded from underlying profit

• Macquarie cut its target price 14% to $15.20 and FY27 EPS forecasts by 24%, but kept an Outperform rating, citing weaker demand rather than margin pressure

Company page: Nick Scali (NCK)

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ASX to unveil new strategy in 2027 as Attia lays out turnaround roadmap

[11:36 am] New ASX chief executive Anthony Attia used his first AGM to outline how he plans to reset the embattled exchange after years of governance and risk management failures.

• A new strategy will be unveiled at a Capital Markets Day in the first half of 2027, built around themes of fixing, growing and expanding the business

• Fixing means completing the Accelerate Program and technology modernisation to strengthen resilience and governance

• Growth will focus on new products using existing infrastructure, such as bond repo clearing and tokenised collateral

• Attia flagged 24-hour trading and asset tokenisation as global shifts ASX needs to respond to early

• Futures volumes rose 32% y/y in the September quarter, while cash market value traded rose 7%

• FY27 expense growth guidance of 18% to 21% and capex of $180m to $200m were reaffirmed

Company page: ASX (ASX)

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El Niño forces China’s Guangdong back to costly gas as power prices triple

[11:31 am] China’s industrial heartland of Guangdong is turning back to costlier natural gas to meet rising electricity demand after El Niño weather curbed hydro and wind generation.

• Spot electricity prices have more than tripled y/y in October, reaching about 810 yuan (US$121) a megawatt-hour on 18 October, according to Rystad Energy

• Hydropower imports fell 19% m/m to 26 gigawatts in October, and are 28% below August levels, with wind output also lower

• Power usage rose 7.7% y/y in the first nine months of 2026, after hitting a record in August

• Gas makes up about 20% of Guangdong’s power mix, leaving it exposed to LNG supply disruptions from the Gulf war

• Elevated prices are expected to persist through the December quarter as exporters fill Christmas orders, according to Galaxy Futures

• About 60% of the province’s 500 power retailers lost money on trading in the first half, prompting calls to loosen fixed-price contract rules

Source: Bloomberg

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Oil rises as deadly attacks on Saudi oil field and airport fan supply fears

[11:10 am] Oil prices climbed in Asian trade after deadly attacks on a Saudi oil field and airport heightened concerns that escalating Middle East hostilities could disrupt supply.

• Attacks on Saudi Aramco’s Shaybah field and Dammam’s airport killed three people, though operations at the 1m barrel-a-day field were unaffected

• The US ordered non-emergency government staff and their families to leave Saudi Arabia after repeated Houthi strikes on the kingdom’s airports

• The US and Israel have drawn up plans for renewed strikes on Iran after next month’s midterm elections, the New York Times reported

• Brent has surged about 80% this year, though Gulf crude exports have recovered to near prewar levels

• US crude inventories fell by just over 3m barrels last week, while distillate stocks rose by almost 2m barrels

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Oil stocks broadly lower in early trade

[10:50 am] Oil stocks are broadly falling this morning with the S&P/ASX 200 Energy index down 2.15% in early trade. Santos reported record September quarter production and free cash flow, but narrowed its 2026 production guidance to 99 to 102mmboe after weather and pipeline disruptions at its Pikka project in Alaska.

Karoon Energy reported a 110% jump in September quarter production after maintenance at its Baúna oil field in Brazil, but an electrical fault at its SPS-92 well has cut current output by about 3,500 barrels a day.

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Top ASX 200 gainers

[10:34 am] A few gold miners are catching a bid in early trade following the VanEck Gold Miners ETF’s 0.7% gain in the US session. NextDC is also higher after falling 42% yesterday on its return from a trading halt. The company cut its FY27 EBITDA guidance by more than a third after Jemena suspended network works needed to increase grid supply to its M3 Melbourne data centre.

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Top ASX 200 losers

[10:33 am] Nick Scali shares are plunging in early trade after the furniture retailer warned first-half net profit will fall sharply as the housing downturn weighs on big-ticket purchases.

