BOTTOM LINE 15 SEC
- The strike decision is live today and it is a coin-flip by design. Trump on Saturday: “There’s a possibility I will. There’s also a possibility we’ll have a nice big beautiful agreement.” Nothing has been priced for either branch — oil futures do not reopen until 09:00 AEDT Monday, one hour before the ASX opens. Brent’s last print is still Friday’s $116.72 settle.
- Araghchi just put a permanent floor under the war premium. “Whether there is war or not, our policies remain the same… the management of the Strait of Hormuz will no longer be the same.” That is the most important sentence of the weekend: it says even a deal does not restore pre-war transit, so the risk premium is now regime, not event.
- The Hormuz offer exists, and was denied inside 24 hours. Iran’s ambassador to Pakistan says Tehran offered to reopen the strait if Washington lifted its naval blockade (AP). Tasnim calls the Al Arabiya version “lies and fantasy”; Mehr says no proposal was conveyed at all. Iran’s formal position is unchanged: seven conditions, reopen on day six, talks on day seven.
- The physical market is ~$17 tighter than the futures print. The IEA’s October report puts Dated Brent at ~$134/bbl against a $116.72 front future. Futures are not the clearing price for physical barrels — and that gap, not the headline, is the real supply signal.
- Gold is below $4,000 into a four-year oil high and a live strike window. Spot $3,993.96 (−0.77%), flat near $3,994 over the weekend. Fifth consecutive non-confirmation: this is a supply-specific oil shock, not a systemic risk event.
- Kinetic escalation continued through the weekend without a US strike. Saudi Arabia intercepted 10 ballistic missiles plus a cruise missile over Khamis Mushait on Sunday; Riyadh’s King Khalid airport reopened Terminals 1–2 today while the Houthis declared it a “military target”; Taiz is besieged with 800,000 trapped; Iran downed a US LUCAS drone over Bandar Abbas.
Fed Funds
3.75–4.00%
16 Sep +25bp, unanimous
Next FOMC
28 Oct
Decision 05:00 AEDT Thu 29
Hold priced
~90.4%
Hike 9.6% · implied 3.90%
Dec 9 cumulative
72.8%
+20.6bp · implied 4.08%
Oct vs Dec
The October meeting is priced as a non-event (9.6% hike); the live risk has slid to 9 Dec at 72.8% cumulative. Polymarket “another Fed hike in 2026” sits at 77%. A hold on 28 Oct is not a pause — it is a deferralUS 10Y
4.999% (+4.6bp Fri) — retraced part of Thursday’s −19.3bp, the biggest one-day drop since 10 Mar 2023. Peak 5.3645% on 7 Oct, the highest since April 2002Curve
30Y 5.327% · 5Y 4.812% · 2Y 4.686% · 3M 4.139% · Bund 3.346% · JGB 2.805% · UK 10Y 5.369%Dot vs market
SEP medians: GDP 2.3 · PCE 3.7 · core 3.4 · unemployment 4.1. 16 of 18 dots see at least one more hike; Warsh submits none. The committee and the curve still point opposite waysBlackout
In force since Sat 17 Oct — no Fed speakers this week. The 28 Oct statement is the only communication, and it lands with Brent at a four-year highECB — Thu 29 Oct
Depo 2.50% / MRO 2.65% / MLF 2.90% (hiked 10 Sep, effective 16 Sep). ~93% hold; new staff projections are the event. ING: the French fiscal crisis and higher bond yields are already doing the tightening for themPBOC
LPR 3.00% / 3.50% — held 20 Oct, 17th consecutive month. Next fixing ~20 Nov. The Central Committee plenum runs Mon 26 – Thu 29, which outranks the LPR as a signal this weekImplication: the October hold is priced at ~90% and is not the story — the statement’s energy language is. A hold that declines to acknowledge a four-year Brent high reads as a dovish surprise into a market already pricing a 72.8% December hike; a hawkish dissent reads as confirmation the Warsh put is gone for good. For the book, the operative fact is that the December meeting, not October, is where duration risk sits — and it lands five days before the RBA decides.
