Futures Rise As CoreWeave Calms Debt Jitters, Sparking AI Rebound; Oil Jumps On Hormuz Mines

US futures are higher as a trifecta of AI catalysts, i) CoreWeave's beat-and-raise, ii) reports that Anthropic's bankers are weighing an IPO valuation of $1.5 trillion or more and iii) word that OpenAI's quarterly revenue hit $10 billion for the first time, revived the battered tech trade and helped markets shrug off Tuesday's hot CPI hangover, even as oil rebounded after Iran's IRGC claimed two tankers hit mines in the Strait of Hormuz; as a result Nasdaq futures have more than recouped Tuesday's losses while cash Treasuries, closed for Veterans Day, sit just shy of 5% on the 10Y. As of 8:15 am ET, S&P futures are up 0.9% while Nasdaq 100 futures rise 1.8% and Dow futures are up 0.2%. On Tuesday the S&P 500 recovered from its session low to close down just 0.4% at 7,521 after the hotter than expected CPI print and hawkish Fedspeak; without Nvidia and Microsoft it would have finished in the green. Premarket, semis are surging, with SOXX up 5.2% and DRAM up 8%, Nvidia is up 5.1% and the Mag 7 are mostly higher; CoreWeave jumps 13% after boosting its annual revenue forecast and easing fears about its debt-laden business (some of which we flagged last night), pushing Nebius and Marvell higher with it. The day's driver is AI (again): with hedge funds having cut risk at the steepest pace in more than a decade, positioning, not macro, is doing the heavy lifting for the tape, per Goldman's Rich Privorotsky. With the cash bond market shut, 10Y TSY futures are down about 6 ticks, indicating yields back over 5%, as Fed hike bets grow: a December 25bp hike is fully priced with some odds of 50bps, and Goldman added a third hike for March. The dollar is modestly firmer, with the Bloomberg Dollar Spot Index up 0.1% and USD/JPY briefly topping 159 for the first time since late September. In commodities, Brent snapped a two-day losing streak, rising about 2% to above $93 on Iranian rhetoric, the Hormuz mine claims and a drone attack on Russia's Ust-Luga port; gold is up 0.4% to around $4,050 and silver jumps 2.7%. Bitcoin is a touch lower around $73,600. The US economic data slate is limited to MBA mortgage applications at 7am; there are no Fed speakers on the schedule. US stock markets are open, but the bond market is closed for Veterans Day.In premarket trading, Mag 7 stocks are mostly higher: (Nvidia (NVDA) +5.1%, Tesla (TSLA) +2%, Alphabet (GOOGL) +1.2%, Meta Platforms (META) +0.8%, Microsoft (MSFT) 0%, Amazon (AMZN) -0.1%, Apple (AAPL) -0.7%)Artificial intelligence infrastructure stocks are rallying after the CoreWeave report and as reports on Anthropic and OpenAI lifted sentiment across the sector. Applied Digital +9.7%, Oracle +5.4%. Nvidia gains 3.7%, even after being downgraded to neutral at Baird as analysts wait for clarity on possible US government action tied to an upcoming congressional hearing.Astronics shares (ATRO) slide 13% after the company reported earnings per share of $1.08 for the third quarter.BrightView shares (BV) fall 18% after it forecast revenue for 2027 that missed the average analyst estimate.CareDx Inc. (CDNA) shares are up 2.9% after the stock was initiated at overweight by Piper Sandler, which cited the growth potential of the organ transplant services company.CoreWeave (CRWV) gains 15% in premarket trading after the cloud-computing provider boosts its annual revenue forecast, easing worries about the company’s financing.Globant shares are down 1.3% after Guggenheim downgraded the IT services company to neutral from buy, citing weaker growth prospects ahead.Grocery Outlet shares (GO) are down 8% after the discount supermarket chain lowered the high end of its adjusted Ebitda forecast for the full year.Intermex shares (IMXI) falls 6.4% after Western Union terminated its pack to buy the company.Mercury Systems (MRCY) rises 3.5% in premarket trading, after the defense company’s results beat expectations, prompting JPMorgan to upgrade the stock.MP Materials Corp. (MP) shares rise 3.3% in premarket trading as Freedom Capital Markets raised its recommendation on the rare earth company to buy from hold on valuation.In other corporate news, CoreWeave staged a debt-relief victory lap, raising its annual revenue forecast and promising no additional parent-level unsecured debt through 2027 (Goldman's Gabriela Borges sees it as the start of a rerating), even as it guides to a hefty interest bill; Costco declared a $30 special dividend, its first in nearly three years, plus a buyback of up to $4 billion; Western Union terminated its pact to buy Intermex; BrightView sank after a disappointing fiscal 2027 outlook; Grocery Outlet lowered the high end of its adjusted Ebitda forecast; Akamai was cut to in-line at Evercore ISI; Alibaba's chip-design unit T-Head filed for a Hong Kong IPO; and TSMC said it plans to invest in Anthropic and OpenAI after October revenue jumped.Globally, the overnight takeaway, per Bloomberg's Jan-Patrick Barnert, is that the hot US inflation print hurt the bonds investors had piled into as a hedge far more than the stocks they were hedging. Core CPI rose 0.3% in October, above estimates for a third straight month; Chicago Fed President Austan Goolsbee said the report bordered on disturbing, Dallas Fed's Lorie Logan still sees the need for at least two more quarter-point hikes, and 2Y yields jumped roughly 18bps, the most since April 2020 (as we detailed yesterday). And yet the S&P barely budged and the VIX slipped back below 20. The AI