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China PBoC Interest Rate Decision meets expectations (3%)

People’s Bank of China sets its 1 and 5 year Loan Prime Rate (LPR) rates unchanged.

The PBOC uses the reverse reop rate as its main policy rate now. Currently 1.4%.

Most lending in China is tied to the one-year LPR, while the five-year rate guides mortgage pricing. Both rates were last trimmed by 10 basis points in May.

This article was written by Eamonn Sheridan at investinglive.com.

China September rare earth magnet exports at 5,774 metric tons, down from 6,146 tons in August-customs data

• Germany, South Korea, Vietnam, the United States and Mexico are China’s top five export destinations for rare earth magnet by volume in September-customs data
• China’s September rare earth magnet exports to the United States fell 28.7% from August-customs data

This article was written by Eamonn Sheridan at investinglive.com.

US President Donald Trump said over the weekend that he wants China to buy soybeans at least in the amount they were buying before. Trump added that he believes China will make a deal on soybeans.

People’s Bank of China USD/CNY reference rate is due around 0115 GMT.

The People’s Bank of China (PBOC), China’s central bank, is responsible for setting the daily midpoint of the yuan (also known as renminbi or RMB). The PBOC follows a managed floating exchange rate system that allows the value of the yuan to fluctuate within a certain range, called a “band,” around a central reference rate, or “midpoint.” It’s currently at +/- 2%.

How the process works:

• Daily midpoint setting: Each morning, the PBOC sets a midpoint for the yuan against a basket of currencies, primarily the US dollar. The central bank takes into account factors such as market supply and demand, economic indicators, and international currency market fluctuations. The midpoint serves as a reference point for that day’s trading.
• The trading band: The PBOC allows the yuan to move within a specified range around the midpoint. The trading band is set at +/- 2%, meaning the yuan could appreciate or depreciate by a maximum of 2% from the midpoint during a single trading day. This range is subject to change by the PBOC based on economic conditions and policy objectives.
• Intervention: If the yuan’s value approaches the limit of the trading band or experiences excessive volatility, the PBOC may intervene in the foreign exchange market by buying or selling the yuan to stabilize its value. This helps maintain a controlled and gradual adjustment of the currency’s value.

This article was written by Eamonn Sheridan at investinglive.com.

S&P Global Ratings downgraded France to A+ from AA-, citing the country’s budget uncertainty as “elevated” despite the submission of a 2025 draft budget, Bloomberg reported on Saturday. 

US Vice President JD Vance said on Sunday that there is no system that exists to disarm Hamas, after the ceasefire was broken by Hamas earlier in the day.

Trump says ceasefire in Gaza still in effect

• Says he can confirm Senator Graham’s statement on Colombia tariffs (Trump told media he would impose tariffs on Colombia as punishment for its drug trade and would announce the rate on Monday)
• US is considering buying beef from Argentina
• Will announce more on tariff at Colombia on Monday
• He did not discuss Ukraine ceding Donbas region to Russia
• Region should stay as it is now with Russia having some 78% of it
• India will continue to pay ‘massive’ tariffs if they dont restrict Russian oil purchases
• Modi had told him ‘he’s not going to be doing the Russian oil thing’
• Says I want China to buy soybeans at least in the amount they were buying before
• Says he believes China will make a deal on soybean
• “We can lower” what China has to pay in tariffs, but China has to “do things for us too”
• Says do not want China to play rare earth game with us

Trump in a briefing to reporters on Air Force One

This article was written by Eamonn Sheridan at investinglive.com.

Gold price (XAU/USD) trades in negative territory around $4,245 during the early Asian session on Monday. The precious metal edges lower as the recent record-breaking rally seems overstretched and physical demand eases after the festive rush.

Copper demand drivers shift from China to the US and India – market fragmentation replaces a single dominant consumer as global consumption slows in Asia.

The global copper market is undergoing a fundamental shift as China’s decades-long infrastructure and industrial expansion slows. Analysts forecast that China’s share of global consumption will drop from 57% to an estimated 52% by 2031, signalling a return to fragmented, replacement-cycle drivers outside of Asia.

Future demand growth will be led by the United States and India, both requiring vast amounts of copper for massive infrastructure overhauls.

• United States: US copper demand is forecast to surge by nearly 50% by 2031, driven primarily by the modernisation of its ageing power grid and the construction of new AI data centres.

• India: India’s demand is expected to rise by over 30%, fuelled by the expansion of its electrical transmission network necessary to support its national goal of 500 GW of non-fossil fuel-based energy capacity.

This trend is accelerated by geopolitical factors. US policies, including a 50% tariff on Chinese copper products, are actively encouraging local manufacturing and reducing the market for China’s exported manufactured goods. These regional policy and infrastructure cycles mean producers and investors must adapt to a less centralised, multi-driver global market.

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Info via Reuters.

This article was written by Eamonn Sheridan at investinglive.com.