Global equities are under greater policy scrutiny today due to the release of the FOMC (U.S.) and ECB (Eurozone) minutes, which are expected to shed light on the future pace of interest rate cuts. In the US, while markets digest the Fed’s mixed message on rate cuts, TSMC’s stronger-than-expected Q3 revenue surge is providing a strong tailwind for the AI and semiconductor supply chain, keeping the sector in a ‘risk-on’ mode. Today’s Weekly Initial Jobless Claims report is the key real-time labour market indicator and could quickly influence the odds of a rate cut in the absence of official government statistics. Gold remains a significant player, trading above $4,000/oz, underscoring safe-haven demand amidst high macro uncertainty.

• In Europe, the economic outlook is bleak, with Germany’s industrial production plunging by an unexpected 4.3% in August (its sharpest decline since March 2022), driven by a significant decrease in automotive production. This report highlights cyclical pressures and exacerbates concerns about a technical recession in the Eurozone’s largest economy. The release of the ECB minutes and a speech by the ECB’s Chief Economist, Philip Lane, will be crucial in providing clarity on how the central bank intends to address this industrial weakness.

• In Asia, the next trading session will be heavily influenced by the upcoming Japan Producer Prices (PPI) report. A softer-than-expected result would ease pressure on the Bank of Japan to shift policy in the near term, while a firmer result would intensify fears of “normalisation”. The positive impact of TSMC’s earnings is expected to benefit Japanese companies in the semiconductor sector.