Morning Brew October 29 2026
Summary: ECB, Inflaion and Earnings
Good morning.
The Federal Reserve kept rates at 3.75%–4.00% in a 10–2 vote. Lisa Cook and Beth Hammack dissented for a quarter-point increase. The Fed upgraded its assessment of economic growth while stressing that inflation remains elevated: this is a wait-for-data decision, not a declaration of victory over inflation.
Kevin Warsh emphasised resilient spending, strong investment and the need to bring inflation back to 2%. Longer-dated Treasury yields rose, even as traders trimmed some expectations for further hikes. The next inflation readings remain central to the policy debate.
The Fed will still meet eight times a year, but seven meetings will set policy in 2027 and six in 2028, with the remaining meetings devoted to strategy.
Wall Street finished Wednesday slightly higher, helped by semiconductor stocks. The S&P 500 gained 0.3% to 7,744, the Nasdaq Composite rose 0.3% to 26,550 and the Dow added 0.2% to 52,475.
Overnight, the tone became more cautious after Alphabet’s results: in the early Asian session, Nasdaq-100 futures were down 1.4%, S&P 500 futures fell 0.5% and Dow futures gained 0.3%. These are futures moves, not Wednesday’s cash-market closes.
Alphabet: Shares fell roughly 9%–10% after hours as revenue of $127.6 billion missed expectations and free cash flow turned negative by $9.1 billion. Google Cloud revenue more than doubled, but weaker search-advertising results and the cost of the AI build-out overshadowed that growth.
Microsoft: Shares rose about 3% after hours. Azure revenue grew 48%, while free cash flow reached $18.6 billion, comfortably above expectations. The contrast with Alphabet puts the focus squarely on whether AI investment is translating into cash generation.
Micron gained 5.9% following strong results from SK Hynix, whose US-listed shares rose 13.3%. The Philadelphia Semiconductor Index added 1.8%, its fourth consecutive daily advance. Vertiv jumped 16.5% after beating expectations and raising its outlook; Robinhood fell 3.3% as softer cryptocurrency activity weighed on profit; Boston Scientific lost 5.8% after cutting its annual profit forecast.
200 S&P 500 companies have reported, with 84% beating consensus estimates. LSEG’s estimate for third-quarter earnings growth stands at 31.8% year on year, up from 30.6% at the start of October.
European markets were broadly steady on Wednesday. The Stoxx 600 edged up 0.1% to 644, the DAX gained 0.4% to 25,704, the FTSE 100 rose 0.1% to 10,695 and the Euro Stoxx 50 finished virtually unchanged at 6,168.
UK banks rallied after the budget’s bank-tax increase proved smaller than feared: NatWest gained 4.4%, Lloyds 4.3% and Barclays 3.8%. Stellantis jumped 15% on stronger-than-expected revenue and Genmab rose 29.1%. Unilever fell as much as 3.2%, while Logitech lost 10.8%.
Asian trading was mixed early Thursday. Japan’s Nikkei gained 0.4%, while South Korea’s Kospi fell 2.1% and China’s CSI 300 dropped 1.2%. Samsung’s shares weakened despite strong chip profits, as investors wanted more on shareholder returns and the outlook. Advantest rose more than 8% after raising its full-year forecast.
United States: The September goods trade deficit widened unexpectedly as imports reached a record, driven by capital goods linked to the AI infrastructure build-out. Some economists estimate that trade may have subtracted as much as four percentage points from third-quarter GDP growth, making the composition of today’s GDP report particularly important.
United Kingdom: John Healey’s first budget retained the fiscal rules, with the OBR estimating £15 billion of headroom in 2029–30. Measures include energy-bill relief, tariff suspensions on more than 100 supermarket goods, a 3.9% minimum-wage increase and £20.4 billion for the National Wealth Fund and British Business Bank. The OBR raised its 2026 growth forecast to 1.2%, cut 2027 to 1.0% and lifted borrowing and debt projections.
Germany: Consumer confidence remains weak. The NIM/GfK index slipped to −30.8 for November from −30.6 in October, with inflation concerns and subdued income expectations weighing on households.
Commodities and currencies
Oil: Brent settled Wednesday near $115 a barrel and WTI near $103 as Middle East supply concerns intensified. The Houthis claimed a strike on a major Saudi refinery, which Saudi authorities had not immediately confirmed. A surprise 1.9-million-barrel draw in US crude inventories added support. Diplomatic efforts to end the conflict remain an important counterweight to the supply-risk premium.
FX: EUR/USD trades around 1.1135, GBP/USD at 1.3315 and USD/JPY near 157.80.
Yields are slightly higher than yesterday with the UK 10`s at 5.32, the US 5%, France 4.93, Germany 3.37% and Japan 2.82%, Switzerland holds at 0.49%.
Precious metals: Gold is around $4,025 an ounce and silver near $52.85. My focus is gold’s $4,000 level and whether October ends above or below it. Bitcoin is trading just below $80,000, leaving that round-number level in focus.
Today’s busy agenda in CET .
- 13:30 — US data: September PCE inflation, the advance estimate of third-quarter GDP and weekly jobless claims.
- 14:15 — ECB rate decision: Followed by Christine Lagarde’s press conference at 14:45.
- Earnings: Merck, Mastercard, Caterpillar, Eli Lilly, Intel, Amazon, BYD, Denso, Keyence and Wilmar International. Amazon and Intel report after the US close.
The expectations are 3.1% annual core PCE inflation, 3.6% headline inflation and 3.2% annualised GDP growth.
My main ECB watchpoint is the December rate outlook rather than an expected hold today. Any change in the tone on inflation, French debt or the borrowing-cost gap between France and Germany could matter for the euro and European bonds.
The Bank of Japan’s decision is due Friday, 30 October, during the Asian session, with no fixed announcement time. A hold is expected; guidance on December will be the key focus.
Trade safely
Thursday, 29 October 2026
Macro: U.S. advance Q3 GDP, personal income and spending, PCE inflation and initial jobless claims.
Central banks: ECB rate decision and press conference; Bank of Japan meeting begins.
Corporate earnings: Amazon Shell, TotalEnergies and ING; Eli Lilly, Mastercard and Merck.
Friday, 30 October 2026
Macro: Euro-area flash Q3 GDP and preliminary October inflation; U.S. Q3 Employment Cost Index; month-end flows.
Central banks: Bank of Japan rate decision and Outlook Report.
Corporate earnings: Sanofi, AstraZeneca and BP; ExxonMobil, Chevron and AbbVie.