trade, left for dead a week ago, is back on the menu courtesy of CoreWeave, Anthropic's mega IPO and OpenAI's revenue milestone, while the market keeps doing what it's not supposed to do with a Fed hiking into a hot print.Another hot CPI print seemed to seal the deal for another hike: markets now fully price a 25bps move in December with some chance of more.Steven Dooley, head of market insights at Convera Australia, said Asian markets opened more positively than Wall Street's losses would have suggested; while interest rates remain the main driver for markets, he noted that AI valuations are a hot story.T. Rowe Price chief US economist Blerina Uruci argued that elevated energy and commodity prices are increasingly feeding through into core inflation and that the FOMC will need to raise rates more in 2027 than markets had previously anticipated; she does not think the latest CPI justifies a 50bp December hike, and prefers positioning for a higher terminal rate over taking a view on the immediate path.Not everyone is buying the rebound: investor Jack Selby warned that a disappointing Anthropic debut may trigger a major reversal in the AI trade, and Bloomberg's Markets Live team flagged reports that some Anthropic backers are offering portions of their IPO allocations for a fee, a warning sign for the AI narrative (see our take on the $1.4 trillion... or $1.0 trillion offering). Meanwhile, Morgan Stanley's prime brokerage desk found that global equity hedge funds cut risk at the steepest rate in more than a decade through the first week of November, which suggests the worst of the selling may be over.Goldman's Rich Privorotsky called the CPI report unhelpful, hot across the board and hard to dismiss as simple energy pass-through, with the market now pricing a December hike plus some optionality of 50bps. Yet the equity tape proved resilient: the SPX barely fell, the VIX briefly traded into the 20s but finished below 20, and with gross cut, nets historically low and investors heavily hedged, he argues positioning is a tailwind while the Fed is a headwind. On AI, he notes overnight neocloud commentary was broadly supportive, with data center capacity constraints still the main bottleneck and compute utilization tracking at elevated levels. Rates are a headwind but not yet flashing red (it is the rate of change that matters), credit is the one to watch with HY spreads chopping sideways, and absent fresh negative information he expects the volatility premium to keep decaying. His watch list for Veterans Day: the neoclouds and the next move in energy.JPM's Market Intel desk under Andrew Tyler stays Tactically Bullish, viewing Tuesday's CPI-driven move as an opportunity to reset bond yields higher to match growth of about 3.4% in Q3. The team agrees with strategist Dubravko Lakos-Bujas that the Tech washout appears to be at or near its completion, likes owning broad-based Tech and US Memory and Semis via options, and prefers playing the Tech plus Cyclicals barbell through European cyclicals given lighter positioning. JPM notes its recession basket (JPRECES) is up 14.9% since September 30 while SOXX is down 22.7% and DRAM down 32.7%; Lakos-Bujas reiterated his 8,000 year-end S&P target and sees the deleveraging as well advanced (as we noted).Goldman's desks spent the night on CoreWeave and the Fed. In London, Sean Johnstone on the TMT desk notes CoreWeave's 5Y CDS was around 1,150bp before the print and that until CDS spreads and unsecured borrowing costs stabilize or fall meaningfully, credit markets will be the driver; Nebius and Cerebras report tomorrow. Goldman economists, meanwhile, added a third 25bp hike in March 2027, pushed their first cut to December 2027 and raised their October core PCE estimate to 0.35%. In FX, Matt Atherton says GS Trading cut its short USD risk and prefers funding pro-risk longs with EUR, while still seeing yen longs as the best hedge to AI and growth concerns (as we discussed).Commenting on the overnight action, Cavendish's Roger Lee told Bloomberg that “It would appear overnight that the market feels a little bit more comfortable with the AI trade,” and that “Coreweave had some very good numbers, and the Korean market was reasonably strong overnight.” Berenberg's Ulrich Urbahn said “The AI trade is recovering on hard demand evidence rather than sentiment: CoreWeave beat third-quarter estimates and raised its full-year outlook.” Jefferies' Mohit Kumar added that “Our positioning indices suggest that both equity and credit positioning is close to neutral, which is one of the reasons we are positive on risky assets.”As tech stocks suffer, the equal-weight S&P and the Stoxx 600 are outperforming: over the past month the Nasdaq 100 has lost 10% while the Stoxx 600 has gained 4%, leaving Europe with far less damage to repair. Barclays derivatives strategists including Anshul Gupta note the Euro Stoxx 50 and the banks index remain more negatively correlated with crude than at any point in at least 20 years, while European oil and gas stocks have never been more positively correlated to oil.In Europe, the Stoxx 600 is up 0.3% at 660.51 and climbing toward a fresh record, although breadth is split with 282 members up and 291 down. Semiconductor stocks extend their rebound to a fourth day as AI sentiment recovers, with Soitec, ASML, Nokia, STMicro and Infineon among the gainers, while energy leads, bouncing from its worst losing streak since 2020 as oil rises. JPM notes the Euro Stoxx 50 is up 0.8% and the DAX 0.7%, with Energy, Tech and Materials