Housekeeping: Good Morning.
“The Gold reset is a process, not an event”
Today:
Discussion: IMF Blows Up Brics mBridge
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Discussion: IMF Blows Up Brics mBridge
Bloomberg reported today that the The BIS is considering shutting down its mBridge cross-border payments platform after Russia's President Vladimir Putin spotlighted its potential to evade U.S.-driven sanctions and disrupt dollar dominance, especially as he proposes a BRICS-exclusive “BRICS Bridge” system.
Developed initially by central banks in China, Thailand, Hong Kong, and the UAE, mBridge recently reached a testing phase but faces scrutiny due to China’s role and Western concerns over sanction circumvention. While some BRICS members are cautious, the project reflects rising interest in alternatives to dollar-reliant systems, though internal divisions may impact the pace and reach of these initiatives.
News/Analysis:
Equity Recap:
US equities advanced on Monday ahead of a raft of Big Tech earnings this week. Large caps lagged small caps: S&P 500 (+0.27%) vs. Russell 2000 (+1.63%). MSCI Emerging Markets (EEM) and MSCI EAFE (EFA) added 0.44% and 0.80% respectively.
Market News: The Iron Curtain Rises*
*h/t Matt Riley
"The Biden administration finalized restrictions on investments by US individuals and companies into advanced technology in China, including semiconductors, quantum computing and artificial intelligence. The rules, which come after more than a year of deliberation, ban some investments into those industries and require the US government to be notified about others. The goal is to prevent American capital and know-how from helping China develop critical technologies that could lend Beijing a military edge." Source: Bloomberg
"Oil prices fell sharply on Monday after Israel’s attack on Iran at the weekend avoided oil and nuclear facilities and Tehran gave a measured response to the strikes...: FT
"Apple on Monday released iOS 18.1, an update for iPhones that includes the first public version of Apple Intelligence, Apple’s artificial intelligence system. CNBC
"OpenAI generates the vast majority of its revenue from consumers who pay for its products, Chief Financial Officer Sarah Friar said, even as the artificial intelligence startup competes in a crowded market to sign up more corporate customers Bloomberg
"Ford Motor said its adjusted profit for the full year would come in at the low end of its guidance, disappointing investors WSJ
"As Meta Platform tries to keep up with OpenAI in developing artificial intelligenceThe Information
"Volkswagen’s works council said the auto giant aims to shut at least three factories in Germany, downsize its remaining plants and lay off tens of thousands of staff as part of a cost-cutting drive.WSJ
"Microsoft has accused Google of running “shadow campaigns” seeking to undermine its position with regulators and politicians,: FT
Politics/Geopolitics:
Israeli PM Netanyahu said they have not received an offer to release 4 hostages in exchange for a 48-hour ceasefire in Gaza, according to Asharq News. It was separately reported that Israeli PM Netanyahu is waiting to see who will succeed President Biden before committing to a diplomatic path, according to NYT.
Israeli Defence Minister Gallant said the Israeli forces' targeting of Iranian radars and air defence systems will help Israel if it decides to launch a new attack on Iran. Furthermore, he stated the recent Israeli attack led to a change in the balance of power with Iran and that Iran is no longer able to produce weapons and defend itself as in the past.
Israel’s Channel 13 reported that following the UAV strike on PM Netanyahu's residence last week, the cabinet decided there could be another response against Iran soon and noted that two days after their repentance operation and the IDF attack on Iran, the working assumption in the security establishment is that there will be an Iranian response. However, the report added that it seems Tehran has not yet decided whether and how to attack, while the security establishment assessment is that Iran is not interested in acting immediately.
Iranian representative to the UN Security Council said Israel and its US backer bear responsibility for the dangerous escalation in the region and most of the bombs that Israel drops on civilians are made by the United States. Iran's envoy added the US government is complicit in the Israeli aggression and will be punished for its action, while they reserve the right to respond to Israeli aggression at a time of their choosing.
UN Secretary-General Guterres said if Israel's laws on UNRWA are implemented, it could have devastating consequences for Palestine refugees in occupied Palestinian territory which is unacceptable, while he added there is no alternative to the UNRWA and it is indispensable.
North Korea is ready for another military satellite launch thanks to Russia's technological support, according to Yonhap citing South Korea's spy agency. Furthermore, the report noted that North Korea sent 4,000 workers to Russia this year, while certain high-ranking military officials and troops deployed to Russia might move to the frontline.
Pentagon reportedly suffers from a shortage of air defense missiles due to growing demand and fears running out of interceptor missile stockpile, while the shortage jeopardises US interests in the Pacific, according to WSJ
Data on Deck: PCE and NFP/Unemployment
MONDAY, OCT. 28 None scheduled
TUESDAY, OCT. 29 S&P Case-Shiller home price index
WEDNESDAY, OCT.30 Retail and Trade
THURSDAY, OCT. 31 PCE , Core PCE index Oct.
FRIDAY, NOV. 18:30 am U.S. employment report
*FINAL MARKET CHECK
