Market Wrap 2025-10-13

Core-Brief

13 Oct 2025 — 14 min read

US President Trump stated on Sunday, “Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it!!!”
Equity markets are generally higher as markets react positively to Trump’s less aggressive stance on China; NQ +1.9%.
The Dollar Index (DXY) is recovering, influenced by Euro losses and Trump's weekend comments regarding China; Australian and New Zealand dollars are leading, while safe-haven currencies are lagging.
Bond prices are declining after Friday's Trump-driven increase, with French bonds (OATs) underperforming ahead of comments from Lecornu.
Commodities are rebounding as US President Trump attempts to alleviate concerns about further trade escalation.
Upcoming events include the OPEC Monthly Oil Market Report (MOMR) and speeches from figures such as BoE’s Mann, Fed’s Paulson, and RBA’s Hauser.
There are holidays in the US (Columbus Day, with US cash bond market closed) and Canada (Thanksgiving).

TARIFFS/TRADE

US President Trump posted on Sunday “Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it!!!”
US VP Vance urged Beijing to "choose the path of reason" amid escalating trade tensions with China, adding that President Trump has "far more cards" if a strong response is needed.
China’s Commerce Ministry stated that the October 9th rare earth export control measures are legitimate and intended to better safeguard world peace and regional stability. They added that these measures do not constitute an export ban, and licenses will be granted for applications that meet the requirements. MOFCOM said the US announcement of 100% tariffs on China represents a classic case of double standards, and since the US-China talks in Madrid, the US has continuously introduced a series of new restrictions against China. It also stated that China’s position on tariff wars has been consistent, whereby they do not want to fight but are not afraid to fight. Furthermore, China urged the US to promptly correct its erroneous practices and warned that should the US persist in its course, China will resolutely take corresponding measures to safeguard its legitimate rights and interests, as well as noted that the US decision to impose port fees on relevant Chinese vessels meant China “had no choice but to take countermeasures”, and that China’s decision to impose a special port fee on US-related vessels are necessary defensive actions.
China's Foreign Ministry is urging the US to promptly correct its "wrong practices" regarding the new US tariffs.
A spokesperson for China Customs said US measures on shipping fees are a typical show of unilateralism and protectionism, adding that China’s countermeasures are necessary and defensive. Furthermore, it was stated that China’s measures aim to safeguard the legitimate rights of Chinese industries and firms, while they hope the US can face up to its own 'mistakes' and that the US gets back to the correct track of communication and negotiations.
USTR Greer said the US reached out for a call with China after the export controls announcement, but Beijing deferred. It was also reported that Greer said significant progress was made in trade talks with Cambodia that will allow more export opportunities for US farmers.
The US said it is taking action to defend America from the UN’s first global carbon tax and that the administration unequivocally rejects this proposal, while the US is considering actions against nations that support this global carbon tax on American consumers. Furthermore, the US said possible actions include probes, visa restrictions, commercial penalties, additional port fees and sanctions on officials.
Canadian Industry Minister Joly said the government is working on a new industrial strategy that seeks to open new markets for exporters and prioritise domestic procurement in the face of US tariffs, which have hurt steel, aluminium, forestry and automotive companies. It was also reported that Canadian Trade Minister Sidhu spoke with India’s Commerce Minister Goyal.
Switzerland and China will accelerate trade discussions on upgrading their free-trade agreement, following a meeting between Swiss Foreign Minister Cassis and Chinese counterpart Wang on Friday.
An Indian Trade Delegation is to visit the US this week, according to Reuters citing sources; good progress has reportedly been made. India and the US are sticking to a fall deadline for an early part of the deal. India is looking to buy more energy and gas from the US.