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Santos posts record output and cash flow, trims guidance on Pikka setbacks

[9:43 am] Santos delivered record production and cash flow in the September quarter as Barossa reached steady output and Pikka came online, though disruptions at the Alaskan oil project have trimmed its full-year outlook.

• Production hit a record 26.3mmboe, up 14% q/q and 23% y/y

• Sales revenue rose 49% q/q to US$2.01bn, with realised LNG prices up 45% to US$16.22/mmBtu

• Free cash flow from operations hit a record of about US$1.07bn

• 2026 production guidance was narrowed to 99 to 102mmboe from 99 to 105mmboe, lowering the midpoint by 1.5% to 100.5mmboe

• Pikka output will be held at about 70,000 barrels a day for a short period before ramping to its 80,000 barrel plateau, after weather and pipeline disruptions

• Santos agreed to lift its Papua LNG stake to 21%, with a final investment decision planned for the December quarter

Company page: Santos (STO)

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Karoon doubles quarterly output, but SPS-92 fault clouds outlook

[9:25 am] Karoon Energy’s production rebounded strongly in the September quarter after maintenance work at its Baúna oil field in Brazil, though a new electrical fault at a key well has cut current output.

• Production rose 110% q/q to 2.27MMboe in the September quarter, though it remains 12% lower y/y

• Sales revenue rose 64% q/q to US$191.6m, partly offset by a 15% fall in the realised Baúna oil price to US$80.60/bbl

• An electrical fault has cut SPS-92 well output by about 3,500 barrels a day, with Baúna now producing 16,400 barrels a day vs a quarterly average of 19,930

• CY26 production guidance of 6.6 to 7.2MMboe was unchanged, requiring about 1.6MMboe in the December quarter to hit the 6.9MMboe midpoint

• Net debt was steady at US$269.2m, after US$16.0m of share buy-backs and a US$6.0m interim dividend

• A decision on moving the Neon project into detailed design is expected in the December quarter, with farm-out talks to resume if it proceeds

Company page: Karoon Energy (KAR)

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Genesis Minerals lifts cash to $598m, flags $100m-plus tax bill

[9:15 am] Genesis Minerals made a solid start to FY27, with output tracking guidance and strong cash generation ahead of its merger with Vault Minerals next month.

• Gold production rose 2% q/q to 72,107oz in the September quarter, with sales of 71,594oz at an average price of $5,902/oz

• AISC rose 6% q/q to $2,966/oz, 2% above the midpoint of FY27 guidance, with second-half costs expected to be lower

• FY27 production guidance of 270,000 to 300,000oz was unchanged, with the quarter delivering 25% of the 285,000oz midpoint

• Cash and equivalents rose $78m to $598m, with an underlying cash build of $157.4m, down 40% from the June quarter

• A tax catch-up payment of $100m to $120m is expected in the December quarter, relating to FY26

• The Vault Minerals merger is set for implementation on 26 November, with the combined group targeting about $2bn in post-tax synergies

Company page: Genesis Minerals (GMD)

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Pantoro Gold lifts output 21% as staffing recovers, flags rising fuel costs

[9:14 am]Pantoro Gold’s Norseman operation recovered in the September quarter as underground staffing returned to near-budget levels, though rising diesel prices are starting to push up costs.

• Gold production rose 21% q/q to 21,864oz, in line with FY27 guidance of 90,000 to 105,000oz weighted 40% to 45% to the first half

• AISC fell 6% q/q to $3,860/oz, which the company said was in line with first-half expectations

• EBITDA was $63.1m, with 22,834oz sold at an average price of $6,067/oz

• Cash and gold rose $16.6m to $240.0m after $36.3m of project and exploration spending, with no debt or hedging

• Fuel costs ran 8% above budget in the quarter and are tracking 31% over budget in October

• The share buy-back resumed in October after no shares were bought during the quarter

Company page: Pantoro Gold (PNR)

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CSL hit with shareholder class action over FY26 disclosures

[9:11 am] CSL will defend a shareholder class action over its market disclosures in the lead-up to its FY26 result.