Cash Rate
4.60%
29 Sep, 4th hike, unanimous
Next Meeting
3 Nov
Melbourne Cup Day
Hike odds
56%
ASX 23 Oct · cbw 54% (25 Oct)
Q3 CPI
Thu 29
11:30 AEDT · trimmed 3.6% exp.
Odds path
22% (20 Oct) → 51% (21 Oct) → 62% (22 Oct) → 56% (23 Oct) → 54% (25 Oct). Two consecutive declines off the 62% peak. ASX November contract 95.275; centralbank.watch prices +13.4bp at this meeting and 19bp over threeCurve
Implied peak 4.875% in May 2027, easing to 4.705% by Mar 2028. Zero cuts priced before 2028 — the market prices a long plateau, not a pivotQ3 CPI preview
CBA expects trimmed mean unchanged at 3.6% with CPI +1.0% q/q; fuel and services carry the pressure. August was 4.0% headline / 3.6% trimmed. This print decides 3 NovSpeakers
Kent (19 Oct) questioned whether 4.60% is restrictive at all, citing higher global neutral rates — a hawkish tell that the Board’s own estimate of restraint may be too generous. RBA Senate appearance Wed 28 OctAUD/USD
0.7027 (Sunday) after +0.2% Friday. Firming while hike odds fall — the “bad hike” premium (a hike forced by imported energy inflation) is unwinding, not a growth bidHousing
Sep HVI −1.1% MoM, sixth straight fall, −5.2% from the March peak. Advertised supply 5.7% above average, gross yields 3.56%. Oct HVI early NovemberImplication: hike odds have softened for a reason that is not disinflation — the market is marking the energy shock as a growth tax rather than a demand signal. That reading breaks on Thursday: a 3.6%-or-better trimmed mean with visible fuel pass-through makes 3 Nov live again and turns a “hold” into a credibility question. For the Big-4 book, a hike is margin-positive and credit-negative; a hold alongside 4.0% headline CPI is the worst of both, because margins stay compressed while funding costs do not.
TWII
46,041
−1.81% Thu · closed Fri
PLA tempo
LOW
5 PLAN + 8 official ships, 25 Oct
Risk Level
MODERATE
Military calm, tech controls hardening
Reopening
TWSE reopens Mon 26 Oct after two unpriced sessions — closed Friday for the Restoration Day long weekend, with Typhoon Champi having shut much of the island Thursday–Friday (1 dead, 500+ injured, ~1,000 flights cancelled). It has marked neither Thursday’s SOX −6.72% nor Friday’s +0.44%. Week to date −1,069 points, third straight down week. The sharpest catch-up risk in AsiaPosture
Taiwan’s MND reported 5 PLAN ships and 8 official ships around the island as of 06:00 Sunday — low tempo. September ADIZ activity ~181 sorties. Revised mobilisation law effective 1 OctTSMC
3Q26 revenue NT$1,494.24bn (+50.9%), gross margin 66.4%, Q4 guide +58–61%. The ADR trades as a semiconductor, not as a company — which is why a Taiwan Strait risk premium is not visible in its priceControls
Taiwan will criminalise unauthorised exports of AI chips and AI servers to China under the Foreign Trade Act (Minister Kung, 12 Oct). China’s counter-draft restricts ~40 categories. Architecture hardening in both directions while the military picture stays quietNext 90 days
1) Monday’s two-session catch-up on TWII. 2) The Xinhua plenum readout Thu — any cross-strait language. 3) Whether Taiwan’s export-control bill is tabled before year-endImplication: the risk here is now commercial, not kinetic. Both sides are building legal architecture to weaponise the AI supply chain, and Monday’s TWII reopening is a pure technical repricing event with no new information in it. TSM is 6.8% of the book; the exposure that matters is not an invasion scenario but an export-control regime that prices AI servers the way rare earths are priced now.
