Morning Brew October 14 2026

Good morning.

U.S. inflation is the dominant market driver today, overshadowing an otherwise heavy news flow. Markets are focused on the CPI release and any resulting shift in inflation expectations, which have been the main force behind the bond selloff.

The U.S. CPI is due at 14:30 CET. Core inflation is expected at 2.5% and headline inflation at 3.6%, compared with previous readings of 2.4% and 3.4%. Headline CPI covers the full consumer basket, including food and energy, while core CPI excludes these volatile components and provides a clearer view of underlying inflation. Markets and the Federal Reserve generally focus more on core CPI when assessing persistent price pressures and the future path of interest rates.

Federal Reserve pricing remains cautious. Markets assign an 80% probability that rates will remain unchanged at the meeting in two weeks, while a rate increase on 9 December is nearly fully priced.

Beyond inflation, the Middle East remains in focus, China’s growing trade surplus is unlikely to be well received in the United States or Europe, and earnings from BlackRock and several major banks will be closely watched.

ASML delivered a strong outlook, forecasting fourth-quarter sales above analyst expectations as AI-driven demand for chipmaking equipment remains robust and narrowing its 2026 guidance.

Fourth-quarter net sales are expected between EUR 14 billion and EUR 15 billion, with a gross margin of around 57%. Analysts had expected sales of EUR 14 billion and a gross margin of 55.4%.

Iran is changing its tactics in the Strait of Hormuz, targeting ships in an attempt to keep oil prices elevated and influence the U.S. midterm elections, according to two senior Iranian officials.

The Strait of Hormuz remains a critical pressure point. Tehran has sought greater control over the waterway since the United States and Israel launched strikes on Iran on 28 February. Before the war, the strait carried around one-fifth of global oil and liquefied natural gas trade, giving Iran significant leverage over Washington and global energy markets.

Fed officials remain divided on the path ahead. New York Fed President John Williams said one more rate increase is appropriate this year but does not expect further tightening in 2027. White House NEC Director Kevin Hassett said it is very possible that the Fed could hold rates if inflation continues to slow.

U.S. equities were little changed, with the S&P 500 closing at 7,805, the Nasdaq 100 down 0.3% and the Dow falling 180 points. Trading volume was relatively light at 15 billion shares. Chipmakers declined for a sixth consecutive session, with Applied Materials down 6.7% and Micron 3.6%, while Goldman Sachs slipped 0.2%. JPMorgan and Wells Fargo were mixed, and Microsoft reached a record close. Apple touched an intraday high of USD 348 before closing 0.1% higher at USD 341, lifting its market value to almost USD 5 trillion. The company also unveiled a smart-home hub that uses iPhone data to make Siri more personal while keeping the information private.

Apple’s HomeView hub is an important test of the company’s AI strategy as it seeks to close the gap with Amazon and Google while reinforcing its reputation for user privacy.

Single-stock moves were significant. Johnson & Johnson fell around 6%. After hours, regulators fined Bank of America USD 1 billion for insufficient systems to monitor and report potential financial crimes, including money laundering. The penalties included a USD 750 million fine from the Office of the Comptroller of the Currency, the largest in the regulator’s history.

European equities reversed earlier gains, with the Stoxx 600 closing 0.1% lower at 635 after technology shares sold off late in the session. ASML fell 4.2% and ASM International 6.3%, pulling the technology sector down 1.6%. Givaudan surged 9.4% after stronger-than-expected growth, while BP gained 3.7% after signalling lower capital expenditure. The DAX closed marginally lower at 25,260, weighed down by Siemens Energy and sticky German inflation.

The U.S. dollar is giving back some gains, with the USD Index at 102.10 and EUR/USD back above 1.12. GBP/USD is at 1.3270 and USD/JPY at 158.25. Gold and silver remain under pressure at 4,160 and 59, while Bitcoin is trading at 83,400.

AI IPO uncertainty is increasing. The planned listings of Anthropic and OpenAI have both been affected by shifting market conditions, while other companies are adjusting their own plans around what could be among the largest public debuts in market history. Anthropic will hold an investor day at its San Francisco headquarters on Wednesday after delaying the event by several weeks. Cooling IPO demand was also visible in Australia, where data-centre companies AirTrunk and Firmus Grid paused their planned listings within days of each other.

China’s imports jumped 31%, accelerating from 28.2% growth in August and exceeding the 24.5% consensus estimate. Factory-gate prices also rose at their fastest pace in more than four years in September.

China’s trade surplus reached USD 938 billion in the first nine months of the year, leaving the country on course to exceed USD 1 trillion sooner than last year unless exports slow sharply in the final quarter. For now, such a slowdown appears unlikely. European trade measures may eventually curb Chinese vehicle exports, following an agreement to limit hybrid-car shipments to the bloc. However, with the measures expected to be detailed in December, exporters may accelerate deliveries ahead of the deadline.

France must address its debt problems through fiscal consolidation, ECB President Christine Lagarde said, playing down speculation that the central bank could intervene in the bond market. French bonds remain under pressure as investors worry that political tensions ahead of next year’s presidential election will hinder efforts to reduce the deficit. The French–German spread is at 138 basis points this morning. The U.S. 10-year yield is at 5.20%, while Japan’s 10-year yield is testing 3% to the downside.

The outlook is for a busy and potentially volatile session, with the U.S. CPI release at 14:30 CET likely to set the tone for bonds, currencies and equities. The Middle East, China’s trade data, major bank earnings and any reaction from the White House remain the other key drivers. Trade safely.

Wednesday, 14 October 2026

Macro: China CPI and PPI; U.S. CPI.
Corporate earnings: ASML, Bank of America, Morgan Stanley, BlackRock, State Street and Fastenal.

Thursday, 15 October 2026
Macro: Australia employment report; U.S. PPI, retail sales and initial jobless claims.
Corporate earnings: Taiwan Semiconductor Manufacturing, Charles Schwab, Prologis, U.S. Bancorp, PNC Financial Services, Infosys and Wipro.

Friday, 16 October 2026
Macro: Euro-area final inflation; U.S. industrial production.
Corporate earnings: Truist Financial, M&T Bank, Regions Financial, Citizens Financial, Travelers, HDFC Bank, Danske Bank, SKF, Swedbank, Telia and Yara International.