EMEA Morning Briefing: Fed's Warsh Avoids Signal on October Rate Move

MARKET WRAPS

Watch For:

Eurozone CPI, foreign trade; trading update from Schneider Electric

Opening Call:

European stock futures rose early Friday. Asian stock benchmarks advanced, tracking U.S. gains overnight; the dollar fell; Treasury yields were little changed; oil futures fell; gold rose.

Equities:

Stock futures point to a higher open in Europe on Friday, with sentiment likely boosted by a rebound in U.S. and Asian stocks.

"U.S. stocks bounced after a drop fueled by concerns about the sustainability of the AI trade, with attractive valuations and solid corporate earnings luring bargain hunters," Commonwealth Bank of Australia's Ryan Felsman.

On Friday morning in a moderated conversation at the meetings of the International Monetary Fund in Bangkok, Federal Reserve Chairman Kevin Warsh declined to endorse or push back on colleagues' recent signals that officials are in no rush to raise interest rates this month, saying the central bank was no longer in the business of previewing its decisions.

"I don't prejudge meetings. I don't believe in saying now what I might do at the meetings we have," Warsh said.

Forex:

EU leaders are meeting to consider the next steps in cutting the large trade deficit with China, and the European Commission has begun evaluating trade data as a first step toward replicating a cap on Chinese hybrid car imports in other sectors, said CBA's Carol Kong.

"The risk is the EU imposes further trade restrictions on China, triggering a trade war that will weigh heavily on EUR," she said.

Bonds:

The dash to Treasuries, and their safe-haven status, makes perfect sense against weakness in the AI trade, which has taken blow after blow the past week. "Ground zero was the AI buildout's balance sheet," said Jeff deGraaf, CEO and Renaissance Macro Research.

But the bond market won't be the place to park for a long time. "A Middle East deal after the midterm elections could push yields lower via lower oil prices, but the fundamental direction of travel for rates remains higher, especially with ongoing fiscal challenges and heavy Treasury issuance," said Torsten Sløk, chief economist at Apollo Global Management.

Energy:

Oil fell in Asia, weighed down by the International Energy Agency's announcement to release crude oil and diesel fuel.

The IEA said Thursday that the volume of emergency oil stocks being released by member countries would exceed the 400 million barrels agreed upon in March. Members have pledged to expedite the remaining releases of around 100 million barrels, including over 20 million barrels of diesel, the IEA said.

Metals:

Aluminum prices have moderated from their recent highs, said Alcoa CEO Bill Oplinger. Still, pricing remains supported by constructive market fundamentals, he added.

"On the supply side, production is gradually recovering as Middle East smelters restart and Indonesian capacity ramps up," Oplinger said, adding that the timing of a full recovery to pre-conflict production levels in the Middle East remains uncertain.

"Global aluminum inventories remain historically low at approximately 42 days of consumption, leaving the market with limited capacity to absorb further supply disruptions or stronger-than-expected demand," Oplinger said. Iron ore rose in Asian trade after recently trading below $90 a ton for the first time since 2024 as fundamentals continue to weaken. Better investor sentiment across different assets and markets after a sharp selloff in the previous session likely provided some support.

However, Chinese crude steel output remains low amid thin margins for steel mills. As a result, there is no incentive to rebuild inventories of the steelmaking raw material, ANZ said.

TODAY'S TOP HEADLINES

Warsh Avoids Signal on October Rate Move

Federal Reserve Chairman Kevin Warsh declined to endorse or push back on colleagues' recent signals that officials are in no rush to raise interest rates this month, saying the central bank was no longer in the business of previewing its decisions.

"I don't prejudge meetings. I don't believe in saying now what I might do at the meetings we have," Warsh said. "It's a new chapter at the Fed, and we're not in that business anymore."

The Riskiest Corner of the AI Trade Is Crashing Into Higher Rates

Investors staring down a world of higher borrowing costs have kept piling into AI with the belief that companies behind the globe-spanning data-center build-out would be immune. But there are exceptions-none more prominent than CoreWeave.

The Nvidia-backed compute provider has become a weather vane for one of the riskiest-and most highly leveraged-corners of the AI trade. This week, it endured a tornado.

AI Runs Into Its Next Big Obstacle: Insurance

A string of artificial-intelligence safety incidents is exposing a gaping hole for the fast-growing industry: the lack of available insurance.

Rogue agents have hacked into websites. AI chatbots have been accused of encouraging suicides and murders. An agent submitted fake unsolved murder tips. The latest episodes add to existing lawsuits AI companies face alleging chatbot harm and copyright violations when models are trained.

Inside Porsche's Revival Bid: Pricier Cars, Tougher Bonuses and Less Remote Work

Porsche's new chief executive Michael Leiters had an unfamiliar message for staff: Bonuses should reflect performance.

At employee meetings this summer, Leiters said the sports-car company's annual payouts-for years among the most generous and reliable in the German car industry-weren't a given, and they would depend on a recovery in the company's profit for which everyone was individually responsible, according to attendees. One way to achieve this, he said: Staff needed to be in the office more.

Brunello Cucinelli Nudges Up 2026 View, Bucking Luxury's Weak Trends

Luxury-fashion company Brunello Cucinelli again lifted its sales expectations for the full year on the back of continued momentum, contrasting with lackluster performance elsewhere in Europe's luxury-goods sector.

The Italian group, known for its cashmere garments, said Thursday that it now expects sales for the year to rise by 12% at constant exchange rates from the 1.41 billion euros ($1.57 billion) it booked last year. Cucinelli had previously guided for 10%-11% growth, guidance that was itself expanded from an initial target of 10%. Sales next year should grow by around 10%, the company said.

Netflix Replaces Content Chief as It Struggles to Engage Viewers

Netflix's Chief Content Officer Bela Bajaria is leaving the company, as it struggles with slowing growth and falling customer engagement.

Bajaria, who had been at Netflix for a decade, will be succeeded by Peter Rice, a former executive at 21st Century Fox and Disney, Netflix said Thursday.

Meta and Apple, Longtime Foes, Team Up to Put Open-Weight AI on Macs

Mark Zuckerberg has battled Apple ever since the early days of the iPhone. Now artificial intelligence has brought the two fierce rivals together.

Meta Platforms said Thursday that it was releasing a new open-weight AI model and collaborating with Apple to run it locally on the company's high-end Mac computers. The tech giants' partnership gives developers another American-made AI option to power research projects, app development, video production and more.

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Expected Major Events for Friday 06:00/SWE: Sep Labour Force Survey

07:00/CZE: Sep PPI

07:00/SVK: Sep Harmonized CPI

07:00/AUT: Sep CPI

07:00/SPN: Aug Industrial Orders & Turnover

08:30/UK: Jul Card Spending statistics

09:00/ITA: Sep CPI

09:00/EU: Aug Foreign trade

09:00/MLT: Sep Harmonised CPI

09:00/EU: Sep Harmonised CPI

10:00/IRL: Aug Goods Exports and Imports

10:00/ITA: Aug Foreign Trade EU

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(END) Dow Jones Newswires

October 16, 2026 00:25 ET (04:25 GMT)