• The proceeding was filed in the Supreme Court of Victoria on behalf of investors who acquired CSL securities between 11 February 2025 and 11 May 2026

• It alleges breaches of continuous disclosure obligations and misleading statements about medium-term performance and expected FY26 revenue and net profit

• CSL denies any liability and says it has always complied with its disclosure obligations

Company page: CSL (CSL)

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Fortescue warns CMRG standoff may hit operations as unsold iron ore piles up

[9:09 am] Fortescue’s stalled price talks with China’s state-backed iron ore buyer are starting to leave cargoes unsold, with the miner warning operations may be affected if a deal isn’t reached by year-end.

• Sales of 42.9Mt fell 3.9Mt short of shipments in the September quarter due to the CMRG negotiations, with inventory to build by a further 4 to 5Mt in October

• FY27 shipment guidance of 197 to 207Mt was held, but production may be adjusted if no CMRG deal is reached by year-end

• Iron ore shipments fell 6% y/y to 46.8Mt, including 2.5Mt from Iron Bridge, during the company’s biggest-ever port shutdown

• Hematite C1 cash costs rose 21% y/y to US$21.98/wmt, above the top of FY27 guidance of US$20.50 to US$21.75/wmt

• The average realised hematite price fell 10% y/y to US$79.79/dmt, or 82% of the benchmark index

• Net debt rose to US$2.8bn from US$0.9bn at 30 June after the US$1.0bn final dividend and US$916m of capex

Company page: Fortescue (FMG)

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Cleanaway faces second strike on pay as it reaffirms FY27 guidance

[9:06 am] Cleanaway is set to receive a second strike against its remuneration report based on proxy votes, as the waste manager works through a proposed takeover by EQT Infrastructure.

• Proxy votes point to a second strike against the remuneration report, after a first strike at last year’s AGM

• Executives received 17.5% of their target short-term bonus, after the board withheld the underlying EBIT and safety components

• Free cash flow will make up 35% of the FY27 bonus scorecard, alongside 35% for underlying EBIT, with bonus deferral lifted to 40%

• FY27 underlying EBIT guidance of $500m to $530m was reaffirmed, with the $515m midpoint implying growth of about 10% on FY26

• The board recommends EQT Infrastructure’s $3.095 a share cash offer, subject to an independent expert’s report and no superior proposal

• Shareholders may also receive dividends of 14.5c to 19.0c per share, which may include a fully franked special dividend

Company page: Cleanaway Waste Management (CWY)

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Mirvac holds FY27 guidance as residential sales slump 17%

[8:59 am] Mirvac’s commercial property portfolio held up in the September quarter, though higher interest rates and tax changes continued to weigh on residential demand across its east coast markets.

• FY27 guidance was reaffirmed at operating earnings of 13.2 to 13.4c per security (13.3c midpoint) and a 9.9c distribution

• Residential sales fell 17% q/q and 44% y/y to 429 lots, with leads down 30% q/q as demand slowed in NSW, Victoria and now Queensland

• Residential settlements rose 10% y/y to 291, against an FY27 assumption of 2,800 to 3,100 weighted to the second half

• Investment portfolio occupancy held at 97%, with industrial leasing spreads of about 22%

• The weighted average cost of debt is expected to rise to about 5.8% from 5.7% after September’s 0.25% cash rate rise

• About 75% of the $200m buy-back has been completed

Company page: Mirvac Group (MGR)

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APA commits $700m to Bulloo pipeline, backed by Origin Energy contract

[8:58 am] APA Group has approved a new pipeline linking northern gas supply to southern markets as it moves to head off projected east coast gas shortfalls later this decade.