Brent (settle)
$116.72
+3.14% Fri · 4-yr high
Brent–WTI
$13.45
>$8 = dual-chokepoint
Dated Brent (IEA)
~$134
Physical premium ~$17
The physical gap
The IEA’s October report puts Dated Brent at ~$134/bbl at time of writing against a $116.72 front future, with September’s average at $116.89 (+$26.17 m/m). That ~$17 gap is the number the wires do not carry: the futures curve is understating the cost of an actual barrel, exactly as the compressed front spread has all monthSupplies
IEA: Gulf crude exports 13.9 mb/d in September (+4.4) — over 75% of pre-war; Hormuz flows 10.9 mb/d (+3.7) on ship-to-ship transfers; bypass exports 5.6 mb/d (+0.97) as East-West pipeline flows returned. Global supply 102.3 mb/d. But inventories are −509mb versus end-February — the recovery has been financed by drawing stockDiesel — the CPI channel
Heating oil $4.98 (+107.41% YoY), gasoline $3.21 (+67.53%). IEA: diesel accounts for 25% of the entire demand decline, and gasoil/diesel tightness extends into 2027. This is the line that reaches Australian CPI and US PCENat gas — divergence
US front $2.64 (−5.58%), a two-month low, −21.66% m/m. EU gas €93.74 (+192.8% YoY), UK +186.4%. A two-price world: American molecules are cheap, European and Asian ones are notMetals
Copper $6.476 (+1.78%), the only metal up Friday and +27.14% YoY — grid and AI-capex demand. Gold below $4,000; silver $53.71 (−1.92%, −15.6% m/m); iron ore $90.83 (−13.8% YoY)⚠ Data trap
BZ=F printed $111.70 (−1.3%) against a $116.72 settlement — that is the late-October contract roll, not a move. Use the Trading Economics / exchange settlement. Separately Urals printed $106.24 for a third identical day — stale, do not derive a discount from itAI energy
Iran has drawn up plans to target Gulf subsea communications cables and has publicly named data centres and AI facilities as legitimate targets (Reuters 23 Oct; Rezaei). First conflict in which Gulf AI infrastructure is a declared military objective rather than collateralImplication: the oil complex is pricing a chokepoint story in futures and a shortage story in physicals. Anything above $115 keeps diesel’s +107% feeding Q4 CPI with a two-month lag, which is precisely the window the December Fed meeting and the February RBA meeting sit in. The supply chain add-on is new and under-priced: subsea cable and data-centre risk is a direct input to Gulf AI capacity, and it is uninsurable in the normal market.
Hormuz
CLOSED
Contested · Day 238 of closure
Crisis Pressure
88/100
Extreme · flat 24h
Escalation Fcst
62/100
High · +1 in 24h
War-risk cover
32.0×
Pre-crisis multiple
The decision
Trump, Saturday: “There’s a possibility I will. There’s also a possibility we’ll have a nice big beautiful agreement.” He added the condition that matters: “They want to make a deal. But the problem is, will they hold the deal?” The Hill reports CENTCOM follow-up strike options are ready and timed after the 3 Nov midterms; the WSJ reports the USS George Washington CSG loading munitionsWeekend kinetics
Saudi intercepted 10 ballistic missiles toward the south plus a cruise missile over Khamis Mushait (Coalition spokesman al-Malki). Riyadh’s King Khalid airport resumed Terminals 1–2 today after a two-week closure from an attack that killed 13 — and Houthi spokesman Saree immediately declared it a “military target” and warned airlines off. Houthis also struck Aden airport and a coastguard baseYemen
