Key facts
- US President Donald Trump announced an energy "ceasefire" between Ukraine and Russia.
- The announcement lacked confirmation from Ukraine and Russia.
- Analysts suspect Trump announced the deal without an actual agreement.
- Russia continued to hit Ukraine's power infrastructure over the weekend.
- Ukraine has been successful in hitting Yandex data centers in Russia.
- Brent crude oil slipped nearly 2% to around $103.00 a barrel following the announcement.
US President Donald Trump announced an energy "ceasefire" between Ukraine and Russia, a move that surprised Ukraine and lacked confirmation from Russia, according to Reuters.
Analysts suspect Trump may have announced the deal to try and make it a reality without an actual agreement, especially as Russia continued to strike Ukraine's power infrastructure over the weekend. Kyiv has been offering a ceasefire for months, but the Kremlin has not shown interest.
Ukraine has reportedly had success hitting Yandex data centers in Russia, disrupting internet services and various applications, including banking. The number of Russian bots online has also reportedly plunged.
Trump's announcement also included a proposal for Russia to increase its diesel exports to the US and global markets. However, this is seen as unlikely given Ukrainian strikes on Russian refineries, which have already impacted the country's diesel supply for its own needs. The US is also the world's largest exporter of diesel, making imports from Russia seem unnecessary, and it is illegal for the US to import energy from Russia during the ongoing war.
The potential for increased supply from Russia caused Brent crude oil to slip nearly 2% to around $103.00 a barrel in choppy trading. Trading conditions were thin due to a holiday in Japan and a partial holiday in US markets, leading to mixed outcomes: Asian shares were mostly lower, while US and European stock futures edged higher. The dollar eased slightly, and gold nudged up.
US earnings season is set to begin with major banks reporting from Tuesday onwards, with high expectations driven by AI-related profits. Approximately 70% of S&P 500 companies are scheduled to report this month, with most of the hyperscalers releasing their results in the last week of October. Average expectations are for 30% EPS growth, with AI infrastructure spending accounting for over 50% of this growth, and hyperscaler capital expenditure expected to rise 116% year-on-year. Analysts anticipate less of a boost from companies' equity stakes this quarter, though tariff refunds amounting to $69 billion in Q3 are expected to provide a tailwind to earnings.
The key economic data release this week will be US CPI on Wednesday. A headline figure of 3.7% is expected, balanced by a cooler core of 2.5%. Any upside surprise could significantly impact markets, as futures have already trimmed the chance of a rate hike this month to just 18%.
Key developments that could influence markets on Monday include appearances by First Deputy Governor of the Riksbank Aino Bunge and Fed Bank of Cleveland President Beth Hammack.