leading and Healthcare, Retail and Real Estate lagging; thematically, AI themes, Momentum and Beta are leading. Siemens Energy surges after adding as much as €9 billion to its buyback, while CSG plunges to a record low after cutting its margin outlook. Here are the biggest European movers:Semiconductor stocks in Europe extend their rebound to a fourth day as sentiment toward the broader AI trade recovers. Gainers include Soitec, ASML, Nokia, STMicro and Infineon.Energy stocks lead gains in the region, rebounding from their worst losing streak since 2020 as oil prices moved higher following two days of declines.Siemens Energy shares rise as much as 7.9% after the company announced plans to buy back an additional €9 billion in shares through 2030, and announced targets for the medium term which analysts see as positive.Spirax shares advance as much as 4.8% as analysts say the thermal energy and fluid technology specialist demonstrated good momentum across all its businesses in today’s 10-month trading update.Intermediate Capital Group shares gain as much as 4.1% after first-half results beat expectations in key areas, with analysts highlighting stronger fee-related earnings and fundraising.CSG shares fall as much as 23% to an all-time low since a January listing after the defense firm reported revenue that missed estimates and lowered its full-year profit margin outlook.E.ON shares slip as much as 2.3%. The German utility reported few earnings surprises, leaving Deutsche Bank analysts focused on regulatory decisions that will determine future grid returns and the scope for higher investment.Vestas shares fall as much as 9.4% after the wind energy company posted earnings below expectations for the third quarter. Citi says the new guidance ranges could lead to consensus cuts at the midpoint.Alcon shares decline as much as 9.1%, the most since May, after weaker-than-expected third-quarter sales at the Swiss eye care products maker, driven by a miss in its Implantables division.ABN Amro shares fall as much as 2.8%, reversing earlier gains, after the bank reported third-quarter results. Analysts noted that strong net interest income was offset by weaker fees.Swiss Life shares decline as much as 3.1%, the most since May, after the insurer reported a Swiss Solvency Test ratio that JPMorgan sees below consensus expectations.ITV shares fall as much as 5.7% after the British broadcaster reduced its outlook for total advertising revenue in the fourth quarter, citing an uncertain macro environment that’s denting sentiment.Asian stocks rose for a third session as strength in technology shares outweighed renewed concerns over higher rates, with the MSCI Asia Pacific Index up as much as 1.7%. South Korea's Kospi led with a 2.6% gain as SK Hynix and Samsung bounced off recent lows, Taiwan's Taiex rose about 2.5% as TSMC jumped 4.8% on October revenue and its plans to invest in Anthropic and OpenAI, and Japan's Nikkei closed at 61,249 as futures-led short covering accelerated into the afternoon, with Goldman's Japan semis basket up 6.44%. That was despite SoftBank, which plunged as much as 11% after its first net loss in almost two years (and a $3.7 billion bonfire of AI power gear deposits) before paring nearly all of the drop. Hong Kong's Hang Seng fell about 1%, weighed by biotech, EV makers and Alibaba after T-Head's IPO filing, while mainland stocks recouped early losses. Australia's ASX 200 was little changed as losses in CBA offset tech gains, and Chinese government bonds dipped on a report that Beijing is sounding out a tax on interest income from sovereign debt.In FX, the Bloomberg Dollar Spot Index is up 0.1% and re-approaching Tuesday's peak, while the DXY trades in a 102.26 to 102.51 range, above the prior session's high. USD/JPY rose as high as 159.04, the highest since September 24, near its 100-DMA, keeping traders on alert for jawboning from Tokyo after PM Takaichi said she won't pursue fiscal policies that lead to excessive inflation. EUR/USD dipped 0.2% to 1.1138, the Swiss franc is the G10 laggard after the SNB said it told the government it is ready to be active in currency markets, and Korea's won gained as much as 0.9%, outperforming EM peers on the chip rally. Higher US rate bets weighed on the Thai baht, Indonesian rupiah and Philippine peso, while Hungary's forint underperformed in CEE.In rates, the cash Treasury market is closed for Veterans Day (which conveniently spares it a second day of pain), leaving futures as the only live read: 10Y TSY futures are down about 6 ticks in a 106-00 to 106-06 range, a full point below Tuesday's pre-Waller open, with the 10Y yield last at 4.99%, less than a basis point from the 5% line in the sand. On Tuesday the curve bear flattened hard, with 2Y yields up about 17.5bps and 10Y up about 10.8bps, and the 10Y auction tailed. JPM notes 28bps of hikes are now priced for December and the terminal rate rose to 4.638% from 4.404% on Monday. In Europe, Bunds pared early gains after hawkish rhetoric from Iran's Rezaee lifted energy prices, and gilts opened firmer on easing BOE bets before succumbing to the same energy-led selling; Germany sold €1.08 billion of 31-year bonds at an average yield of 3.66% with a bid-to-cover of 1.3. In Japan, the 10Y JGB yield jumped 10.5bps to 2.795%, tracking the Treasury selloff. The focus now turns to Friday's PPI, with JPM's Feroli seeing headline up 0.6% m/m and core up 0.4%.In commodities, WTI December crude is up 0.9% at $86.80 and Brent January is up 1.6% at $92.96 (after hitting a high