Market Report.
🤝 President Trump and Australian Prime Minister Albanese signed an agreement on critical minerals and rare earths, which includes plans for projects worth up to $8.5 billion. The agreement involves $1 billion contributed from Australia and the U.S. over the next six months, with projects immediately available, according to Albanese.
📄 However, the White House fact sheet stated the countries would invest more than $3 billion in critical mineral projects over the next six months, describing it as a “framework” agreement.
🌍 The agreement aims to establish a critical mineral and rare earths supply chain that is not dependent on China, which dominates the global rare earths market. The Pentagon will invest in building a gallium refinery in Western Australia, and the U.S. is working with other nations to build a supply chain independent of China.
🗨️ Trump, who is preparing for a scheduled meeting with Chinese President Xi Jinping next week on the sidelines of an economic conference in South Korea, stated that he anticipates reaching a fair trade agreement with Xi.
📈 London stocks rise on boost from defence and mining stocks, in what appears to be a strategic reconfiguration of the new times we live in. The aerospace and defense stocks index advanced 2%, with Babcock and Rolls-Royce among the top performers. Weeks ago, we highlighted the opportunities represented by Rolls-Royce, it seems that once again we are not wrong.
💰 The precious metal miners index rose 1.5% as gold prices edged higher. The banks index gained 0.7%, recovering after concerns about credit quality in U.S. regional banks caused a global selloff in the financial sector. However, the homebuilders index lost 1.2%, with Persimmon leading the losses, after a survey showed asking prices for British homes rose only 0.3% in the four weeks to October 11, below the seasonal average.
🏢 The UK government is seeking to demonstrate its pro-business credentials by cutting red tape, but acknowledges the challenges in delivering meaningful regulatory reform that businesses are willing to embrace.
📢 Chancellor of the Exchequer Rachel Reeves will announce the government is cutting red tape for businesses in an attempt to boost economic growth ahead of a difficult budget next month. The government sees reducing the regulatory burden on companies as crucial to achieve the growth it is seeking to deliver on election promises to boost infrastructure and public finances.
📊 Reeves is expected to confirm that thousands of companies will no longer be required to produce Strategic Reports and promise less frequent data returns and financial statements for finance firms.
📉 The IMF’s World Economic Outlook indicates U.K. inflation will average about 3.4% this year, higher than that of all other developed economies.
💷 A number of asset managers, including Candriam and RBC BlueBay Asset Management, are betting that the pound will tumble in value as the U.K. wrestles with faltering growth and Finance Minister Rachel Reeves confronts a looming fiscal headache in next month’s budget.
⚠️ In RBC BlueBay, they highlighted the risks of the government relying solely on tax hikes to raise revenue, warning that such measures could dent investor sentiment and hamper growth. They also noted that yields on U.K. 10-year gilts could be an attractive area to sell, as inflation and political risks are hard to discount.
👥 Bundesbank President Joachim Nagel stated that Germany needs immigrants to maintain economic momentum and make up for demographic decline. Nagel stressed that Germany “should have that openness when it comes to immigration” and that his institution will emphasize the need for “qualified immigration to Europe, to Germany” and for “open, tolerant countries.”
👴 Germany’s population is shrinking and getting older, with nearly 30% of the current workforce set to retire by 2036. This comes as Chancellor Friedrich Merz doubled down on controversial remarks suggesting Germany has too many migrants.
📱 Apple shares rose nearly 4% on Monday to a record close of $262.24 as a new report showed strong early sales for the iPhone 17 series in the U.S. and China. Apple CEO Tim Cook visited China recently, and the new iPhone Air model reportedly sold out quickly after going on sale there.
📈 While Apple shares have lagged some tech giants so far in 2025, the stock has rallied 24% over the last 3 months on the strong iPhone 17 demand.
💸 The value of the Argentine peso has dropped 99.8% since 2009 and is now at its lowest point ever versus the US dollar.
🌏 China continues to win small battles against the dollar. Ethiopia has entered formal discussions with China to convert a portion of its 5.38 billion USD debt into yuan-denominated loans, following a model recently adopted by Kenya.
🤝 Ethiopia’s motivation stems from surging dollar repayment costs due to global interest-rate hikes and a weakening birr. By switching to yuan, the government hopes to lower servicing costs, stabilize exchange-rate risk, and strengthen China–Ethiopia trade settlement links, which are increasingly yuan-based.
Geopolitics.
🕊️ President Trump has cast doubt on Ukraine’s ability to defeat Russian forces, backing off an earlier more optimistic assessment as he looks to bring the war to an end and prepares for another meeting with President Putin.
💭 Trump told reporters “I don’t think they will, but they could still win it,” marking a shift in tone from his previous statement that Ukraine is “in a position to fight and WIN all of Ukraine back.” This comes after Trump spoke with Putin the day before Zelenskyy’s visit to Washington, and the two leaders agreed to meet in Budapest, Hungary in the coming weeks.
🇪🇺 European officials have criticized the choice of Budapest as the venue for the Trump-Putin summit, fearing they will be sidelined as Trump pushes to negotiate directly with Putin.
Market View.
📊 US futures are responding positively and, during yesterday’s session, approached their all-time highs. S&P 500 futures are trading at 6,768 points, while Nasdaq 100 futures are at 25,280 points.
💵 The dollar is resurging, with the DXY dollar index approaching 99 points, currently trading at 98.80. This has once again weakened the EUR/USD pair, which continues to lose strength and has fallen below 1.1630.
📉 Yields on the US 2-year bond have also decreased, indicating greater appetite for US assets, dropping below 3.40% last Friday. This could help explain the strengthening of the dollar.
📈 In Europe, DAX 40 futures saw a strong recovery during yesterday’s session, climbing above 24,300 points and currently trading at 24,375 points. Meanwhile, EuroStoxx futures, which we noted have been performing better in recent sessions, have reached new all-time highs, now trading above 5,700 points.
🛢️ Oil, though weak, appears to be stabilising at recent lows, with Brent crude trading at $61 per barrel.
🏅 Gold futures nearly reached $4,400 per ounce again during yesterday’s session but have since retreated to the current $4,345.
💻 As for Bitcoin, while we noted a strong recovery yesterday, it has lost ground in recent hours and has dropped back to $107,940.