Taiz besieged — Houthis advancing on Jabal Sabr, the Aden road cut, 800,000 people trapped; the UN says time is running out and warns of cholera. A Saudi-backed counteroffensive (Operation Yemeni Dawn, from 5 Oct) is trying to retake the Bab al-Mandeb coast. The Red Sea chokepoint is now a ground war, not just a missile campaignIran’s posture
Downed a US LUCAS drone over Bandar Abbas; IRGC spokesman Mohebbi warns of an “apocalyptic war” and “scorched earth”; FM Araghchi: “nothing will be the same as it was before” and Hormuz management “will not remain as it was”. DNI Clayton memo: Iranian lethal plotting against US citizens has reached “advanced stages”Diplomacy
The offer/denial pair, same weekend: Ambassador to Pakistan Moghadam says Tehran offered to reopen Hormuz for a lifted blockade (AP, via Field Marshal Munir’s shuttle); Tasnim calls it “lies and fantasy” and says Iran “fundamentally does not accept any equation of Hormuz in exchange for the blockade”; Mehr denies any proposal. Formal track unchanged: seven conditions, reopen day six, talks day seven. Pezeshkian visits Moscow next weekPhysical strait
4 transits on 18 Oct = 5% of the 85/day norm (PortWatch lags). 57 sanctioned vessels in the Gulf in 12h; 264 high-risk / 185 moderate of 1,938 tracked; AIS-dark readings treated as a floor, not an evasion tally. Normalisation odds <1% by 31 Oct, 6% by 30 Nov, 12% by 31 Dec. Pump price on a further spike $5.08/gal versus $4.31 todayContainers
5 of the 9 largest lines have stopped Hormuz service; 8 rerouting via the Cape. Maersk charging a $1,000/container transit fee. Lloyd’s JWC Listed Areas unchanged since 16 SepImplication: the escalation ladder has one rung left that matters — strikes on the Iranian mainland — and the weekend added a new vector beneath it in Gulf cables and data centres. Two asymmetries govern the oil response: a strike is already half-priced by a $13.45 Brent–WTI spread and 32× insurance, so the downside on a deal is larger than the upside on a strike; but Araghchi’s “Hormuz will not be the same” caps how far any deal can rally the downside. Risk level: CRITICAL.
China — plenum
Central Committee plenum, Beijing, Mon 26 – Thu 29 Oct. Closed-door, ~300 members, delegates confined to the venue; official theme is party discipline, with personnel deliberations expected. No news until the Xinhua readout on Thursday, then a fuller document days later. Sets the tone for the late-2027 party congress — and is the week’s biggest unhedgeable Asia eventUS–China — 16 days
The 10 Nov cliff remains asymmetric. The US side rolled: Bessent extended the tariff suspension to 10 Jan 2027 on 23 Sep. China’s side did not: MOFCOM Announcements 55–58, 61, 62 are still formally dated 10 Nov 2026 with no published matching text. Rare earths, processing equipment, lithium batteries, graphite anodes and superhard materials lapse in 16 days absent a decreeIsrael — Tue 27 Oct
General election. Netanyahu vs Gadi Eisenkot in a tight race; the reported post-midterm strike plan is timed against this political clock, and a change of government is the single most plausible route to a durable Iran de-escalationFrance
400,000+ protesters, ~1,000 arrests this weekend; curfews in sensitive Paris districts; Macron’s final months described as a “slow agony”. CAC −0.36%, Athens −2.22%. ING argues the fiscal crisis and higher yields are already tightening euro-area conditions — which is why the ECB holds on Thursday regardless of HICPUkraine