of $93.51) as oil snaps a two-day decline: Iran's Rezaee warned that any new US attack would be met by targeting more distant US bases and said Iran won't remove any enriched nuclear material, the IRGC claimed two tankers using an unauthorized route hit mines in Hormuz, and a drone attack sparked a fire at Russia's Ust-Luga Baltic export hub. That's even as Qatar says it has secured a window of at least two weeks for US-Iran diplomacy, and as Goldman's Privorotsky notes the administration appears to favor sustained economic pressure and the naval blockade over a return to major combat; if Brent consolidates near $90 with collapsing realized volatility, equities should increasingly look through the noise. Dutch TTF gas leads the complex at about €87/MWh. Gold is up 0.4% around $4,050, silver jumps 2.7% to about $53 and LME copper is up about 1%. API data showed a 9.8 million barrel crude draw and a 5.1 million barrel build at Cushing; OPEC publishes its monthly oil market report today.The US economic data slate includes MBA mortgage applications at 7am; there are no Fed speakers on the schedule. The bond market is closed for Veterans Day while stock markets are open. Corteva reports today, and the UBS European Conference and Baird's Global Industrial Conference continue.Market SnapshotTop Overnight NewsSecretary of State Marco Rubio said the Trump administration’s economic pressure campaign against Iran was effective enough that “there’s really no need for major combat operations any longer”: NYTCoreWeave eased fears about its debt-laden business during a high-stakes quarterly report, indicating that sales growth remains strong despite challenges facing the data center industry: BBGBanks are increasingly turning to credit insurance to lay off risks tied to their data center loans as lenders seek to stretch internal limits to pour more money into the AI boom: FTUS judge said President Trump's defamation lawsuit against the BBC can proceed: RTRSUS House backed motion that derails the impeachment of Defense Secretary Hegseth: WSJSouth Korea’s antitrust regulator fined over a dozen domestic banks and brokerages a record $1.2 billion for collusion in government bond auctions over more than three years: BBGJapanese retail investors, who are sitting on a ~$7T hoard of cash, appear to be pivoting aggressively into JGBs: FTChina is sounding out lenders on a possible 25% tax on interest income from government bonds: BBGAfter Tuesday’s CPI report, Austan Goolsbee said the Fed must address inflation, calling the October CPI report “borderline disturbing”: BBGGS says the October CPI report surprised meaningfully to the upside across several categories, marking a third month of worse inflation news; the desk continues to expect a second 25bp hike in December and is adding a third 25bp hike in March 2027, which could come as early as January: GIRGS now expects a third 25bp rate hike in March, followed by gradual cuts back to 3.25-3.5% starting in December 2027: GIRUS crude inventories surged by 9 million barrels last week, the API is said to have reported, which would be the biggest gain in three months: BBGA more detailed look at global markets courtesy of NewsquawkAPAC stocks were predominantly in the green as the region mostly shrugged off the subdued handover from Wall St, where all major indices were pressured as the dollar and yields gained on hawkish Fed rhetoric and hotter-than-expected CPI data. The inflation numbers and Fed speak boosted hawkish rate hike bets, with money markets fully pricing in a December rate hike and about a 10% probability for a greater 50bps move. ASX 200 eked out slight gains in range-bound trade as the rebound in tech was counterbalanced by losses in the top-weighted financial sector following earnings from Australia's largest lender, CBA, despite reporting an 8% increase in Q1 unaudited net profit. Nikkei 225 continued to benefit alongside the global tech recovery despite weakness in SoftBank shares after it posted a H1 net loss of JPY 768bln. KOSPI clawed back initial losses and outperformed its regional peers, while the Korea Exchange activated a sidecar on the Kosdaq amid the broad resurgence. Hang Seng and Shanghai Comp were mixed, with the Hong Kong benchmark pressured amid weakness in biotech and EV makers, while the mainland gradually recouped early losses to trade in the green.Top Asian NewsChina October vehicle sales fell by 9.2% Y/Y vs prev. decline of 8.4% in September.China's NDRC said it will boost financial risk control for BRI projects and will expand BRI cooperation in emerging sectors.Japanese PM Takaichi said no intention of pursuing fiscal policies that would lead to excessive inflation and she expects the BoJ to conduct appropriate monetary policy to sustainably and stably hit its 2% price target.South Korea will extend fuel tax cuts for two months to end-January.PBoC Q3 Monetary Policy Implementation report says the central bank will implement a moderately loose monetary policy to support stable economic growthEuropean bourses (STOXX 600 +0.2%) are entirely in the green, building on the prior day’s advances. Sentiment remains firmer after trilateral talks between US-Russia-Ukraine, and with mediation efforts between US-Iran also helping. However, benchmarks are off best levels after Iran's Secretary of Supreme National Security Council warned that any new US attack would be met with the targeting of "distant" US military bases as well. He added that they will not remove any enriched nuclear material from Iran. European