Morning wrap (14.10.2025)

Wall Street partially recovered losses sustained late in Friday's session, driven by Sunday's conciliatory message from Donald Trump and signals from Beijing indicating a willingness to resume trade negotiations.

Scott Bessent confirmed in an interview yesterday that the planned meeting between President Trump and President Xi is still on the calendar, while also warning that the ongoing government shutdown is beginning to exert a negative impact on economic activity.

China's Ministry of Commerce noted that trade talks with the US continue at a working level, though Beijing has simultaneously initiated an investigation into the impact of US tariffs on the Chinese transport sector, targeting five American enterprises.

The S&P 500 cash index gained 1.5% and the Nasdaq advanced 2.2%; however, futures are opening lower today, with the US500 shedding 0.35% and the US100 declining by 0.5%.

Asian markets are trading lower, though Chinese index futures show losses of only a few basis points. Larger declines are noted in Japan, with the Nikkei 225 down 0.35%, and HK.cash losing 0.2%. Conversely, South Korea's KOSPI index hit a historic peak driven by strong earnings forecasts for Samsung.

The NAB Business Confidence Index in Australia rose to 7 points in September (up from 4 in August), linked to accelerating sales and expanding margins which are offsetting weakness in the labour market.

Minutes from the latest RBA meeting suggest the bank is exercising patience regarding further rate cuts, noting that while interest rates remain at restrictive levels, activity in the property market continues to be robust.

The RBA stated that the Australian Dollar's (AUD) appreciation is consistent with underlying fundamentals and shifts in yields, signalling the bank does not intend to add to the current restrictive monetary stance.

Goldman Sachs projects the current government shutdown could be the longest in history, estimating that each week subtracts 0.11 percentage points from annualised Q4 growth; GS nonetheless anticipates a rebound upon resumption of government work and expects the Fed to proceed with an interest rate cut in October despite the lack of current economic data.

Rabobank forecasts AUD/USD trading at 0.65 in the near term, subsequently advancing to 0.68 over the next 12 months.

The Bureau of Labour Statistics (BLS) announced that the Consumer Price Index (CPI) inflation reading will be released on October 24th.

The frenzy in the precious metals market continues, with Gold hitting $4,167 per ounce and Silver exceeding $53 per ounce. Silver borrowing costs reached 30% per month on the London exchange, forcing traders to cover short positions; Goldman Sachs cautions that in the event of a market breakdown, Silver lacks the central bank support that underpins Gold, noting the silver market is five times smaller and less liquid.

Crude oil has resumed its decline following yesterday's minor rally, trading below $60 per barrel (WTI); natural gas is approaching $3/MMBTU after a 1% drop.

The US macroeconomic calendar remains empty due to the ongoing government shutdown; however, Federal Reserve Chair Jerome Powell is scheduled to speak at 18:20 CET.

Earnings season kicks off in full today, with results expected from major firms including JP Morgan, Goldman Sachs, Citi, Wells Fargo, BlackRock, and J&J.