Market Daily

Equity Market Updates

Eli Lily (LLY US)

Eli Lilly’s Phase 2b trial reveals that its experimental EloraTZP combination achieved a significant 23.3% weight loss and 2.9% A1C reduction, outperforming tirzepatide. However, high discontinuation rates due to adverse events remain a key variable as the asset advances towards its next phase of development.

MARKET CONSENSUS: 30 BUYS, 4 HOLDS, 1 SELL, AVERAGE TP USD1346.07

Caterpillar (CAT US)

Caterpillar is expanding its US manufacturing footprint with a $1B investment in a new, high-tech North Carolina facility. Designed to boost compact equipment capacity and streamline operations, this highly automated plant is positioned to capture growing small-business demand over the coming years.

MARKET CONSENSUS: 17 BUYS, 11 HOLDS, AVERAGE TP USD1012.16

Eni (ENI IM)

Eni has partnered with Generative Bionics via a MoU to evaluate integrating humanoid robots into its industrial operations. This collaboration will focus on advanced robotics for inspection and remote assistance to enhance safety and efficiency, potentially driving long-term automation scaling.

MARKET CONSENSUS: 14 BUYS, 11 HOLDS, 2 SELLS, AVERAGE TP EUR26.56

Micron (MU US)

Micron capped a historic fiscal 2026 with an extraordinary 4Q surge, driven by net income climbing 10x YoY to $37.7B. With full-year revenue scaling to $133.2B, the chipmaker's structural tailwinds position it well to sustain robust operational momentum heading into fiscal 2027.

MARKET CONSENSUS: 57 BUYS, 4 HOLDS, AVERAGE TP USD1599.35

Earnings Announcements

Global Indices Changes (%)

Fixed Income Market Updates

European Bank Coco (AT1)

AT1 CoCo market opened on a stronger footing with buying flows mostly seen from Asian investors picking up recent underperformers. Nonetheless, demand for AT1 papers remained weak during the London and U.S. session given the rates volatility. French bank AT1s continued to lag peers as French OAT continued to move wider. Societe Generale's AT1s with longer dated call dates were underperformers, repricing lower along with its recently issued 8% Perpetual AT1 CoCo.  In the near-term, we think AT1s will likely continue to trade sideways, without any meaningful direction, given the lack of confidence and/or until we see rates stabilize a bit more.

Asia Investment Grade (IG)

The weak tone persisted on the last day of September but Asia IG spreads remained steady with most unchanged to a touch wider (+1-2 basis points). Secondary market trading liquidity was less ideal and gappy with most investors on the sidelines and some investors holding to positions ahead of the long holiday in China. Some investors were trying to sell duration for corporate perpetual bonds and bank subordinated bonds with tight credit spreads. We expect IG spreads to move range-bound with all-in yield buyers selectively picking up high quality bonds at better entry opportunities.

Asia High Yield (HY)

Activities in the Asia HY space were muted with low month-end flows. Bond prices were relatively stable with little mark downs. Softbank Group's recently issued bonds were mostly unchanged at close, following news of OpenAI's new round of funding plans. We remain very selective in the HY bond space and prefer to stick to higher quality short dated bonds.

Forex Market Updates

USD

The US Dollar Index has posted slight gains on Wednesday to close at 101.46 as rising US Treasury yields support the greenback, while expectations for further Fed tightening have moderated. Yesterday's core PCE Price Index came in softer than expected,at 3% y-o-y in September, below the 3.3% market forecast, whilst July’s reading was revised down to 3% from 3.3%. On the labour front, ADP private-sector employment increased by 90k, beating expectations for a 70k rise and accelerating sharply from August’s revised 36k gain. Meanwhile, US GDP growth for Q2 was revised higher to an annualized 2.2% from 1.5%, pointing to a resilient economic backdrop. Markets have adjusted to around a 35% chance of an October Fed hike, down from 71% a week ago. Attention now turns to Friday’s NFP report.

Elevated Treasury yields and firm Fed rate hike expectations could see the Dollar Index supported above 101.00 going forward.

EUR

The Euro edged lower on Wednesday to close near the 1.1330 handle as investors assessed the Eurozone’s inflation outlook. Preliminary September data showed annual inflation surging across the bloc’s largest economies, reaching 3.3% in Germany, 3.4% in France, 4.1% in Italy and 5% in Spain, increasing pressure on the ECB ahead of Friday’s preliminary Eurozone inflation report. ECB board member Isabel Schnabel also noted that resilient economic conditions could allow higher costs to pass through to consumers more quickly, although elevated global yields could eventually "dampen price pressures". OIS markets currently price around 31bps of ECB tightening by end-2026 and nearly 100bps cumulatively by end-2027, taking the terminal rate close to 3.5%. Looking ahead, markets turn to the Eurozone's final manufacturing PMIs, Eurozone unemployment data.

Despite near-term bearish momentum, we still see the Euro above the 1.1300 handle for the time-being.

AUD

The Australian Dollar faced further selling pressure yesterday towards the 0.6945 region and reached fresh two-month lows, as markets weigh Australia’s inflation outlook and the RBA’s policy path. In August, headline CPI rose 0.4% m-o-m vs consensus of 0.5% and annual inflation was at 4.0% y-o-y vs consensus of 4.1%. Trimmed mean CPI increased 0.2% m-o-m vs consensus of 0.3%. Analysts from a major European bank argued hat the latest data reinforce the case for policy patience, noting that “interest rate hikes always take effect with a certain time lag.”  Nevertheless, RBA cash rate futures are still pricing in around 36bps of tightening over the next 12 months, which could limit policy divergence with the Fed and provide some support for Aussie. Australia’s strategic exposure to commodities linked to energy, AI and defence also remains a longer-term tailwind for the Australian dollar.

Downside pressure on the Australian Dollar may persist for now, although 0.68880 should hold as a key support.

XAU

Gold prices were slightly lower on Wednesday trading around 4,200 region as US Treasury yields moved higher. The softer inflation data initially supported gold and money markets have since increased expectations that the Fed will hold rates at its October meeting as compared to a rate hike. However, near term higher yields and a firmer dollar continued to weigh on the precious metal and eventually reversed its previous gains. The Middle East conflict and oil prices remain key catalysts. With navigation through the Strait of Hormuz reportedly recovering to around 80% of pre-war levels more easing of oil prices would be constructive on the yellow metal.

Hawkish Fed rate expectations could weigh on the precious metal but we expect 4,000 to hold as a reliable floor for gold. 

Please read carefully the disclaimer here:

Asia Disclaimer: 
https://wealthmanagement.bnpparibas/asia/en/disclaimer1.html

Europe Disclaimer: 
https://wealthmanagement.bnpparibas/ch/en/disclaimer.html