Japan ministers named, clearing path for a new style of Abenomics

EU Mid-Market Update: Japan ministers named, clearing path for a new style of Abenomics; Gold still near record highs as Bitcoin slips below $110K; Earnings season to pick up.

Notes/observations

- Japan’s Takaichi becomes first female PM; Cabinet ministers named, with Katayama as Finance Minister. Akazawa stays as trade minister. Yen slips to 151 against US dollar; Tier1 analysts think LDP coalition with JIP likely reduce the risk of unchecked fiscal expansion and interest rate increases as JIP places relatively greater emphasis on fiscal discipline (government described as a potential continuation or intensification of Abenomics).

- UK borrowing rose to £20.2B, second-highest September on record, leaving limited fiscal room amid inflation and high yields. Just over a month until Autumn budget on Nov 26th.

- President Trump’s push for a “quick” meeting with Russian President Putin may be delayed, as the White House sees no indication that Moscow is prepared to offer meaningful concessions, according to CNN. The planned preparatory talks between U.S. Secretary of State Rubio and Russian Foreign Minister Lavrov have also been put on hold.

- Zions’ earnings deck laid bare the quiet leverage now unsettling U.S. regional banks: $2.0B in loans to non-deposit financial institutions - 7% of its commercial book - stretching across BDCs, REITs, fund-finance lines, and insurance affiliates. What looked like cautious diversification now reads as embedded contagion risk, as investors reprice the opacity behind those exposures.

- Miners are higher after Australia secures US critical minerals deal ( BHP +2%, Rio Tinto +2%, Alcoa +8% ).

- US and Canada are reportedly close to finalizing a trade deal on steel, aluminum, and energy that could be signed by President Trump and PM Carney at the APEC Summit later this month. However, Washington said to be unwilling to negotiate on automobiles or softwood lumber - two of Canada’s key exports.

- Asia closed higher with Shanghai Composite outperforming +1.4%. EU indices -0.2% to +0.7%. US futures -0.2%. Gold .-2.0%, DXY +0.2%; Commodity: Brent +0.1%, WTI +0.1%; Crypto: BTC -3.1%, ETH -4.6%.

Asia

- South Korea Oct Exports 1-20 Days Y/Y: -7.8% v -15.2% prior; Imports Y/Y: -2.3% v 9.9% prior.

- New Zealand Sept Trade Balance (NZD): -1.4B v -1.2B prior.

- Japan outgoing Fin Min Kato: Need careful steering of policy as yields rise.

- Japan Parliament formally elected Takaichi as Prime Minister (received 237 votes vs. the 233 required).

- Takaichi appointed relative newbie Satsuki Katayama to the key role of Finance Minister; Motegi as Trade Negotiator.

- Australia Treasurer Chalmers: Made good budget progress, but more work is needed; managed to reduce prices and project jobs.

Global conflict/tensions

- Pres Trump's desire for 'quick' meeting with Russian Pres Putin "may be delayed".

Europe

- Germany Finance Ministry Monthly Report: Sept tax revenues +2.6% y/y.

- UK Chancellor Reeves reiterated pledge to continue to meet fiscal rules and lower the debt and deficit. Mindful to get the balance right on taxes. Additionally govt said to be set to announce a major crackdown on red tape, simplifying corporate reporting for 100,000 firms to save them nearly £6 billion annually.

Americas

- FHFA Dir Pulte: Trump Administration was opportunistically evaluating an offering for Freddie and Fannie, which could come as early as the end of 2025.

Trade

- Pres Trump: Potential 155% tariffs on China will come on Nov 1st, unless we make a deal; Expected to work out a fair deal with Xi; We'll end up with a strong trade deal with China following meeting in South Korea; Would come to China in early 2026 once the details were sorted out.

- White House released sheet on critical minerals framework with Australia; DOD would invest in Gallium refinery.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 -0.04% at 571.88, FTSE +0.18% at 9,420.82, DAX -0.22% at 24,238.47, CAC-40 +0.03% at 8,208.44, IBEX-35 -0.13% at 15,826.30, FTSE MIB +0.63% at 42,658.00, SMI -0.09% at 12,610.66, S&P 500 Futures -0.13%]

Market Focal Points/Key Themes: European indices opened generally higher, but took on a negative bias as the session wore on; trade concerns weighing on risk appetite; among sectors in the green are financials and communication services; sectors inclined to the downside include health care and materials; Coca-Cola HBC raises stake in Coca-Cola Beverages Africa; Galapagos to wind down its cell therapy unit; earnings expected in the upcoming US session include Netflix, GE Aerospace, Philip Morris and RTX.