sectors hold a strong positive bias. Tech is the clear outperformer, taking lead from strong performance in the AI/tech space overnight, following on from strong CoreWeave earnings (detailed below). The KOSPI closed with gains of 2.6%, with SK Hynix (+5.3%) and Samsung Electronics (+3.6%) both moving off recent lows. Elsewhere, Basic Resources and Energy complete the top three. To the downside resides Food Beverage & Tobacco, albeit losses are only modest. Key Movers: Alcon (-5.6%, decent results but tightened 2026 outlook), Brenntag (-3.4%, Q3 EBITDA missed consensus), Siemens Energy (+8.4%, Net, Revenue & Profit beat, Orders miss. Increasing buyback and dividend), RWE (+0.8%, adj. EBITDA and Net Income higher Y/Y. FY Net Income seen at the upper end of the range). US equity futures are broadly firmer this morning, with outperformance in the NQ after CoreWeave brings some optimism back to the tech sector. CoreWeave (CRWV) shares +11% pre-market following stronger than expected quarterly revenue and profits, alongside upgraded FY guidance and a growing order backlog; the release highlighted robust AI infrastructure demand.Top European NewsA widening divide has opened in Eurozone sovereign bond markets between highly indebted countries like France and Belgium and safer borrowers like Germany, according to FT.NIESR sees UK inflation to overshoot the Bank of England target for the next four years.FXSnapshot: G10s are mostly lower against the USD. The Aussie fares a bit better vs peers. The Swiss Franc is the laggard today, potentially thanks to the positive risk tone, but this narrative has not been seen in the JPY.DXY is slightly firmer this morning and currently holds towards the upper end of a 102.26-102.51 range. Initial action saw the index take a breather from the hefty gains seen in the prior session following hawkish Fed speak and a hotter-than-expected US CPI report. However, the strength has since returned; DXY now trades above the peaks made in the prior session (102.41); a firm breach above 102.50 will see the index head towards the 14 Oct high at 102.94.US-specific newsflow will likely be light for today, with the region observing Veterans Day (only US bond cash trade is shut). Focus therefore will be on the geopolitical situation, on both the Ukraine-Russia and Iran-US fronts. For the former, trilateral talks have concluded, with updates expected in the coming few days as to whether any progress has been made. The US-Iran situation is a little more complicated as mediation efforts continue, but US/Iranian officials appear to be pushing back on reports of potential concessions. Any progress will be USD-negative, and could see the index return back towards its 21-DMA at 101.94.Elsewhere, EUR/USD is under modest selling pressure, and largely moving at the whim of the USD. It currently holds within a 1.1139 to 1.1170 range, and towards the lows seen last week. ECB speak today came via Nagel, who spoke solely on the German situation; he mentioned that the German recovery was stronger than forecast, adding that growth is likely to accelerate in Q4. Focus ahead will be on ECB President Lagarde.Attention remains on USD/JPY, with the pair sitting just under the 159.00 mark; the high for the day (158.98) near-enough coincides with its 100-DMA. The latest US CPI saw the pair jump to elevated levels, amidst widening yield differentials; it won’t be a surprise to see some jawboning from Japanese officials in the near-term. Overnight, PM Takaichi offered some confidence building remarks by suggesting that she will not pursue fiscal policies that will lead to excessive inflation.SNB's Schlegel says that they are ready to be active in FX markets.Central BanksGoldman Sachs expects the Fed to deliver 25bps rate hikes in December and in March vs prior forecast of a hike in December this year.Fed's Goolsbee (2027 voter) said on PBS NewsHour that CPI was bordering on disturbing and they have real issues on their hands, adds they are going to have to deal with that. Most troubling is that services inflation is not coming down. Inflation is both cost-side and demand-side driven. His fear is starting to see overall overheating prices of a whole bunch of things. At the same time, job market is steady and stable. Will have to come to terms with it if inflation stays persistent and it's a major concern if inflation gets built into expectations. Everything is always on the table and we must get inflation down to the target.Fed's Paulson (2026 voter) said Fed will move more aggressively if inflation landscape worsens, adds further gradual rate hikes are appropriate given high inflation and exact path of rate policy depends on how the economy evolves. Monetary policy needs to be somewhat restrictive. Gradual rate hikes have also given Fed officials space to gauge the impact and have given the economy time to adjust. CPI data showed inflation remains a problem. Supported Fed's recent rate decisions. Underlying inflation is stuck between 2.5% and 3%. Fed has more work to do to lower inflation. The economy is stronger than expected and job market robust and stable. AI and energy impact on inflation are hard to gauge. Risks to the inflation outlook are high.Fed's Bowman (voter) said the fact that inflation is not on a downward trend should give us pause, adds need to think about what pace and what timeline to address it. The Fed cut rates gradually last year and then paused before resuming, in same way that the Fed may work to address inflation in coming months. Inflation expectations