• APA reached a final investment decision on the Bulloo Interlink Pipeline, committing $700m on top of $220m already approved for early works

• Origin Energy signed a five-year transport and storage contract from 1 January 2028, paying for capacity whether used or not, with inflation-linked pricing

• The 800 terajoule-a-day pipeline targets commercial operation in winter 2029, with revenue ramping up over about five years

• The project will be funded from existing balance sheet capacity and is expected to deliver returns above APA’s hurdle rates

• Stage 3 of the east coast expansion will lift north-to-south capacity by about 30%, with Stage 3A on track for winter 2028

Company page: APA Group (APA)

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Generation Development’s FUM jumps 29% on record investment bond sales

[8:54 am] Generation Development Group made a strong start to FY27, with record investment bond sales and solid managed account inflows offsetting softer industry conditions.

• Group FUM rose 29% y/y to $48.1bn at 30 September

• Generation Life sales inflows hit a record $518m in the September quarter, up 57% y/y and 17% above the previous record

• Generation Life FUM rose 33% y/y to $6.38bn, with record net inflows of $427m

• Evidentia FUM rose 28% y/y to $41.7bn, with September quarter net inflows of $1.54bn

• Generation Life’s investment bond market share hit a record 66% of inflows in the June quarter, the latest industry data available

Company page: Generation Development Group (GDG)

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New Murchison Gold declares maiden dividend after first full year at Crown Prince

[8:53 am] New Murchison Gold will pay its first dividend after a strong first full year of mining at its Crown Prince gold mine in Western Australia.

• A maiden fully franked dividend of 0.25c per share totals about $27m, or 15% of free cash flow in the nine months to 30 June 2026

• Net profit was $146.95m for the nine-month transitional period, with operating cash flow of $195.2m

• Cash stood at $201.7m at 30 June, with net assets of $208.7m

• Shares go ex-dividend on 6 November, with payment on 26 November and no dividend reinvestment plan

Company page: New Murchison Gold (NMG)

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Forrestania secures third-party ore for Edna May in Star Minerals deal

[8:49 am] Forrestania Resources has struck a binding agreement to buy and process ore from Star Minerals’ Tumblegum Gold Project as it moves towards sustained gold production.

• Forrestania can buy and process up to 400,000t of ore from Tumblegum over an initial 24-month term

• Haulage to the Edna May processing facility begins on Friday, 23 October

• The deal gives Forrestania exclusivity over Tumblegum ore that meets an agreed minimum grade

• Pricing is based on ore grade, gold recovery rates and the gold price

Company page: Forrestania Resources (FRS)

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Vault Minerals’ costs run above guidance as production slips 14%

[8:47 am] Vault Minerals had a mixed start to FY27 as heavy rain and underground staffing shortfalls weighed on output, though strong gold prices kept cash building ahead of its merger with Genesis Minerals.

• Gold production fell 14% q/q to 76,849oz in the September quarter, with sales of 79,085oz at an average realised price of $6,023/oz

• AISC of $3,529/oz was 9% above the midpoint of FY27 guidance of $3,150 to $3,350/oz

• Underlying free cash flow was $95.7m, lifting cash and bullion by $45.1m to $886.7m after a $50.7m break fee on the terminated Regis Resources deal

• Standalone FY27 guidance of 355,000 to 375,000oz was unchanged, requiring about 96,000oz a quarter for the rest of the year to hit the 365,000oz midpoint

• The King of the Hills processing upgrade was completed ahead of schedule and on budget, with full processing rates expected from November

• The Genesis Minerals merger remains on track for implementation in late November, with shareholders to vote on 11 November

Company page: Vault Minerals (VAU)

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Genesis Energy cuts power costs on strong hydro, but retail volumes slip

[8:46 am] Genesis Energy made a strong start to FY27 as high hydro storage kept New Zealand wholesale power prices low, allowing it to buy electricity from the market rather than run its coal and gas units.