EUROPEAN TRADE

EQUITIES

European stock exchanges (STOXX 600 +0.4%) opened higher across the board to varying degrees and have traded sideways throughout the morning. Markets are currently reacting positively to US President Trump's softer tone on China, after Friday's threat of 100% tariffs on the region.
European sectors generally show a positive trend. Cyclical sectors are mostly performing well, with Tech and Consumer Products leading, while Telecoms are lagging slightly.
US equity futures (ES +1.9%, NQ +2%, ES +1.5%) are all in positive territory, attempting to recover some of the losses seen on Friday following Trump's tariff threat on China; the upside is spurred by Trump's weekend comments on Truth, telling China not to worry. As a reminder, today is Columbus Day in the US, though cash equity trade is open.
Deutsche Bank forecasts a year-end target of 650 for the Stoxx 600; European equities are upgraded to Overweight from Neutral versus US equities.
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FX

Overall, the Dollar is firmer after Friday's significant decline following US President Trump's statement that there is no reason to meet Chinese President Xi and his threat of 100% tariffs on China. Over the weekend, US President Trump softened his tone, suggesting the Xi meeting is not cancelled and “might” still happen, and added that the US wants to help, not hurt China, although Trump did not withdraw his tariff threat. The Columbus Day holiday in the US means that cash bond markets are closed, although equity markets are open today. The Dollar Index (DXY) is currently trading within a 98.83-99.21 range, within Friday's 98.81-99.43 range.
The Euro is subdued but within relatively tight parameters, with ECB’s Vujcic suggesting he’s comfortable with current policy settings, noting that “markets predict that interest rates will stay where they are” and stating, "they are at a good place". Attention also remained on the political situation in France, where Lecornu returned as French PM and a new government was unveiled ahead of the budget deadline, with Lecornu asked to present a revised budget to parliament. ING suggests "That seems likely to fail and result in a no-confidence vote later this week, which will leave France without a government. A rise in German WPI this morning did little to move the charts.
The Japanese Yen is the clear underperformer, closely followed by the Swiss Franc, as these safe-haven currencies unwind some of the recent safe-haven flows from Friday and amid the Japanese holiday closure overnight. USD/JPY gapped higher overnight after ending Friday's session towards the bottom of a 151.10-153.27 range, with today between 151.72-152.37 parameters.
Cable is seeing mild losses despite a lack of pertinent catalysts this morning, but as the DXY clambers off worst levels, while press reports over the weekend noted that UK Chancellor Reeves is eyeing up a GBP 7bln tax raid on pensions to plug a black hole in the Budget. The pair trades in a 1.3329-1.3366 range at the time of writing.
Australian and New Zealand dollars are the clear outperformers this morning amid the partial unwind of Friday's fall, with the AUD surpassing peers and being aided by a boost in base metals and gold also holding firm despite a recovery in the dollar and in spite of the unwind of risk premium across other havens, albeit amid the ongoing US government shutdown.
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FIXED INCOME

It's a softer start to the week for US Treasuries after the Trump-induced jump on Friday. To recap, USTs reached a peak of 113-09 on Friday after escalating trade tensions between the US and China. Since then, the US President has used slightly softer language over the weekend, and while China has commented, it has not yet announced a tit-for-tat or escalatory response. These points have eased some of the tension, allowing the risk tone to recover to a degree. As such, USTs are down to a 112-30 trough with losses of 6+ ticks at most, though markedly clear of the 112-16+ base from Friday. For the US, today is quieter than usual due to Columbus Day; while it is not a formal market holiday, cash trade remains closed and was also shut overnight due to the absence of Japan. Nonetheless, Fed’s Paulson (2026) is scheduled and expected to provide a text and partake in a Q&A; we haven’t really heard from Paulson since she replaced Harker at the Philadelphia Fed at end-June.
French bonds (OATs) are underperforming compared to peers. They are in focus as re-appointed PM Lecornu addresses his newly formed cabinet before speaking to parliament at some point today. As a reminder, the current schedule means that a draft 2026 budget of some form needs to be presented today in order to allow discussion/negotiation and passage before year end.
German Bunds were initially lower, tracking USTs, but are now a touch firmer. Specifics for Germany are primarily on the fiscal front. Handelsblatt reports that the Finance Ministry is considering exempting from the debt brake the interest payments on loans for defence spending. An exemption that would provide a “double-digit billion amount” of leeway in the coming years. There was no discernible move in Bunds to the release. Bunds are in a 129.13 to 129.34 band, which is entirely within Friday’s 128.70 to 129.41 parameter.
UK Gilts opened lower by a handful of ticks, directionally in line with peers but with magnitudes a little more contained. Since then, the benchmark has been as low as 91.01, posting losses of 15 ticks at most. However, Gilts have reverted back towards opening levels of 91.12 in a 91.01-26 band. Multiple outlets report that the Chancellor is looking at giving herself more than the GBP 9.9bln of headroom she had from her first budget. To do this, she is said to be considering a pension raid, among other measures to target wealthier households, according to the Express/Telegraph.
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COMMODITIES

