US-China headlines:
Trump-Xi meeting just about covers the dots, but was it really “amazing”?Trump: The meeting with Xi was amazingTrump confirms visit to China in April next yearTrump: China agreed to continue flow of rare earth, critical minerals openly and freelyUS Bessent: Xi said that he could agree to US-China consensus reached in MalaysiaBessent says hope to have a firm Fed chair candidate by ChristmasChina confirms will pause rare earth export control measures for a yearChina president Xi: US-China relations maintain overall stability
BOJ aftermath:
USD/JPY eyes upside breakout on Ueda press conferenceBOJ governor Ueda: Want to see early momentum of spring wage negotiationsBOJ governor Ueda: We need more data in deciding to adjust degree of monetary easingBOJ governor Ueda: No preset ideas about timing of next rate hikeBOJ governor Ueda: Easy monetary conditions will continue to support the economy
Euro area economic data:
Eurozone Q3 preliminary GDP +0.2% vs +0.1% q/q expectedGermany Q3 preliminary GDP 0.0% vs 0.0% q/q expectedFrance Q3 preliminary GDP +0.5% vs +0.2% q/q expectedItaly Q3 preliminary GDP Q/Q +0.0% vs +0.1% expectedBavaria October CPI +2.2% vs +2.4% y/y priorSpain October preliminary CPI +3.1% vs +2.9% y/y expectedEurozone September unemployment rate 6.3% vs 6.3% expectedGermany October unemployment change -1k vs 8k expected
Markets:
USD leads, JPY lags on the dayEuropean equities lower; S&P 500 futures flatUS 10-year yields up 4.1 bps to 4.098%Gold up 1.1% to $3,974.46WTI crude oil down 0.6% to $60.13Bitcoin down 1.5% to $109,824
If there’s one phrase to sum up the meeting between Trump and Xi today, my pick would be much ado about nothing.
For all the hype surrounding the their first face-to-face meeting since 2019, there wasn’t too much in it at the end. Trump as usual tried to play it up, calling the meeting “amazing” and rating it a “12 out of 10” meetup between the two leaders. But as the dust settles, it seems that all we’re reverting to is back to the regular scheduled programming from before October.
China pledged to hold off rare earth export controls, for now at least, while stepping up agricultural purchases – in particular soybeans. On the latter, it wouldn’t be the first time that promise is made and broken, as we have seen dating all the way back to 2018. So, I wouldn’t hold my breath on this being a change in China’s game plan.
It seems that the idea by Beijing is to ride out the Trump storm and they at least will get through a quarter of the way there by the end of this year.
On the US side, they agreed to lower fentanyl tariffs by 10% and that brings China tariffs down to 47% from 57% before. And that’s about it really.
The risk mood was more tentative as investors are not quite feeling all too bullish about the meeting aftermath. Of course, Wall Street might have other ideas later but Nvidia’s Blackwell chips were completely ignored during the meeting so that’s a bit of a setback.
US futures didn’t get up to much, hovering near unchanged levels and being marginally lower or higher during the session. Meanwhile, European indices are holding lower with month-end shenanigans also in play.
In the major currencies space, the Japanese yen is the big mover as it tumbled after BOJ governor Ueda’s press conference. Ueda kept resorting to making excuses in not confirming any rate hike plans, pointing to US tariffs to wanting to wait for more data and also the spring wage negotiations next year to be more assured. That despite him denying that Takaichi’s premiership is an influence to the central bank’s thinking. Pfft.
USD/JPY surged higher from 153.10 to break to its highest levels since February, climbing all the way past 154.00 now and up nearly 1% on the day.
The rise is also helped slightly by a firmer dollar, with the greenback keeping steadier across the board after the overnight gains on a less dovish Fed.
In other markets, gold tried once again to climb above the $4,000 mark but is met by resistance from key near-term levels and that is keeping things in check for dip buyers on the day so far.
It’s on to the ECB next and also looking at how market players will take to the Trump-Xi meeting aftermath. But don’t forget, month-end flows will also have the potential to make things a bit messy as we look to round off the week tomorrow. I’ll be off on Friday but if you’re attending TCGKL this weekend, you might be able to spot me there. Have a good one, everybody!
This article was written by Justin Low at investinglive.com.