an important data point, but not necessarily controlling how she thinks about things. Inflation expectations very well anchored. Shifting her focus to inflation. Would need to see AI and Middle East risks abate before could be confident inflation will come down next year.ECB's Nagel said German recovery stronger than forecast, adding that growth is likely to accelerate in Q4.PBoC injected CNY 187bln via overnight reverse repos with the rate at 1.25%.PBoC set USD/CNY midpoint at 6.7191 vs exp. 6.6855 (prev. 6.7167).Fixed IncomeA contained start for fixed income, rebounding slightly from Tuesday’s bearish action on US CPI and Fed speak, but with upside this morning capped as energy has an upward bias and as conditions are relatively light on account of it being Veterans Day.Nonetheless, USTs are lower by a handful of ticks, in 106-00 to 106-06 confines, and as such a full point off the pre-Waller opening levels on Tuesday. Fed speak since has largely been on the hawkish side of things, with the unsurprising exception of Bowman, but not to the same 50bps extent as Waller suggested.PPI on Friday before PCE later in the month are the main scheduled points to watch for indications on the December decision. But a hike is seemingly cemented and while there is at most about a 10% implied probability for a 50bps move, that scenario is very much an outlier.Bunds pared initial upside following hawkish rhetoric from an Iranian official, which spurred some strength in the energy complex. (See geopolitical section for details). Bunds currently hold within a 122.46 to 122.80 range. The European docket is light. No move earlier to final German CPI which was unrevised.Gilts opened on the front foot, again, unwinding some of the pressure on Tuesday. However, as with EGBs, UK paper succumbed to energy-led selling pressure. Specifics are light, domestic focus on the PM’s 10yr plan and the suggestion it may underwhelm expectations from within the Labour party itself.China is set to issue up to USD 2bln of dollar-denominated bonds in Hong Kong.Australia sold AUD 1bln in 5.00% May 2038 bonds, average yield 5.0982%, and a bid to cover 3.10.UK sells GBP 1bln 0.125% 2028 Gilt via tender: b/c 3.94x (prev. 3.76x), average yield 4.185% (prev. 4.272%)Germany sells EUR 1.931bln vs exp. EUR 2.5bln 3.40% 2047 and 2.90% 2056 Bunds.CommoditiesInitially, crude was firmer, but only modestly so. Focus on Qatar saying it has secured "at least two weeks" for diplomatic efforts between the US and Iran, though significant differences remain. Further, there was pushback from Iranian officials on this, saying claims of US negotiations and a Qatar meeting are false.At first, this kept crude around USD 92.00/bbl for Brent Jan’27, bid but well within and at the lower-end of ranges from the last two weeks, when a near USD 115/bbl peak printed. Thereafter, in a belated reaction to commentary from Iran’s Rezaei that any new US attack would be met with the targeting of “distant” US military bases and that they won’t be removing any enriched material, further strength was seen. This helped Brent to form a fresh peak, before then moving higher once again following reports that two tankers hit mines in the Strait of Hormuz. Brent Jan'27 currently sits at highs of USD 93.51/bbl.Ahead, we now await any signs of progress, or not, from the Qatari side, ahead of the potential meeting including Iranian officials and US VP Vance next week. Note, Treasury Secretary Bessent was relocated after Iranian threats, and while there has been no suggestion of this thus far, it is plausible that such threats could derail the Vance visit.Dutch TTF was leading the space before the latest Middle East reporting, and continues to do so. Currently, holding at EUR 87/MWh. Potentially driven by the lack of significant progress on the Russia-Ukraine front. Russia’s Kremlin has described EU relations as non-existent, with no intention to communicate with the bloc in Abu Dhabi. Points that, alongside some European forecasts turning colder for next week, have supported European gas.XAU is recovering from its CPI/Waller/Fed induced pressure on Tuesday. However, the yellow metal is struggling to make much upside amid the strong risk tone and USD strength. Holding around USD 4050/oz, and some USD 100/oz shy of levels earlier in the week.Base peers are bid, following the risk tone higher, though the recent USD move is potentially capping somewhat. 3M LME Copper firmer by near 1% on the day.Norway's Gassco reported unplanned outage of 5.1 mcm/day at Troll field on November 11th-12th.US Private Inventory Data (bbls): Crude -9.8mln (exp. -1.0mln), Gasoline +2.7mln, Distillate -8.0mln, Cushing +5.1mln.Trade/TariffsUS Ambassador to China Perdue said NVIDIA (NVDA) affair shows that US should stay diligent on China, adds China said it's to firmly safeguard multilateral trading system, and will uphold most favoured nation treatment. China's licensing regime for magnets is hugely escalatory. US is not getting the flow of magnets that it wants from China. US and China militaries are beginning to talk again.US Treasury Secretary Bessent said US President Trump and Chinese President Xi will meet next week in Shenzhen and then again in Miami, while he repeated call for rebalancing bilateral economic ties and he plans to join Trump for the trip to Shenzhen. Setting up a direct China channel for AI incident alerts and expects talks with China on handling AI models pre-release. US aim is to de-risk, not decouple from China.Geopolitics: IranIran's Rezaei said