• Coal and gas generation fell 79% to 163 GWh in the September quarter, with Huntly Unit 5 idled and its gas redirected to industrial customers

• Retail electricity purchase costs fell 55% to NZ$124m, with the average price paid down from NZ$141/MWh to NZ$65/MWh

• Wholesale electricity sales fell 71% to NZ$67m on lower generation and spot prices

• Retail electricity volumes fell 6% to 1,766 GWh, while customer numbers rose 0.7% over the quarter to 493,450

• Stage 1 of the Huntly battery was commissioned, and the NZ$122m Leeston solar farm reached a final investment decision

• Genesis secured up to 20 PJ of additional gas for 2027 to 2029, including up to 8.6 PJ from the Kupe field

Company page: Genesis Energy (GNE)

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Magellan flags softer September quarter, more than doubles synergy target

[8:45 am] Magellan Financial Group flagged a weaker start to FY27 as global bond market volatility hit its newly merged Financial Markets business, while integration with Barrenjoey runs ahead of schedule.

• Financial Markets revenue was materially lower in the September quarter than the 1H26 run rate, after sharp moves in global bond markets

• AUM fell 8% to $38.0bn in the September quarter, as higher bond yields hit listed infrastructure valuations and outflows

• Corporate Finance activity remains strong, and bond market conditions have largely eased

• Annual merger synergies were upgraded to $15m from $6m on headcount savings, with the full benefit flowing through in FY28

• A new dividend policy targets a 60% to 90% payout of operating profit after tax from FY27, initially at the top end of the range

• Shareholders vote today on renaming the company Barrenjoey Group, with its ASX ticker to change to BJY

Company page: Magellan Financial Group (MFG)

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Federated Hermes says AI boom has years to run before bubble risks bite

[8:35 am] Federated Hermes’ Steve Chiavarone says concerns about an AI bubble are legitimate but premature, with the infrastructure buildout still years from completion.

• The AI buildout needs another three to four years before investors should worry about a hangover, said Chiavarone, CIO for global equities

• Markets are being selective about which companies get funded and at what rates, which he said is the opposite of bubble behaviour

• Most AI capital spending is funded from free cash flow, with debt playing a limited role and over-levered firms coming under stress

• AI model developers such as Anthropic and OpenAI face commoditisation risk, unlike large tech firms using AI to strengthen existing businesses

• He dismissed the US midterms as a risk to the AI trade, as no result would give Congress the numbers to change national AI policy

• His comments follow Ken Griffin’s warning on Tuesday that investors are “almost certainly” in an AI bubble

Source: Bloomberg

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Companies pull more than $5bn of debt sales as yields surge

[8:30 am] Rising interest rates, resurgent inflation and doubts over the AI boom are shutting riskier borrowers out of US and European credit markets.

• At least seven companies have postponed more than $5bn of US and European bond and loan sales in October, the most this year

• US junk bond sales have slumped to about $7bn in October to date, from $51bn in September

• Yields on B-rated junk bonds hit an 18-month high of 8.39% on Tuesday, and the riskiest CCC-rated debt hit a four-year high of 15.7%

• The largest delays include Circet’s €3bn refinancing, a $1.19bn loan-backed bond sale for Bridge Investment Group and a $690m AVI-SPL loan

• Credit risk measures for Meta and Oracle hit record highs on Tuesday on doubts over whether AI spending will pay off

• Investment-grade borrowers remain active, with Walmart and Kimberly-Clark selling about $8bn of notes on Monday

Source: Bloomberg

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Price-sensitive buyers gain sway over the US Treasury market

[8:30 am] The US government is increasingly reliant on investors who only buy its debt at the right price, adding to pressure on yields as central banks and pension funds step back.

• Private investors own about 70% of US federal debt, near the highest share since 1990, in a market that has grown seven-fold to $32trn over two decades

• Hedge funds hold about 8.5% of Treasuries, or roughly $2.7trn as at late 2025, after quadrupling their holdings between 2012 and 2025

• Falling Fed and foreign central bank holdings at one point added about 105bp to the extra yield investors demand to hold 10-year Treasuries, according to Bloomberg Economics

• US corporate pension funds were 114% funded in September, up from 82% in July 2020, weakening a key source of demand for long-dated bonds

• Citi’s Jason Williams said waning pension demand may push the Treasury to cut long-dated debt sales in favour of short-term bills

• Norway’s sovereign wealth fund manager proposed cutting its government bond holdings in September, after an Australian state-run fund trimmed its Treasuries last year

Source: Bloomberg

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Carney and Trump discuss trade with Canada still lacking a US deal

[8:30 am] Canadian Prime Minister Mark Carney said he spoke with Donald Trump on Wednesday morning about trade, Iran and Ukraine.

