European morning quotes - Elections, central bank policies, and earnings reports will be in focus

October 26 - Wayne Cole offers a preview of today's European and global markets.

The week has not started well for right-wing politicians: Brazil's President (link) Luiz Inácio Lula da Silva successfully secured a fourth term, while Serbia's Aleksandar Vučić (link) was defeated by a protest movement led by students.

The Brazilian real had not yet begun trading, but Brazil ETF 11325.T traded in Tokyo has fallen nearly 15%, erasing the gains made when Senator Flavio Bolsonaro was leading after the first round. Bolsonaro (link) then refused to concede defeat and said he would challenge the results.

Next is Benjamin Netanyahu's Likud Party in Israel (link) (link). All three right-wing politicians have received support from President Trump, while Trump's party will also face a test with the upcoming midterm elections next week.

Apart from this, the market opened cautiously, with Wall Street futures and most Asian stock markets slightly lower. Oil prices have retreated partly due to reports that a Qatari mediator (link) arrived in Tehran on Sunday as part of efforts coordinated with the US to ease regional tensions.

However, after Houthi attacks on Saudi Arabia heightened concerns about energy supplies, Brent crude futures LCOc1 soared more than 6% last week, marking the highest weekly closing price since mid-2022.

On Friday, President Trump said the US may take further military action against Iran (link), while Tehran threatened to retaliate, including attacks on undersea cables.

These elevated energy costs mean that central bank governors meeting this week are likely to give hawkish signals even if they don't tighten policy this time. Markets are betting on rate hikes in Canada (link) and New Zealand (link) this week, while the US Federal Reserve (link), Bank of Japan (link), and European Central Bank (link) are expected to hold steady for now. 0#USDIRPR, 0#JPYIRPR, 0#EURIRPR

Earnings highlights (link) will include mega tech firms Alphabet GOOGL.O, Microsoft MSFT.O, and Amazon AMZN.O—all among about one-third of S&P 500 index companies reporting this week. Results from Intel INTC.O and SanDisk SNDK.O could also influence AI-related trades.

The market consensus for Microsoft is revenue of $90.6 billion and adjusted earnings per share of $4.73; Amazon's expected revenue is $202 billion with earnings per share of about $1.97; Alphabet's consensus revenue is $128 billion and earnings per share of $3.00.

In Asia, SK Hynix 000660.KS and Samsung Electronics 005930.KS will both report earnings this week. SK Hynix (link) also said it will announce shareholder return measures on Wednesday, responding to reports that it is considering a special dividend of about 16 trillion won (equivalent to $12 billion).

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Main dynamics that could affect market movements on Monday:

- Germany IFO survey

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