Equities

- Consumer discretionary: Bunzl [BNZL.UK] -0.5% (trading update), Coca-Cola HBC [CCH.UK] -1.0% (acquisition; trading update).

- Consumer staples: Eurofins Scientific [ERF.FR] -7.0% (earnings), Interparfums [ITP.FR] -1.0% (earnings).

- Financials: HSBC [HSBA.UK] +1.5% (new HSBC UK CEO), BNP Paribas [BNP.FR] -2.0% (analyst downgrade), Segro [SGRO.UK] +3.0% (trading update).

- Healthcare: Getinge [GETIB.SE] +4.0% (earnings).

Speakers

- ECB’s Lane (Ireland, Chief economist): Monetary policy transmission was progressing smoothly.

- Sweden Central Bank (Riksbank) Gov Thedeen reiterated stance that interest rates would remain at this level for some time.

- European leaders strongly support stop to fighting in Ukraine. Seek to ramp up pressure on Russian economy. Working on actions to use value of Russian frozen assets.

- China Foreign Ministry Daily Briefing: Taiwan was inseparable from China.

- Japan Fin Min Katayama stated that would take responsibility on policy with PM Takaichi. FX should move stably reflecting fundamentals; Could not comment beyond that on FX; Would continue with efforts to pass on prices.

Currencies/fixed income

- USD was mainly on steady footing as reduced fears over US-China tension came about and hope for a resolution to the US government shutdown. President Trump expected to reach a fair-trade deal with China's leader Xi Jinping in South Korea next week.

- USD/JPY moved off its best level after Japan Lower House elected Takaichi's PM on the 1st ballot. Yen firmed up as dealers speculated that the BOJ would continue with its policy-rate hike in the next couple of months.

- EUR/USD at 1.1615 by mid-session.

- GBP/USD at 1.3380.

- 10-year German Bund yield at 2.57%, France 10-year Oat at 3.36% and 10-year Gilt yield at 4.49% 10-year Treasury yield: 3.97%.

Economic data

- (FI) Finland Sept Unemployment Rate: 9.1% v 9.3% prior.

- (UK) Sept Public Finances (PSNCR): -£10.9B v +£10.2B prior; Net Borrowing (PSNB): £20.2B v £20.8Be.

- (CH) Swiss Sept Trade Balance (CHF): 4.1B v 3.9B prior; Real Exports M/M: 2.7% v 0.0% prior; Real Imports M/M: 1.9% v 0.8% prior; Swiss Watch Exports Y/Y: -3.1% v -16.5% prio.

- (JP) Japan Sept Final Machine Tool Orders Y/Y: 11.0% v 9.9% prelim.

- (CH) Swiss Sept M3 Money Supply Y/Y: 3.9% v 4.5% prior.

- (ZA) South Africa Aug Leading Indicator: 115.5 v 113.6 prior.

- (FR) France Sept Retail Sales Y/Y: -1.2%e v -1.0% prior.

- (TW) Taiwan Sept Export Orders Y/Y: 30.5% v 18.7%e.

- (PL) Poland Sept Construction Output Y/Y: +0.2% v -2.3%e.

- (EU) Euro Zone 2024 Final Govt Debt/GDP Ratio: 87.1% v 87.4% prelim.

Fixed income issuance

- (SE) Sweden opened its book to sell USD-denominated 3-year notes; guidance seen +28bps to SOFR mid-swaps.

- (EE) Estonia opened its book to sell EUR-denominated 3.25% Jan 2034 bonds; guidance seen +80bps to mid-swaps.

- (UK) DMO sold £1.5B in 1.5% July 2053 Green Gilts; Avg Yield: 5.294% v 5.169% prior; bid-to-cover: 3.17x v 3.2x prior; Tail: 0.8bps v 0.8bps prior.

Looking ahead

- (MX) Mexico Citi Survey of Economists.

- 05:25 (EU) Daily ECB Liquidity Stats.

- 05:30 (CH) Switzerland to sell 3-month Bills.

- 05:30 (DE) Germany to sell combined €1.50B in 2027 and 2035 green debt.

- 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills.

- 05:30 (ZA) South Africa to sell combined ZAR3.75B in 2039, 2040 and 2044 bonds.

- 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO).

- 05:35 (ES) ECB’s Escriva (Spain).

