Nasdaq Futures Rebound as Oil Slips and China Beats
Monday, 19 October 2026 — US equity futures rebounded from last week's chip rout, and oil fell as supply from the Middle East held near pre-war levels.
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In brief
US equity futures rebounded from last week's chip rout, and Treasuries are showing signs of reclaiming their haven role as bets on an October Fed hike fade.
China's third-quarter growth beat expectations as exports and industrial output held up, though property investment fell further.
Bank of Japan Governor Ueda said underlying inflation is very close to target, and PM Takaichi rejected claims that her policies drive the weak yen and high rates.
ECB officials lean towards a third rate rise in December, and the euro eased after a weekend of violent protests in France.
RBA Assistant Governor Kent said the labour market is loosening faster than forecast and asked whether policy is restrictive enough.
Oil fell after President Trump waived the Graham Act sanctions on Russian energy, with supply from the Middle East holding near pre-war levels.
CoreWeave's bond distress is freezing junk-bond funding for AI start-ups, and the FT reports that dozens of large US data-centre projects have been delayed or blocked this year.
Today's Macro Roadmap: Swiss sight deposits are out at 10:00 CET, Canada's September inflation report follows at 14:30 CET ahead of next week's Bank of Canada decision, and the Bank of Canada's Business Outlook Survey is published at 17:30 CET. Fed officials are in their pre-meeting blackout.
The full briefing
US equity futures rebounded from last week's chip rout, and oil fell as supply from the Middle East held near pre-war levels (BBG). Nasdaq 100 futures rose 1.2% to 29,756 and S&P 500 futures 0.8% to 7,763 after Friday's selloff on Wall Street, when a closely watched semiconductor gauge posted its longest run of declines since 2008, and the volatility index recorded its biggest jump since June (BBG). S&P 500 futures had fallen 1.1% on Friday and Nasdaq 100 futures 2.5%. Dow futures rose 0.5% this morning and Russell 2000 futures 0.7%. Tesla and Meta earnings this week will test confidence in the AI trade after last week's setbacks (BBG).
Stocks
In stocks, Nikkei 225 futures fell 0.9% to 64,920, and the MSCI Asia Pacific Index pared earlier losses (BBG). The CSI 300 rose 0.6% to 4,130 after China's growth beat, and MSCI emerging-markets futures rose 1.0% to 1,623. Australia's ASX 200 futures rose 0.3% to 8,861. Euro Stoxx 50 futures fell 0.3% to 6,201 after the weekend's protests in France (BBG), and FTSE futures edged down 0.1% to 10,914. VIX futures fell 0.26 points to 18.5. Investors including Ray Dalio and Michael Novogratz see bubble conditions in the AI trade, but Oaktree's Howard Marks says a bubble requires an investor obliviousness he does not yet see, and the five biggest tech stocks trade at about 23 times forward earnings against about 65 before the 2000 peak (BBG). The eight-session semiconductor rout wiped roughly 16% off the sector benchmark, and 45% of fund managers in a widely followed October survey called long semiconductors the most crowded trade, down from 82% in July (BBG). Before Wednesday, the S&P 500 had gone 53 sessions without a 1% drop, the longest stretch since January 2020, and some investors are now positioning for the swings in tech to spread to the broader market (BBG).
The Fed
Regarding the Fed, traders pared bets on a rate rise this month after Fed Chair Kevin Warsh made no remarks on policy at the IMF meetings on Friday (BBG). Hotter-than-expected consumer prices had pushed the perceived probability of an October hike to about 50% at one point last week before the stock selloff cut it back, and traders still see one tightening by year-end and another in 2027 (BBG). Fed officials are in their blackout period ahead of the 27-28 October meeting (BBG).
The euro area
In the euro area, ECB officials are preparing a third rate increase of the year in December, with Governing Council members Martins Kazaks and Gediminas Simkus pointing to the 17 December meeting and its new forecasts as the more likely timing while keeping October open (BBG). Kazaks said the trade-offs for policy "are going to get more tricky", and Pierre Wunsch said the market's pricing of more hikes "looks reasonable" (BBG). ECB President Christine Lagarde said the bond selloff will slow inflation (Reuters), and she told CNN the ECB is not yet seeing secondary effects from the energy shock (BBG).
The UK
In the UK, Bank of England Governor Andrew Bailey said in Bangkok that there is little evidence yet of the energy shock spreading widely across the economy, and the Bank already forecasts inflation above 4% in early 2027 (BBG). More than half of first-time buyers who bought last month are paying more in mortgage costs than they did in rent, the largest share in at least a decade, after the average five-year fixed rate reached 6% this month (BBG).