that any new US attack would be met with the targeting of "distant" US military bases as well, Al Mayadeen reported; will not remove any enriched nuclear material from Iran.Iran General Abdollahi warned the "US and the Zionist regime that previous blows were only the beginning of the events, and in case of any new calculation error, strikes far more deadly await them." adding, "this is a credible threat...".Iran's Foreign Ministry designated Argentina's Navy and Air Force as terrorist organisations, while it stated the designation is retaliation for Argentina's move against the IRGC.Iran's Foreign Minister Araghchi said in letter to the UN Secretary General, UNSC President and IAEA chief that Iran condemns the US announcement of the Rewards for Justice program which offers USD 20mln for information regarding Iran's nuclear programme.IRGC Rasulullah Commander said the production of missiles and UAV/drones did not stop even during the war and that they have surprises that must be displayed in the field, adds they have obtained several new technologies.IRGC Navy said "another offending oil tanker catches fire in the eastern Strait of Hormuz". "This morning, an offending oil tanker caught fire in the unsafe and prohibited area east of the Strait of Hormuz after hitting a naval mine".UKMTO announces it received a report of an incident involving a tanker in the Strait of Hormuz, adds status of the crew, damage assessment and environmental impacts are unknown at this time.US Treasury Secretary Bessent was moved to a military base in the wake of Iranian threats, according to NYT.The assessment is that Iran is expected to continue trying to carry out attacks against US military bases in Britain, while the US army continues to move planes and expensive assets between the bases, according to N12's Assaf Rosenzweig.Iraq PM visited Iran, unofficially, after meeting US President Trump, Al Akhbar reported; sources suggest that the Iraq PM carried a US proposal "confirming that the visit did not lead to results satisfying the US".US Ambassador to China said President Trump is open to nuclear talks with Russian President Putin and Chinese President Xi, adds US is concerned about indirect benefit from China in Iran war, and US is not getting enough cooperation from China on Iran.Geopolitics: UkraineTrilateral talks on a settlement to the Ukraine conflict have concluded in Abu Dhabi, according to InterfaxRussia's Kremlin said that there are no plans for contacts with the EU delegation in Abu Dhabi and there have been no such meetings; there's effectively no relation between Russia and the EU.In ongoing talks, Ukraine insists Russia end fighting before discussing European security, AFP reported citing sources.Russia said it hits a cargo vessel in the Black Sea and three Ukraine power substations.Russia local governor said drones hit the Ust-Luga Baltic seaports in Russia's Leningrad region.Russia shot down 92 drones over Leningrad region early on Wednesday.Geopolitics: OtherHouthi armed forces say that they have just successfully intercepted a Saudi F-15 fighter jet formation, preventing it from entering the airspace.Taiwan's Defence Ministry said two Chinese PLA aircraft crossed the Taiwan Strait median line into Taiwan's southwest air defence identification zone.Latvia Armed Forces said that an earlier threat in Latvian airspace has ended.CryptoBitcoin is a little lower this morning and trades around USD 73.6k, with Ethereum also moving lower towards the USD 2k mark.US Event Calendar7:00am: MBA Mortgage Applications (week ended Nov. 6), est. n/a, prior US bond market closed for Veterans Day (SIFMA); stock markets openCentral Bank SpeakersNo Fed speakers scheduled DB's Jim Reid concludes the overnight wrapInflation was back on the agenda over the last 24 hours, as a strong US CPI print and hawkish Fed comments drove a major selloff for US Treasuries. In fact, the 2yr Treasury yield (+17.6bps) saw its biggest daily jump since April 2025, surging to 4.74%, and markets even priced a modest chance of a 50bp Fed hike in December. So it was a very rough day for rates, and that in turn put renewed pressure on equities, with the S&P 500 (-0.38%) pulling back as investors priced in faster hikes. To be fair, it wasn’t all bad news, and growing hopes for a resolution in the Middle East pushed Brent crude oil (-1.17%) to its lowest since August, closing at $91.49/bbl. Moreover, positive earnings from CoreWeave have helped equities recover, with S&P 500 futures up +0.65% this morning. But even so, the bigger concern remained that inflation was becoming more persistent and couldn’t just be blamed on a few specific categories.That US CPI print drove the biggest moves of the day, with the monthly core CPI print for October above consensus at +0.30% (vs. +0.2% expected). Moreover, it was the third consecutive month with core CPI at +0.3%, and if you take those three months together, the annualised pace for core CPI is running at +3.75%. That’s the fastest pace on that measure since April 2024, so it made it increasingly difficult to dismiss this as a blip. Meanwhile, the headline CPI numbers were faster still, with monthly headline CPI at +0.35% (vs. +0.3% expected), with the 3-month annualised pace at +5.72%. Bear in mind there aren’t year-on-year numbers in this report, because last year’s CPI print didn’t happen because of a government shutdown. But overall, there was little respite in the release, with broad-based gains across the consumer basket.The CPI release got more attention than usual, partly