EQUITIES: E-Mini S&P Back Above 20-, 50-Day EMAs Following This Week's Recovery
The move higher in Eurostoxx 50 futures this week undermines a recent bearish theme and the contract is holding on to its gains. The contract has traded above the 20- and 50-day EMAs, signalling scope for a stronger recovery near-term. A continuation would open 5691.30 and 5742.40, Fibonacci retracement points. For bears, a reversal lower would instead expose the key S/T support and bear trigger at 5475.00, the Nov 21 low. S&P E-Minis are holding on to their latest gains following the recovery from the Nov 21 low. The climb has resulted in a breach of the 20- and 50- day EMAs. This highlights a bullish development and the likely end of the corrective cycle between Oct 30 and Nov 21. A continuation higher would signal scope for a move towards the key resistance and bull trigger at 6953.75, the Oct 30 high. Key support lies at 6525.00, the Nov 21 low.
- Japan's NIKKEI closed higher by 86.81 pts or +0.17% at 50253.91 and the TOPIX ended 9.87 pts higher or +0.29% at 3378.44.
- Elsewhere, in China the SHANGHAI closed higher by 13.336 pts or +0.34% at 3888.596 and the HANG SENG ended 87.04 pts lower or -0.34% at 25858.89.
- Across Europe, Germany's DAX trades lower by 11.58 pts or -0.05% at 23756.34, FTSE 100 higher by 16.88 pts or +0.17% at 9710.68, CAC 40 up 3.38 pts or +0.04% at 8102.85 and Euro Stoxx 50 down 2.37 pts or -0.04% at 5650.8.
- Dow Jones mini up 52 pts or +0.11% at 47542, S&P 500 mini up 7 pts or +0.1% at 6835, NASDAQ mini up 45.5 pts or +0.18% at 25347.75.
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GREECE T-BILL AUCTION RESULTS: 13-Week GTB
| Type | 13-week GTB |
| Maturity | Jan 30, 2026 |
| Amount | E500mln |
| Target | E500mln |
| Previous | E500mln |
| Avg yield | 1.72% |
| Previous | 1.78% |
| Bid-to-cover | 2.36x |
| Previous | 1.99x |
| Previous date | Oct 01, 2025 |
GBP: Vol Markets Signalling Significant GBP Vol Premium Into Budget
The pick-up in spot volatility this week has helped support implied at the margins, with the 1m contract (capturing the UK Autumn Budget on November 26th) rising back above 7 points to provide a decent premium over shorter-dated contracts that expire before the Budget.
While vols above 7 points look unimpressive in isolation, relative to EURUSD the move is extreme. The GBP 1m vol premium over EUR is now near 2 points and the widest since 2023 - signalling markets assigning a greater risk premium to GBP despite the background low vol regime.
We write on the latest expectations for the UK Budget in the Gilt Week Ahead here: https://media.marketnews.com/Gilt_Week_Ahead20251027_14ac41803e.pdf
And summarise the key drivers of GBP spot weakness here:
- Speculation that Reeves will break a manifesto pledge and raise income tax has been bolstered by the FT's reporting on a sizeable productivity estimate cut triggering a broader financing need.
- Higher income taxes would contain consumption, helping smooth the path for faster BoE rate cuts across 2026 (and potentially by the end of 2025).
- Food inflation remains a key driver of inflation expectations (e.g. Just this week: The Times: '‘Shrinkflation’ of supermarket staples rife on British high streets', BBC: 'Businesses face 'rising costs and staffing pressures''), however Tuesday's BRC-NIQ shop price data suggests we have passed the peak in food price gains.
- Food price inflation is particularly important given how well supported it has been this year via both higher employer's NIC contributions as well as incoming packaging taxes, but today's numbers endorse the step lower in ONS food inflation and may suggest inflation expectations will follow.
LOOK AHEAD: FOMC Decision And Press Conference
US Data/Speaker Calendar (prior, estimate), All times ET
- 0530 Trump currently at APEC leader’s working dinner, South Korea
- 0700 MBA mortgage applications (-0.3%, --)
- 1000 Pending home sales MoM (4.0%, 1.2%)
- 1130 US Tsy $69B 17-wk bills
- 1130 US Tsy $30B 2Y FRN (91282CPG0)
- 1400 FOMC decision
- 1430 Powell press conference
No data releases for advance trade balance and retail/wholesale inventories due to the ongoing government shutdown
Source: Bloomberg, White House Pool, MNI