Japan
In Japan, Bank of Japan Governor Kazuo Ueda told parliament that underlying inflation is quite close to the 2% target and that very strong global AI demand is boosting capital spending and exports (Reuters), and he added that long-term yields may rise if the market perceives the BoJ is not raising its policy rate at an appropriate pace (BBG). Prime Minister Sanae Takaichi rejected claims that her policies are behind the weak yen and high rates, and said she will control JGB issuance in next year's budget (BBG). The IMF said the BoJ may need to tighten faster if inflation beats its forecast (Reuters), and the global inflation debate has put the pace of BoJ hikes in the spotlight (Reuters).
The RBA
Regarding the RBA, Assistant Governor Christopher Kent said the labour market has eased faster than the Bank forecast, and the key question is whether weakening demand or rising labour costs is driving it (BBG). He said the cash rate sits at the upper end of the RBA's neutral estimates, so policy is somewhat restrictive, "but the question is, is it restrictive enough?" (BBG). The RBA raised the cash rate to a 15-year high of 4.6% last month (BBG).
Currently, STIR traders price a 13% probability of a Fed rate rise this month and 25 basis points of tightening by December. For the ECB, they price an 11% probability of a rate rise in October and 25 basis points by December, and for the BoE a 73% probability of a rate rise in November. For the BoJ they price a 4% probability of a rate rise in October and 20 basis points by December, for the RBA a 22% probability of a rate rise in November, and for the Bank of Canada a 37% probability of a rate rise on 28 October.
Currencies
In currencies, the dollar index was little changed at 101.84. The euro eased 0.1% against the dollar to 1.123 after the weekend's violent protests in France (Reuters), and it weakened against most of its Group-of-10 peers (BBG). Sterling was little changed at 1.3333, and the yen edged down 0.1% to 158.11 per dollar. The Australian dollar rose 0.4% to 0.6974 and the New Zealand dollar 0.2% to 0.5661. The won rose 0.4% to 1,328.51 per dollar and the rupee 0.2% to 94.79. The Canadian dollar firmed 0.1% to 1.4123 per dollar ahead of today's inflation report, and the offshore yuan was little changed at 6.6808.
Bonds
In bonds, the ten-year Treasury yield slipped 0.8 basis points to 5.06% and the thirty-year 1.3 basis points to 5.41%. The two-year rose 1.3 basis points to 4.72%. Treasuries are showing tentative signs of reclaiming their haven role, with ten-year yields down about 17 basis points last week as the Nasdaq 100 fell 5.5%, the first time both dropped that much in a week since the April 2025 tariff turmoil (BBG). Commodity trading advisers exited bearish futures positions entered at extremely short levels, and investment-grade companies have sold about $1.7 trillion of bonds this year, up some 29% (BBG). Japan's ten-year yield fell 1.8 basis points to 2.91% and the two-year 1.5 basis points to 1.90%. Australia's ten-year yield was little changed at 5.23%. Net interest on US government debt reached a record $1.05 trillion in fiscal 2026, up more than 8% from $970 billion, and the average rate on marketable Treasuries was 3.52% at the end of September against 1.47% five years earlier (Yahoo). The fiscal 2026 budget deficit was the largest in five years (Reuters).
Commodities
In commodities, WTI fell 1.4% to $100 a barrel, and Brent fell 1.7% to $108 a barrel after President Donald Trump waived the Graham Act-mandated sanctions and tariffs on Russian energy, citing the national interest (BBG). The waiver may lead to more Russian fuel supplies (Reuters). Brent had hit $110 a barrel on Friday for the first time since May as Houthi strikes on Saudi Arabia continued (BBG). Iran's IRGC Navy said an oil tanker caught fire and exploded after hitting a mine in the Strait of Hormuz, and India's shipping minister said a crude tanker carrying 15 Indian seafarers was struck by a projectile in the strait on 16 October (LS). Gold rose 0.4% to $4,180 an ounce as traders pared bets on a Fed hike this month (BBG). Copper rose 0.6%. Bitcoin rose 2.2% to $82,630, and Ether rose 3.3% to $2,426, while US spot Bitcoin ETFs recorded $228.6 million in outflows last week after $681 million the week before (BBG). Global food inflation is expected to intensify as supply shocks pile up (Reuters). Two years into Trump's second term, US gasoline prices are up almost 40% to more than $4 a gallon, and diesel costs 74% more, and 74% of respondents to a Pew survey said they are very concerned about energy prices (BBG).
Geopolitics
In geopolitics, Russian President Vladimir Putin has proposed a three-way summit with Trump and Chinese leader Xi Jinping next month to discuss Ukraine, possibly on the sidelines of the APEC summit in Shenzhen on 18 and 19 November, and a senior US official said Trump has not agreed (WSJ). Ukrainian President Volodymyr Zelenskyy told Bloomberg that officials have taken steps to convince Ukraine to capitulate, citing slowed Starlink speeds and Patriot interceptor deliveries of only 12 a month (BBG). Republican senators, including Ted Cruz, called the sanctions waiver a mistake that benefits Putin (Japan Times). In France, President Emmanuel Macron urged calm as the country counted the cost of its worst unrest in years, with 2,400 arrests, nearly 1,000 officers injured and fresh clashes in Paris and Marseille on Sunday (Reuters). Half a million people had marched against the cost of living on Saturday, with looting and town halls stormed in Marseille and Lille (News24). Saudi Arabia lost two crew in a helicopter crash near the Yemeni border and intercepted waves of Houthi drones over Riyadh, where the airport has been attacked 20 times this month (BBG).
