Futures turn positive after Trump Softens on China | Markets Eyes Rebound

Monday, 13 October 2025

Market Overview

• Europe: Equity futures point to a modest rebound following last Friday’s heavy sell-off. Euro Stoxx 50 futures +0.3%, after cash markets closed down –1.7% on trade fears.
• APAC: Regional equities started lower on Friday’s tariff shock but pared losses after Trump’s conciliatory weekend remarks (“Don’t worry about China, it will all be fine!”). Japan closed for holiday; China, Hong Kong, South Korea partially shut.
• US futures: Recover modestly after sharp Friday declines (SPX –2.7%, NDX –3.5%, DJI –1.9%).
• Upcoming data: German WPI (Sep), OPEC MOMR, and speakers from BoE, Fed, and RBA.
• Holidays: US Columbus Day (bond market shut), Canadian Thanksgiving.
• US CPI: BLS confirms September CPI to be published Oct 24, 08:30 EDT / 13:30 BST.

Big Earnings week starting again

Big big week for companies especially with anticipated lowering of interest rates – so J Powells speech will be especially important on Tuesday.

Tuesday 14^th: Premarket: J P Morgan Chase & Co, Johnson & Johnson, Wells Fargo & Company, Goldman Sachs Group, Inc, Citigroup.

Wednesday 15th: Premarket: ASML Holdings N.V, Bank of America Corporation, Morgan Stanley, Abbott Laboratories.

Thursday 16^th: Premarket: Taiwan Semiconductor Manufacturing Company Ltd, The Charles Schwab Corporation

Friday 17^th: Premarket: American Express Company, State Street Corporation, Truist Financial Corporation.

Trade & Tariffs

• US–China tensions:
  • Trump announced 100% tariffs on Chinese imports effective Nov 1, plus export controls on critical software.
  • Over the weekend, softened tone via Truth Social, signalling willingness to cooperate with Beijing.
• China’s response:
  • Commerce Ministry labelled tariffs as “double standards” and said it “will not be afraid to fight.”
  • Defended rare earth export controls as legitimate; stressed they are not a full export ban.
  • Introduced special port fees on US vessels as countermeasures.
• Other trade headlines:
  • US considering tariff rebates, no decision yet.
  • EU planning 50% steel import tariffs above 2013 quota (FT).
  • US rejects UN global carbon tax proposal, considering probes and sanctions on supporting nations.
  • Canada drafting new industrial strategy to offset US tariffs; exploring new markets.
  • Switzerland–China to accelerate FTA upgrade.

Macro & Policy

• Fed outlook:
  • Musalem (2025 voter): inflation still high, labour cooling; open to another insurance rate cut but warned of limited room for easing.
  • Industrial Production data delayed due to shutdown; data gaps persist.
  • Shutdown impact: Federal layoffs in the thousands; administration diverted funds to pay troops.
• US domestic:
  • Trump warned “Democrat-oriented” layoffs; reiterated shutdown blame.
  • VP Vance confirmed Justice Department not following Trump orders to prosecute opponents.
  • New research (FT): capital rule easing could unlock $2.6tn in US bank lending capacity.

APAC Session

• Japan: Closed for holiday.
• ASX 200: Lower on tech, energy, and telecom weakness; gold miners rallied as spot gold rebounded above $4,000/oz, a new record.
• KOSPI: Down; Samsung Electronics hit with USD 445.5m patent verdict.
• China: Exports +8.3% YoY (exp. +6%), Imports +7.4% YoY (exp. +1.5%); trade surplus $90.45bn.
• FX:
  • USD steady (DXY flat) amid mixed tone and thin trading.
  • EUR rangebound; France political reshuffle (Lecornu reappointed PM).
  • GBP steady near highs; reports of £7bn pension tax raid in upcoming UK Budget.
  • JPY slightly weaker; USD/JPY >150 with BoJ holiday.
  • AUD/NZD firmer on commodity rebound.
• Rates:
  • USTs little changed (US bond market closed).
  • Bunds slightly lower ahead of German WPI.
  • JGB auction saw strong demand despite earlier yield rise.
• Commodities:
  • Oil: Modest rebound post Friday’s 3–4% drop; Brent regains some ground.
  • Gold: Record >$4,000/oz, Goldman Sachs lifts Dec-2026 forecast to $4,900/oz.
  • Copper: Firm after Trump’s softer China tone; risk appetite improving.
• Crypto: Bitcoin volatile, partially rebounding after prior week’s “crypto meltdown.”

EU: DAX Technical Analysis

The Germany 40 (4H) has pulled back after failing to hold above the 24,510 breakout level, slipping toward the 24,300–24,350 zone. Price is now hovering near the 200 EMA (24,050), which is acting as dynamic support. The RSI (46) shows neutral-to-weak momentum, while the MACD remains below the signal line, confirming short-term bearish pressure but not a breakdown.

Structurally, the uptrend remains intact as long as price holds above 24,000. Resistance is seen at 24,510, followed by the all-time high (24,648). A recovery above 24,510 would reinstate the bullish bias, while a decisive break below the 200 EMA could open room toward 23,900–23,800. Tone: corrective pullback within a broader uptrend.

Geopolitics

Middle East

• Egypt Summit: Over 20 world leaders (including Trump, Starmer, Macron, Costa) to attend Gaza peace signing.
• Hostage release: Israel expects 20 hostages freed early Monday; Palestinian prisoners to follow.
• Iran: Rejects joining Abraham Accords, calls idea “wishful thinking”; open to “fair and balanced” US nuclear proposal via mediators.

Russia–Ukraine

• Trump: Considering sending Tomahawk missiles to Ukraine but “not looking for escalation.”
• Zelensky: Spoke with Trump, thanked US for support; said missiles would target military sites only.
• Russia: Massive drone/missile barrage; Ukraine hit energy infrastructure.
• EU: Agreed to restrict movement of Russian diplomats amid sabotage concerns.

Other global

• Pakistan–Afghanistan: Deadly border clashes (22 Pakistani troops, >200 Afghan deaths).
• Philippines–China: Naval collision near Sandy Cay; both sides blame each other.
• North Korea–Russia: Kim and Medvedev discussed deeper military cooperation; DPRK vows to “destroy all threats.”
• EU–UK:
  • UK PM Starmer revising planning bill and preparing tax rises & spending cuts for November Budget.
  • France: Lecornu confirms government reformation; Roland Lescure stays Finance Minister.
  • ECB’s Vujcic: “Rates are at a good place,” signalling stable policy stance.