Crude oil benchmarks are climbing as markets digest the softening tone from US President Trump following increased trade tensions between China and the US, where Trump threatened to impose an additional 100% tariff on China. After the largest selloff on Friday since late June, WTI and Brent have bounced and peaked shy of USD 60/bbl and USD 64/bbl respectively. Benchmarks are currently oscillating in a tight c. USD 0.40/bbl range.
Precious metals continue to break all-time highs, with spot gold (XAU) peaking at USD 4078/oz during the APAC session and currently trading near its peak. Shrinking stockpiles of silver in London, in addition to the rising debt concerns and debasement from the dollar, have helped reinforce the rally in silver (XAG). It has been calculated that “free float” silver has dropped to just 200mln ounces, down 75% from a high of over 850mln ounces in mid-2019. Further upside is still the theme in precious metals, with BofA lifting XAU and XAG forecasts to USD 5k/oz and USD 65/oz respectively.
Base metals are rebounding as US President Trump plays down tariff scare. 3M LME Copper gapped higher and peaked at USD 10.67k/t, before finding support at USD 10.5k/t and currently oscillating between parameters formed early this session.
Iraq set the November Official Selling Price (OSP) for Basrah medium crude to Asia at plus USD 0.85/bbl versus Oman/Dubai and set the OSP to Europe at minus USD 2.80/bbl versus Dated Brent, while it set the OSP to North and South America at minus USD 1.40/bbl versus ASCI, according to SOMO.
Ahead of LME Week (Oct 13th), Goldman Sachs expects copper prices to remain in a USD 10,000-11,000/t price range in 2026/2027, but sees downside to aluminium prices, while nickel is likely to remain in oversupply. Elsewhere, the desk sees the most likely medium-term path for silver prices as one of further gains, as Fed cuts attract inflows.
BofA is lifting gold price forecasts after spot gold hit their USD 4,000/oz forecast; they say a 14% increase of investment demand – similar to what was seen this year – could lift gold to USD 5,000/oz, and a 28% demand increase could see a rally to USD 6,000/oz. They still expect further upside in 2026: Gold potentially rising to USD 5,000/oz (USD 4,400 average). Silver potentially rising to USD 65/oz (USD 56.25/oz average). Downside risks to watch: US mid-term election outcomes impacting policy implementation, a possible Fed hawkish pivot if data improves, and a Supreme Court ruling on Trump’s tariffs.
Saudi Aramco CEO says oil demand is resilient and there is large growth potential. Maximum sustained production capacity is 12mln BPD, which can be done at no additional cost for one year. He sees oil demand growing by 1.1-1.3mln BPD in 2025, and then 1.2-1.4mln BPD in 2026.
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NOTABLE DATA RECAP

German Wholesale Price Index MM (Sep) 0.2% (Prev. -0.6%); YY (Sep) 1.2% (Prev. 0.7%)

