News

EUR/USD steadies after registering nearly 0.5% gains in the previous session, trading around 1.1620 during the Asian hours on Monday.

The General Administration of Customs will publish its data for August on Monday at 03.00 GMT. Trade balance is expected to narrow to $98.96B in September, compared to $102.33B in the previous reading. Exports are expected to climb by 6.0%, while Imports are projected to rise by 1.5%. 

Back on Friday we had the early news on the efforts of the US Bureau of Labor Statistics (BLS) to publish the latest CPI report:

• Big news – US plans to release the September CPI report data despite government shut down
• US BLS recalls staff to finish CPI report, prioritising Social Security and Fed timelines
• Former BLS commissioner Erica Groshen said the data collection for September CPI had already been completed before the shutdown began on October 1, allowing staff to focus on analysis and publication. Economists noted the report will also provide the Federal Reserve with critical input ahead of its next policy meeting later this month, October 28-29.

Over the weekend we got the data for the release:

• The BLS will release the September CPI report on Friday, October 24 at 8:30 AM ET
• compared to the original publication date of October 15
• no other releases will be rescheduled or produced until the resumption of regular government services, and the recalled staff have only been tasked with preparing the September CPI

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

The USD/CAD pair trades with a negative bias for the second straight day on Monday, though it lacks follow-through selling and holds above the 200-day Simple Moving Average (SMA) through the Asian session.

Shanghai Securities News reported on Monday that several major Chinese brokerage firms believe the momentum in China’s equity market remains intact, despite external pressures from global economic uncertainty and geopolitical risks.

Analysts cited by the paper said the A-share market’s medium-term outlook remains resilient, supported by improving corporate earnings, targeted policy support, and signs of stabilisation in key sectors such as technology and consumption.

While acknowledging ongoing external shocks — including trade frictions and fluctuating overseas capital flows — the brokerages argued there is no need for excessive pessimism, noting that domestic fundamentals and liquidity conditions continue to underpin the market.

The report reflects an effort to shore up investor confidence after recent market volatility, with several strategists emphasising that China’s structural reform agenda and easing monetary stance provide a steady foundation for medium-term growth.

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

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.

Gold price (XAU/USD) extends the rally to around $4,040 during the early Asian session on Monday. The escalating trade tensions between the United States (US) and China provide some support to the precious metal.

Asia-Pacific markets were set to fall Monday, as investors kept an eye out for any fallout from the renewed China-U.S. trade tensions.

Goldman Sachs said it expects both Washington and Beijing to step back from the brink of a full-blown trade war after President Donald Trump threatened an additional 100% tariff on Chinese imports in response to Beijing’s rare earth export curbs.

The bank said the most likely outcome is that both sides de-escalate their most aggressive positions and return to negotiations, leading to an extension — possibly an indefinite one — of the tariff-pause agreement reached in May. Goldman noted that while tensions remain high, neither side has an interest in triggering major economic disruption given the global reliance on Chinese rare earths and the US’s own exposure to supply-chain risks.

The analysis implies that Trump’s threat may be intended as leverage rather than an imminent policy move, while Beijing’s restrictions may serve as a bargaining tool to protect its technological advantage. Goldman sees the likely path as a “managed confrontation” — a tense but stable phase in which both economies avoid escalation while maintaining political pressure.

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Goldman’s assessment points to a lower immediate risk of tariff escalation, which could support risk assets and commodity markets sensitive to rare earth supply. However, the “pause” scenario still leaves uncertainty over trade policy and tech-sector supply chains.

Earlier:

Friday ICYMI:

• investingLive Americas market news wrap: Trump lobs a hand grenade

Late Friday:

• Trump announces a 100% tariff on China in addition to current tariffs, but not immediately

China responds over the weekend:

• China: Rare earth export control measures are ‘legitimate’, blames US for rising tension

Some TACO moves already, some murmurings of Trump already backing off. BRB with more on this:

• Taco time: Crypto jumps as Vance says Trump willing to be reasonable negotiator

Latest:

• Pentagon to buy $1bn in critical minerals to cut China reliance
• Trump says he thinks we are going to be fine with China, Nov 1 tariffs still the plan

• 6.30am in Beijing. Traders might exercise caution, await China’s response to Trump’s cave

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

Chief financial officers at major UK firms are more anxious about competitiveness and productivity than at any point since 2014, according to Deloitte’s latest quarterly CFO survey — a sign of mounting business unease ahead of Chancellor Rachel Reeves’s November budget.

Reuters with the info.

The July–September poll showed corporate worries over competitiveness now rival geopolitical risks, even as global tensions eased after US President Donald Trump’s new trade deals softened the impact of his tariff measures.

CFOs are prioritising cost-cutting, cash preservation, and debt reduction, Deloitte’s UK chief economist Ian Stewart said.

While the survey didn’t directly ask about tax policy, businesses remain wary following last year’s rise in social security contributions, and many expect Reeves to raise taxes again on November 26 to meet fiscal goals. A record 84% of CFOs foresee operating costs climbing in the coming year — the highest reading in more than four years.

A separate BDO report found firms slowed hiring in September amid cost pressures and budget uncertainty, though optimism improved slightly thanks to stronger order books and expectations of increased US investment.

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The findings highlight deepening corporate caution ahead of the UK budget, with expectations of further tax hikes and sticky inflation likely to weigh on investment and hiring in coming quarters.

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