because of comments from Fed Governor Waller a few hours beforehand. He was speaking in London, where he said that “if the October CPI inflation data out later today are similar to the past two monthly readings – with core CPI inflation around 0.3 percent or even higher”, then he thought “a 50 basis point hike in the policy rate should be considered at the December meeting”. Indeed, he also said that in those circumstances, a 25bp hike “would put our credibility at risk”. So when the core CPI print was confirmed at 0.3%, that led to mounting speculation about a larger rate hike.That impact was clear from market pricing, with the amount of hikes for a December up from 21.0bps on Monday to 27.7bps by last night’s close, and 28.5bps this morning. So in other words, a 25bp hike is fully priced in, with futures also pricing in a 14% chance of a larger 50bp move. But it wasn’t just December that was affected, with markets pricing in a more hawkish profile further out the curve as well. Indeed, the rate priced in for the September 2027 meeting was up +22.3bps yesterday, so investors had priced in almost a full additional rate hike to next year’s path. Meanwhile, DB’s own US economists have updated their Fed view, adding a rate hike in January to their profile. So they now expect three more 25bp hikes at the next three meetings (Dec, Jan and March), and you can read their latest update here.For markets, the clearest impact could be seen in US Treasuries, with yields surging across the curve. In fact, the 2yr Treasury yield (+17.6bps) saw its biggest daily jump since April 2025, the day that Trump paused his Liberation Day tariffs. And those moves extended to longer maturities, with the 10yr yield (+10.8bps) closing back at 4.99%, its highest level in nearly two weeks. Meanwhile, Fed speakers later in the session added to that momentum. For instance, Dallas Fed President Logan said in a speech that “the FOMC needs to implement at least two more 25-basis-point rate increases”, and Kansas City Fed President Schmid said that the current policy rate was “fairly accommodative”. Moreover, Chicago Fed President Goolsbee described the print as “borderline disturbing”.With markets pricing in a more hawkish Fed, that also drove a fresh selloff in US equities, though this did ease a bit as the session went on. Tech stocks underperformed, with a -5.47% drop in Nvidia leading the Nasdaq (-0.74%) and the Mag-7 (-0.83%) to larger declines than the S&P 500 (-0.38%). The broader equity mood was a bit better, however, with almost half of the S&P 500’s constituents higher on the day, and the equal-weighted S&P 500 only down -0.02%. After the close, we then heard from CoreWeave, which delivered a Q3 revenue beat ($3.66bn vs $3.56bn est.) and upgraded its full-year revenue guidance ($13.0-13.3bn vs $12.9bn est.). So that meant its shares rose by over +7% in after-hours trading, easing some of the doubt around the AI cycle. And in turn, that’s boosted optimism more broadly, with Nasdaq 100 futures up +1.40% this morning, and those on the S&P 500 up +0.65%.As all that was happening, oil prices continued to fall, as hopes continued to rise for some kind of diplomatic resolution in the US-Iran conflict. There wasn’t a single headline driving that, but several comments have pointed away from further strikes, with Trump saying on Monday that “We’re just keeping it the status quo, and we’re doing that really at the behest of countries that are their neighbors”. So with fears of an escalation receding, that helped Brent crude oil (-1.17%) fall to $91.49/bbl by the close, its lowest since August. And longer-dated futures also moved lower, with the 12-month Brent future (-1.68%) at a two-month low of $77.64/bbl.Overnight in Asia, that renewed optimism around the AI trade has boosted equities across the region, with the KOSPI (+2.27%) and the Nikkei (+1.33%) posting strong gains. Moreover, the latest data showed South Korea’s unemployment rate unexpectedly falling to a 3-year low of 2.5% in October (vs. 2.6% expected). However, there’s been a weaker performance elsewhere in Asia, with the CSI 300 (+0.02%) and the Shanghai Comp (-0.02%) seeing little movement, whilst the Hang Seng is down -0.83%. Otherwise, the hawkish repricing after the US CPI print has led to a fresh bond selloff in numerous countries. For instance, Japan’s 10yr yields are up +10.3bps this morning to 2.78%, while 10yr yields in Australia (+5.6bps) and New Zealand (+6.8bps) are also higher.Earlier in Europe, there was a major selloff for sovereign bonds too, although not quite as big as in the US. For instance, yields on 10yr bunds (+5.5bps), OATs (+7.0bps) and BTPs (+7.4bps) all saw a sharp increase. And similarly to the US, investors priced in a more hawkish ECB path for the months ahead as well. For instance, market pricing for a December hike rose from 83% on Monday to 92% by the close. And looking further out, the number of hikes priced in by the June 2027 meeting rose +10.9bps on the day to 58bps. For equities, there was a much more resilient performance in Europe, although that partly reflected a catchup to the rally late in the US session the previous day. So the STOXX 600 (+0.27%) moved higher, alongside the DAX (+0.31%) and the CAC 40 (+0.55%).Looking at the day ahead now, it’ll be a quieter one, with US bond markets closed for Veterans Day. Central bank speakers will include ECB President Lagarde, and the ECB’s Cipollone, Kazaks and Nagel. Otherwise, data releases include Italian industrial production for September.