“We did address some of the issues around trade,” Carney told reporters. Canada has yet to reach a new trade deal with the US ahead of the midterm elections. Carney and Ontario Premier Doug Ford also announced C$9bn in support for industries hit by the trade war.

Source: BNN Bloomberg

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UK inflation jumps to 3.5%, cementing bets on a November rate hike

[8:25 am] Higher fuel prices pushed UK inflation above expectations in September, strengthening the case for the Bank of England’s first rate rise since 2023 a week before the government’s budget.

• CPI rose 3.5% y/y in September, up from 3.1% in August and above 3.4% ests, the highest in 11 months

• Core inflation rose to 2.8% from 2.6%, while services inflation lifted to 3.7% from 3.4%

• Transport prices rose 6.6% y/y, up from 4.6%, with diesel at its highest since July 2022

• Markets see a near-100% chance of a hike to 4% from 3.75% at the BoE’s 5 November meeting, according to AJ Bell

• The BoE expects inflation above 4% in early 2027, with household energy bills forecast to rise by up to 20%

• Public sector net debt passed £3trn for the first time, with September borrowing of £24.5bn above £23.9bn ests

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Nasdaq rises 1% as SpaceX results revive the AI trade

[8:25 am] Strong tech earnings eased concerns that heavy AI spending will be slow to pay off, with Tesla and Meta results extending gains after the close.

• The S&P 500 rose 0.6%, the Nasdaq 100 added 1% and the Dow gained 0.7%, with a gauge of chipmakers up 2%

• SpaceX’s blockbuster result led the rally, easing weeks of anxiety over how long AI investment will take to deliver profits

• Tesla’s profit beat ests after the close, easing concerns about its spending on AI and other new areas

• Meta lifted its capital spending outlook and announced plans for a new class of nonvoting shares as it steps up its AI push

• Netflix reported its slowest sales growth in three years and forecast a fourth straight quarter of slowing growth

• The 10-year Treasury yield rose 1bp to 5.12%, while spot gold added 0.2% to US$4,134.47 an ounce

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Gulf oil exports hold up as Iranian attacks on ships double

[8:24 am] Middle Eastern producers are keeping crude moving through the Strait of Hormuz despite more frequent and damaging Iranian attacks on shipping, with oil holding near five-month highs after Tehran played down hopes of talks with the US.

• Brent rose 0.9% to US$109.73 a barrel and WTI added 0.1% to US$97.92, paring earlier gains of more than US$2

• Gulf crude and condensate exports hit 24.6m barrels a day in the week to 18 October, according to Kpler, above the prewar level of at least 18.5m

• October exports remain below prewar levels at 16.7m barrels a day (Kpler) and 15.4m (Vortexa), with Vortexa putting last week at just 18m

• UK Maritime Trade Operations logged 32 attacks on ships around the Arabian peninsula in October to date, double the 16 in all of September

• At least five ships took engine-room hits in the first half of October, up from none in September, which can take tankers out of service for months

• Saudi Arabia lifted output by a third to more than 8m barrels a day in September, while the UAE pumped at a record high

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Good morning!

[8:02 am] ASX 200 futures are down 1 pts (-0.01%). Here's what happened overnight:

• Major US benchmarks higher and finished near best levels, led by AI and chip stocks after SpaceX results topped estimates

  • S&P 500 (+0.58%), Equal-weight S&P 500 (+0.36%)

  • Nasdaq (+1.05), Dow (+0.69%), Russell 2000 (+0.16%)

• Oil stayed near five-month highs as Iranian attacks on Gulf shipping intensified, though weekly Persian Gulf crude flows have recovered to around prewar levels

• UK inflation jumped to 3.5% in September, above estimates and the highest in almost a year, fuelling bets on a Bank of England hike