- 05:40 (UK) BOE allotment in 6-month GBP-enhanced liquidity repo operation (ILTR).

- 06:00 (FI) Finland to sell €1.0-1.5B in 2032 and 2035 RFGB bonds.

- 06:30 (EU) ESM to sell €1.1B in 6-month bills.

- 07:00 (EU) ECB Chief Lagarde.

- 08:00 (HU) Hungary Central Bank (MNB) Interest Rate Decision: Expected to leave Base Rate unchanged at 6.50%

- 08:00 (UK) Daily Baltic Dry Bulk Index.

- 08:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed).

- 08:30 (US) Oct Philadelphia Fed Non-Manufacturing Activity: No est v -12.3 prior.

- 08:30 (CA) Canada Sept CPI M/M: -0.1%e v -0.1% prior; Y/Y: 2.2%e v 1.9% prior; CPI Core-Median Y/Y:3.0%e v 3.1% prior; CPI Core-Trim Y/Y: 3.0%e v 3.0% prior; Consumer Price Index: 164.4e v 164.8 prior.

- 08:55 (US) Weekly Redbook LFL Sales data.

- 09:00 HU) Hungary Central Bank (MNB) post rate decision statement.

- 09:30 (AT) ECB’s Kocher (Austria).

- 11:00 (CO) Colombia Aug Trade Balance: -$1.6Be v -$1.7B prior; Total Imports: $5.7Be v $6.1B prior.

- 11:30 (US) Treasury to sell 6-Week Bills.

- (MX) Mexico Citi Survey of Economists.

- 16:30 (US) Weekly API Crude Oil Inventories:

- 17:00 (KR) South Korea Sept PPI Y/Y: No est v 0.6% prior.

- 18:00 (HU) Hungary Oct Business Confidence: No est v -10.5 prior; Consumer Confidence: No est v -27.0 prior; Economic Sentiment: No est v -14.8 prior.

- 18:00 (DE) ECB’s Nagel (Germany).

- 19:50 (JP) Japan Sept Trade Balance: +¥22.5Be v -¥242.8B prior (revised from -¥242,5B; Adjusted Trade Balance: -¥100.0e v -¥150.1B prior; Exports Y/Y: +4.4%e v -0.1% prior; Imports Y/Y: +0.6%e v -5.2% prior.

**Mid-Oct Update of TradeTheNews.com's Risk Radar

Oct 20-23 - China holds CPC plenary session on next 5-year plan.

Oct 21 - Japan PM press conference; Netflix earnings.

Oct 22 - Tesla earnings.

Oct 24 - US federal employees are scheduled to get paid, covering Oct 4-18th period.

Oct 24 - flash PMIs + delayed US Sept CPI release; Moody’s rating update on France.

Next week - potential Trump-Putin meeting in Hungary.

During autumn - AI hyperscaler formal guidance on FY26 Capex with MSFT, META, GOOGL and AMZN reporting end-Oct and preparations for the 2026 German budget.

Oct 27-29 - NVIDIA GTC Washington, D.C. AI Conference.

Oct 29-30 - Fed and BOJ decisions.

Oct 30 – ECB meeting; US Q3 GDP advance estimate, if US govt reopens, which could sharply reset rate cut expectations.

Oct 30-Nov 1 - APEC summit where Trump and Xi still expected meet.

Nov 1 - the start of open enrollment for health insurance, could be a moment for Senate Democrats to declare “victory” and allow the government to reopen.

Nov 4 - US off-year elections (NJ, VA governorships) + NYC mayor elections + CA's vote on Proposition 50, a measure proposing temporary redistricting of California’s congressional districts.

Nov 5 – Supreme Court starts hearing oral arguments in IEEPA’s legality case; US mid-autumn corporate earnings peak

Nov 6 - Tesla meeting with shareholders on Musk pay plan.

~Nov–Dec or early 2026 - Supreme Court decision window on IEEPA’s legality.

Nov 10 - another expiration of US-China tariff détente.

Nov 18-21 - Microsoft Ignite conf.

Nov 19 - Nvidia Q3 FY26 results.

Nov 22–23 – G20 Summit in South Africa.

By Nov 26-Dec 5 – Deadline for timber/lumber imports report.

Nov 26 - UK Autumn budget.

Dec 1-5 - Amazon re:Invent conf.

By end-2025 - Grok 5 release.

Potentially by end-2025 - trilateral summit by Putin-Trump-Zelenskiy.