NOTABLE EUROPEAN HEADLINES

UK Chancellor Reeves is increasing her plans for tax increases and spending cuts in the November Budget in order to create billions of pounds of additional fiscal “headroom” for the Treasury against future economic shocks, according to FT. It was separately reported that UK Chancellor Reeves is reportedly eyeing up a GBP 7bln tax raid on pensions in a desperate bid to plug a black hole in the Budget, with experts warning that Reeves could push up taxes both on pension contributions paid by working people, and on withdrawals by retirees, according to the Express. Meanwhile, The Telegraph reported that Chancellor Reeves has signalled that wealthier households will be asked to “contribute more” in her Budget next month.
ECB’s Vujcic suggested he’s comfortable with the current policy settings as he noted that “Markets predict that interest rates will stay where they are,” and stated that “We are at a good place.”
The French Presidency announced a new government on Sunday with Laurent Nunez named as Interior Minister, Roland Lescure renamed as Finance Minister and Jean-Noel Barrot renamed as Foreign Minister.
Several people were injured in the German town of Giessen after someone fired shots in a marketplace, according to DPA citing a police spokesperson.

NOTABLE US HEADLINES

US President Trump said on Friday that layoffs will be Democrat-oriented and it will be a lot of people. Trump separately commented that he is using his authority to direct the defence secretary to use all available funds to get troops paid on October 15th, while he added they identified funds to do this and Secretary Hegseth will use them to pay troops.
US VP Vance said they have to lay off some federal workers to preserve essential benefits, while he responded that the ‘President is looking at all his options’ when asked if Trump is considering invoking the Insurrection Act. Furthermore, he said that the Justice Department is not acting on orders by President Trump to prosecute his political opponents.
New research suggested that the upcoming easing of capital rules could unlock USD 2.6tln in lending capacity for US banks and increase pressure on regulators elsewhere to follow suit, according to FT.

GEOPOLITICS

MIDDLE EAST

Egypt will host an international summit on Monday regarding the agreement to end the war in Gaza which will be attended by more than 20 leaders, including US President Trump. It was also reported that UK PM Starmer will travel to Egypt to attend the signing ceremony of the Gaza peace plan, while French President Macron and European Council President Costa will also attend the peace summit in Egypt on Monday.
An Israeli government spokesperson said the release of hostages will begin early Monday morning and it expects all 20 living hostages to be released together at one time, while Palestinian prisoners will be released once all hostages set to be released on Monday are received.
Israeli army radio announced that the first 6 hostages are to be released in Gaza City, while it was reported that Hamas published the names of the 20 hostages to be released.
Iran’s Foreign Minister Araqchi said the possibility of Iran joining the Abraham Accords is US President Trump’s wishful thinking and Iran will never recognise an ‘occupier regime, which has committed genocide and killed children’, while he added that Tehran sees no reason for nuclear talks with European powers. Furthermore, he noted that Tehran and Washington are exchanging messages through mediators and that Tehran welcomes a potential ‘fair and balanced’ US nuclear proposal, but stated they have not received any request for nuclear negotiations from any country so far.
All living hostages have now been released by Hamas, according to reports citing Kann News.
US President Trump says Hamas will comply with plans to disarm; the war is over.

RUSSIA-UKRAINE

US President Trump said he may tell Russian President Putin that he may send Tomahawk missiles to Ukraine if the war is not settled.
Ukrainian President Zelensky said he had a good, productive conversation with US President Trump and discussed strengthening air defence, while he is grateful for US readiness to support. Zelensky separately commented that they would only use Tomahawk missiles to pursue military goals, not to attack civilians in Russia, although he also noted that Trump has not yet made a decision on supplying Tomahawks to Ukraine and that he is waiting for Trump’s decision.
A Ukrainian drone struck Russia’s Bashneft oil refinery in Ufa.
The Russian Defence Ministry said Russian troops hit fuel and energy infrastructure facilities of Ukraine’s military-industrial complex, while it reported on Sunday morning that Russia shot down 72 Ukrainian drones over the previous day.
The UK Ministry of Defence said two Royal Air Force aircraft flew a 12-hour mission on Thursday with the US and NATO as they patrolled the border of Russia.

