Fed Chairman Jerome Powell’s dovish remarks—particularly the signal that balance sheet reduction (QT) may soon stop—boosted risk appetite in global markets. Gold raced to new records, while US bond yields and the dollar declined. Powell said, “We may approach that point in the coming months,” indicating that liquidity conditions are beginning to tighten.
However, US-China trade tensions are escalating again.
Although President Donald Trump’s statement that he is considering ending some trade ties increased tensions, the IMF’s upward revision of its 2026 outlook and strong bank balance sheets softened risk sentiment. US futures rose, while the VIX retreated; Shanghai and Hong Kong stock markets rose more than 1% on expectations of stimulus at next week’s plenum. The postponement of pension reform in France supported the euro, BTP, and CAC40; LVMH’s return to growth has strengthened its luxury segment.On the banking front, investment banking activity is providing support to the year-end: some major banks are reporting strong fee income, while management remains cautious about tariff headline risk. Markets are pricing in two quarter-point interest rate cuts by the end of the year and the end of QT; This mix pushed gold above $4,200.
Today’s Brief Notes
Agenda: Fed Beige Book, FOMC officials’ speeches, IMF-World Bank meetings; earnings of companies such as BofA, Morgan Stanley, United Airlines.
Deflation signals continue in China; Expectations for additional policy support are increasing.
US-China imposed additional port fees on maritime shipping; trade war moved to sea routes.
Oil declined due to weak demand concerns; IEA forecasts supply surplus in 2026.
EV sales increased 26% in September to 2.1 million units; Two-thirds of the demand came from China.