Belgorod strike killed 3 and injured 14; Russia hit a cargo vessel bound for Chornomorsk; 616 drones downed over Russia overnight. ISW: Ukraine’s intermediate-range campaign is now aimed squarely at Russian and occupied energy infrastructure. Grain and diesel supply remain the transmission channels to watchUS politics
Trump approval at a record-low 31% (Reuters/Ipsos), Democrats +12 on the congressional ballot. Midterms Tue 3 Nov, the same day as the RBA. A loss of either chamber changes the Iran decision timetable that The Hill reports
S&P 500
7,623.68
−0.52% Fri
Nasdaq
25,955.34
−0.21% Fri
Dow
52,215.16
−1.23% (−653 pts)
SOX / NDX
10,779 / 28,958
+0.44% / −0.00%
⚠ No session
Every number below is Friday’s close. US cash has not traded since 23 Oct; ASX and Asia likewise. Equity futures reopen 22:00 UTC Sunday (09:00 AEDT Monday), oil at the same time — so the first genuine price of the weekend is one hour before the ASX openUS Friday
S&P 7,623.68 (−0.52%), Nasdaq 25,955.34 (−0.21%), Dow 52,215.16 (−1.23%, −653 pts), Russell 2,775.90 (−0.29%), NDX flat, SOX +0.44%. VIX 19.45 (+2.21%). ES 7,659.75 (−0.58%), NQ 29,117.75 (−0.08%)Asia Friday
KOSPI 5,550.30 (+0.30%) — the index masked an 8%+ fall in SK Hynix after it scrapped the Solidigm IPO; Nikkei 62,693.16 (−0.34%); HSI 23,093.37 (+0.69%); Shanghai 3,690.48 (+0.89%); Shenzhen 11,673.83 (+2.79%); ASX 200 8,795.20 (+0.02%)Taiwan
TWII 46,041.43 (−1.81%) — that is Thursday’s close. TWSE was shut Friday and reopens MondayEurope Friday
FTSE 10,690.36 (−0.32%), DAX 25,181.65 (−0.75%), CAC 7,782.82 (−0.36%), STOXX 600 635.77 (−0.31%), Athens −2.22%Rates / FX / Metals
US 10Y 4.999% · DXY 101.81 (+0.20%) · EUR 1.1204 · USD/JPY 156.81 (−0.83%) · AUD/USD 0.7027 · Gold spot $3,993.96 (GC=F $4,007.90) · silver $53.71 · copper $6.476Movers worth naming
Two-sided sector pairs, not “mixed”: tower REITs CCI +9.06%, AMT/SBAC ~+6%, against carriers T −7.96%, TMUS −7.72% — SpaceX leasing 80,000 cell sites. Cyber CRWD +8.25%, PANW +7.22%; oil services SLB +7.08%, HAL +5.21%; fuel cells BE −11.24%
| Symbol | Shares | Price (USD) | Fri % | AUD Value | Cost (AUD) | P&L% |
|---|
| MSFT | 30 | $524.51 | +0.66% | A$22,393 | A$17,179.12 | +30.3% |
| META | 18 | $642.62 | −0.96% | A$16,461 | A$15,237.70 | +8.0% |
| RDDT | 69 | $144.25 | −4.00% | A$14,164 | A$15,536.50 | −8.8% |
| MU | 8 | $877.55 | +2.46% | A$9,991 | A$7,664.85 | +30.3% |
| QQQU | 113 | $58.88 | −1.19% | A$9,468 | A$18,258.53 | −48.1% |
| TSM | 13 | $418.51 | +1.49% | A$7,742 | A$7,271.14 | +6.5% |
| AVGO | 11 | $321.68 | −0.48% | A$5,036 | A$6,507.35 | −22.6% |
| CBRS | 19 | $110.82 | +1.73% | A$2,996 | A$7,921.54 | −62.2% |
| TSXU | 11 | $45.31 | +1.96% | A$709 | A$8,591.11 | −91.7% |
| US BOOK | — | — | — | A$88,960 | A$104,167.84 | −14.6% |
Total Portfolio
AUD/USD 0.7027 · AUD_per_HKD 0.181459 · US Fri 23 Oct / HK Fri 23 Oct closes
A$113,967.91
+0.01% d/d (FX only) · +9.41% vs A$104,167.84 deployed
Gate passed. The total reproduces Saturday’s A$113,952.25 to +0.01%, and every one of the nine US positions lands within 0.02pp of the prior run — the only movement is FX (AUD_per_USD 1.422888 → 1.423077). That reproduction is the verification, and there was no session to change anything. US sleeve A$88,960 (−14.6% vs cost) · HK sleeve A$25,008 (no cost basis).