Corporate news
In corporate news, junk-bond buyers are freezing out tech start-ups after yields on CoreWeave's bonds surged to 15% last week, with high-yield data-centre bond prices down to nearly $95 from $101 in June and companies having sold $106 billion of project bonds this year, almost triple 2025's total (BBG). At least 47 large US data-centre projects in the AI infrastructure boom have been delayed, withdrawn or blocked in 2026; Anthropic can walk away from its $45 billion deal with Nscale if timelines slip; and Nscale had only 25,000 advanced chips online in August against the nearly 500,000 it plans (FT). Nscale is facing opposition to its IPO valuation target (BBG). Nvidia Chief Executive Jensen Huang said of the rout that "all of this is going to pass" (BBG). EQT agreed to buy Australia's Cleanaway Waste Management in a deal valuing it at about A$9.3 billion (BBG). The Bank of England is examining whether Barclays traders misrepresented illiquid private credit loans by allocating total return swaps to the trading book, after an insider complaint to the PRA (FT).
Research trade ideas
Moo Point Capital's Jeremy Wien said he would rather own S&P 500 or Nasdaq 100 puts than VIX calls, because the VIX may not spike as much in an equity selloff as in prior cycles, and Kyte's Andy Kent said index puts and put spreads could offer cheap macro hedges while index volatility and correlations are low (BBG). Bank of America strategists note that VIX call positioning by customers has risen sharply towards summer-2024 levels (BBG).
Data and the day ahead
Data and the day ahead: China's economy grew 4.5% y/y in the third quarter, above the 4.4% consensus and up from 4.3%, with quarterly growth of 1.2% against 1.0% expected (CNBC). Retail sales rose 1.1% y/y in September from 0.4%, more than double the 0.5% consensus, and industrial output rose 5.5% from 5.2%, in line with expectations (CNBC). Fixed-asset investment fell 7.2% in the first nine months, property investment fell 20.6%, and the surveyed jobless rate dipped to 5.2% from 5.3%. New home prices fell 0.14% m/m in September after 0.17% in August (BBG). Used home prices fell 0.26% after -0.31%. Japan's tertiary industry index fell 0.1% m/m in August, below the expected 0.4% decline, after a revised 0.2% rise. New Zealand's trade deficit widened to NZ$1,971m in September from NZ$1,349m. UK Rightmove asking prices rose 1.0% m/m in October from 0.7%, and the annual rate improved to -0.1% from -0.8%. Fed officials are in their blackout period, and the ECB's quiet period begins on Thursday (LS). Still to come: Swiss sight deposits at 10:00 CET, then the day's main event, Canada's September inflation report at 14:30 CET, with consensus at 3.2% y/y from 3.0% and 0.2% m/m from -0.1%, ahead of the Bank of Canada's 28 October decision (LS). The Bank of Canada's Business Outlook Survey follows at 17:30 CET. Later in the week, the UK labour market report is due on Tuesday and UK inflation on Wednesday, with consensus at 3.4% y/y from 3.1% (LS). New Zealand's third-quarter inflation is due late on Wednesday (LS), Japan's September inflation on Friday, with consensus for CPI ex fresh food at 2.1% y/y from 1.7% (LS), and the flash PMIs for the euro area, the UK and the US on Friday (LS). Netflix reports tomorrow, and Tesla and Meta on Wednesday (BBG).
Time Stamp: 19 October 2026, 07:38 CET
Editor's Note
Three threads to carry through the day.
The first is the AI trade's financing leg. The rebound in Nasdaq futures follows a week in which CoreWeave's bonds hit distressed yields, junk-bond buyers pulled back from data-centre issuers, and the FT counted dozens of large projects delayed or blocked. Netflix tomorrow and Tesla and Meta on Wednesday decide whether last week was an overreaction.
The second is the bond market. Treasuries rallied on the AI wobble, and traders cut the odds of an October Fed hike after Warsh said nothing on policy, but Friday's oil surge showed how quickly the haven bid reverses when inflation is the driver. With the Fed in blackout, the ten-year's direction this week rests more on oil and the earnings tape than on the data.
The third is Canada. Today's inflation report is the last major input before the Bank of Canada's decision next week, and the market gives a rate rise a bit more than a one-in-three chance. A headline print at or above consensus with firm core measures could lift that pricing and the Canadian dollar; a soft core reading would do the opposite.
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Tags: Nasdaq futures rebound, China Q3 GDP 2026, BoJ Ueda inflation, ECB December rate hike, Russian energy sanctions waiver, CoreWeave bonds, Canada CPI September 2026, RBA Kent labour market