US STOCKS: Viewpoint: Claude Is The New Windows

Spot USD/CNH couldn't test sub 6.6900 as Monday trade unfolded, the pair tracks near 6.6950 in early Tuesday dealings. CNH lost a little ground versus the USD as Monday trade unfolded, as broader USD indices rose (BBDXY up a little over 0.10%, DXY +0.36% firmer). Higher energy prices amid Ukraine's Zelekskyy saying Russia has violated the "energy ceasefire" between the two nations as well as continued firm rhetoric from Iran prompted a renewed advance for USD indices (the DXY through recent highs above 102.5). The CNH outperformance theme remained firmly intact though. Spot USD/CNY finished up at 6.6938, while the CNY CFETS basket tracker edged a little higher to 103.585. 

• For spot USD/CNH, broader downtrend conditions are still maintained for the pair. Downside focus will remain on a sub 6.6900 test, while we remain under all key EMAs, with the 20-day at 6.7050 currently.
• EUR/CNH tested fresh cycle lows on Monday, getting to 7.4470 (last 7.4700), as the pair looks to consolidate its break under 7.5000. Mid March 2023 lows were just under 7.2700 for the pair (see the long run chart below). CNH/JPY is currently at 23.6920 fresh highs since early Sep. Highs just short of 23.85 from that period will be an upside focus point.
• CNH remains immune to higher US-CH yield differentials, continuing to present as somewhat of a safe haven to higher UST yields and the negative terms of trade shock. Focus will remain on push back from the authorities around yuan outperformance, with first signs likely to appear in the CNY fixing outcome.   
• On the data front, we still await Sep new loans/aggregate finance figures, while tomorrow delivers Sep inflation and trade balance figures.  

Fig 1: Spot EUR/CNH 

Source: Bloomberg Finance L.P./MNI 

TYZ6 is dealing at 104-19+, +0-01+ from closing levels in today's Asia-Pac session.

• Cash US Treasury markets were closed on Monday for the Columbus Day federal holiday. As a result, the primary price action occurred in Treasury futures, which traded with anemic volumes — approximately 20% of recent average.
• Friday’s session had seen 10- and 30-year yields finish at 5.2378% and 5.5956%, respectively, after reaching multi-decade highs on Wednesday/Thursday last week.
• Oil prices rose on Monday on concerns of the impact of ongoing conflicts in the Middle East and Ukraine. Saudi Arabia is likely to retaliate for two deadly Houthi strikes on Riyadh's international airport increasing concerns that its energy infrastructure will be targeted again.
• President Zelenskyy said Ukraine will continue to target Russia's energy facilities as it didn't stop striking Ukraine's following President Trump's announcement of an "energy ceasefire". Russia attacked power plants in Ukraine in the hours following the decision.
• The September CPI print on Wednesday and Fed Chair Kevin Warsh’s scheduled speech will be closely watched for signals on the pace of further rate hikes. OIS shows three Fed rate hikes fully priced by July 2027.

Bloomberg Finance LP

Oil prices rose on Monday on concerns of the impact of ongoing conflicts in the Middle East and Ukraine. Saudi Arabia is likely to retaliate for two deadly Houthi strikes on Riyadh’s international airport increasing concerns that its energy infrastructure will be targeted again. President Zelenskyy said Ukraine will continue to target Russia’s energy facilities as it didn’t stop striking Ukraine’s following President Trump’s announcement of an "energy ceasefire". Russia attacked power plants in Ukraine in the hours following the decision.

• WTI increased 1.4% to $93.16/bbl after reaching $94.36 to be 3% higher in October. It remains below the bull trigger at $101.69.
• Brent rose 1.4% to $106.13/bbl off the high of $107.33 but up 8.1% this month. It breached initial resistance at $105.92, 8 October high, opening $109.31. A fresh cycle high last week reinforced the bullish trend condition.
• It appears that Presidents Putin and Zelenskyy didn’t agree to Trump’s "energy ceasefire" as the latter said he read about it on Truth Social. Trump said to reporters at the White House Monday that he believes they both support the ceasefire but that Putin wants a deal more than Zelenskyy.
• Deputy PM Novak said Russia is ready to resume diesel exports of around 500k tonnes with its export ban now lifted. However, Kpler estimates this is a tiny share of 2025’s 28.6mn tonnes of diesel exports. Gasoil fell 1.7% on Monday.
• UKMTO reported six vessels struck around Hormuz and the Gulf of Oman on Sunday with Iran reporting another hit Monday. With reports of oil shipments from the region close to pre-war highs, these attacks are likely to continue as Iran tries to control the waterway. According to Bloomberg, tankers are reversing away from the Persian Gulf.
• Oxford Economics is forecasting Brent to average over $100/bbl through Q2 2027 given the ongoing risk premium (Bloomberg).