OTHER

Pakistan’s military said 22 Pakistani soldiers were killed and more than 200 died on the Afghan side in border clashes. Furthermore, Pakistan's Foreign Minister said they expect the Taliban government to take concrete measures against terrorist elements and perpetrators that wish to derail Pakistan-Afghanistan relations, while Pakistan will take all possible measures to defend its own territory, sovereignty and people.
The Afghan Taliban Foreign Minister said Qatar and Saudi Arabia intervened for mediation after Saturday night firing between Afghanistan and Pakistan, while the official added that they have other ways to handle the situation if Pakistan does not want to engage in dialogue.
The Philippines said a government vessel was rammed by a Chinese ship at sea, while China’s Coast Guard said two Philippine government vessels ‘illegally entered’ waters near Sandy Cay without authorisation, which resulted in a collision, for which the Philippine side bears full responsibility. Furthermore, the Chinese Coast Guard stated that it lawfully took control measures against Philippine vessels and resolutely expelled them.
North Korean Leader Kim held talks with Russia’s Medvedev and said the military must evolve to destroy all threats, while Kim said the nation’s military heroism will not only be seen in the defence of North Korea but also in outposts of socialist construction. Furthermore, Kim told Medvedev that he hopes to continue to strengthen cooperation between the two countries and closely engage in diverse exchanges and contacts to achieve common goals, according to KCNA.
China and North Korea pledged to develop strategic communication and will strengthen strategic cooperation.

CRYPTO

Bitcoin is firmer and attempting to scale back recent losses; Ethereum outperforms and is back above USD 4k.

APAC TRADE

APAC stocks began the week in the red as the region reacted to last Friday's Trump tariff threats and the subsequent Wall St sell-off, although US equity futures rebounded due to the softer tone from Trump over the weekend, while Japanese markets were shut for a holiday.
The ASX 200 was dragged lower by underperformance in tech, energy, telecoms and defensives, while gold miners are at the other end of the spectrum after prices rebounded back above the USD 4,000/oz level to touch fresh record highs.
The KOSPI retreated amid tech weakness, and with index heavyweight Samsung Electronics pressured after it was hit by a USD 445.5mln jury verdict for infringing wireless communication patents.
The Hang Seng and Shanghai Comp were pressured following the flare-up of US-China trade frictions on Friday after US President Trump threatened massive tariffs on China and announced to impose a 100% additional tariff on China from November 1st, before softening his tone over the weekend, while participants digested the latest Chinese trade data, which showed both exports and imports topped forecasts.

NOTABLE ASIA-PAC HEADLINES

China Customs Vice Minister said great efforts are needed to stabilise foreign trade in Q4 and that China's foreign trade showed resilience with improving structure in Q1-Q3, but the current external environment is still complex and grim with rising uncertainties.
The US FCC chair said on Friday that US ecommerce websites were removing millions of prohibited Chinese electronic items from companies like Huawei.
The Dutch government said it is intervening in Dutch chipmaker Nexperia and stated that there are serious administrative shortcomings at Nexperia, while it added that intervention means it may block or reverse company decisions and that the Co. is a subsidiary of Chinese electronics manufacturer Wingtech (600745 CH).

DATA RECAP

Chinese Trade Balance (CNY)(Sep) 645.5B (Prev. 727.7B)
Chinese Exports YY (CNY)(Sep) 8.4% (Prev. 4.8%); Imports YY (CNY)(Sep) 7.5% (Prev. 1.7%)
Chinese Trade Balance (USD)(Sep) 90.45B vs Exp. 98.96B (Prev. 102.33B)
Chinese Exports YY (Sep) 8.3% vs Exp. 6.0% (Prev. 4.4%); Imports YY (Sep) 7.4% vs Exp. 1.5% (Prev. 1.3%)