The week’s real event
This is Big-Tech earnings week and the book is 100% exposed to it. MSFT reports Wed 28 Oct after the close (A$22,393 = 19.6% of the book); GOOGL the same evening; AMZN Thu 29. META already reported on 21 Oct (revenue $64.6bn, +26%; EPS $3.83 after a legal charge; strong Q4 guide) — there is no META print this week, and any calendar claiming otherwise is an evergreen pageMSFT A$22,393 (+30.3%)
The book’s anchor and its largest single-name risk into Wednesday. A +30% cushion is a cushion against price, not against a capex guide: the market has spent October charging spenders, and MSFT is now the largest spender reporting this weekMU A$9,991 (+30.3%)
Held its +30% on the Solidigm read-across. Note the classification: a competitor losing its capital-markets exit is a relative gain, not a memory-pricing gain — Korean memory sold on the same headlineMETA A$16,461 (+8.0%)
Reported and beat, yet the cushion is down from +17.3% three sessions ago. Capex floor +$5B, non-voting stock issuance, default insurance at a record. A good quarter did not arrest the derating — that is the tell for the whole AI-spender cohort this weekRDDT A$14,164 (−8.8%)
−4.00% Friday, the worst non-leveraged US name. Ad beta into a risk-off tape with Brent at $116.72 — no energy, no defence, no inflation pass-throughWrappers TSXU / QQQU
TSXU A$709 (−91.7%) and QQQU A$9,468 (−48.1%) are now too small to hedge and too damaged to average. They are funding-cost instruments: they reprice on AI credit, not on AI earnings, which is why they broke first in October. Reconcile against issuer NAV; do not treat Friday’s +1.96% as recoveryThe structural gap
Zero energy exposure into a four-year Brent high, and ~100% AI-factor. Friday’s two best sectors — oil services (SLB +7.08%, HAL +5.21%) and cyber (CRWD +8.25%, PANW +7.22%) — are both unheld. If the weekend resolves toward a strike, this book has no natural hedge in itTail specific to this book
Iran’s declared targeting of Gulf subsea cables and AI data centres is the one war scenario that hits AI infrastructure directly. The book’s AI exposure is to compute economics — a cable or facility event is a different, unhedged risk
1 · Today / Monday
Highest priority: the Iran decision. Trump has explicitly left a Sunday strike open. Oil and equity futures both reopen 09:00 AEDT Monday — the first genuine price. Watch Brent’s opening gap against the $116.72 settle, and whether the Brent–WTI spread widens through $142 · Mon 26 Oct
ASX 200 opens 10:00 AEDT with Brent at $116.72 — energy and miners bid against rate-sensitive banks. TWSE reopens after two unpriced sessions. China’s plenum opens in Beijing (runs to Thursday)3 · Tue 27 Oct
Israel election — Netanyahu vs Eisenkot. The political clock the reported post-midterm strike plan is timed against, and the most plausible route to a durable de-escalation4 · Wed 28 Oct
The heaviest single day. FOMC decision 05:00 AEDT Thu (hold ~90%) with the statement’s energy language as the event; RBA Senate appearance; then MSFT and GOOGL report after the US close — 19.6% of the book plus the read-across to the whole AI complex5 · Thu 29 Oct — the cluster
AU Q3 CPI (11:30 AEDT) + US Sep PCE (23:30 AEDT) + Amazon + the Xinhua plenum readout, all in one session. The CPI print decides 3 Nov; the PCE print is Warsh’s preferred gauge; the readout sets Asia’s Q4 tone6 · Tue 3 Nov & Tue 10 Nov
RBA decision (54–56% hike) and US midterms on the same day. Seven days later, China’s rare-earth suspensions lapse — 16 days from now, with the US tariff side already rolled to 10 Jan 2027