Authored by Tuomas Malinen via gnseconomics.com,

On Friday, the largest market liquidation in crypto-market history occurred after President Trump posted on social media, threatening China with 100% tariffs.

Some investors lost their whole portfolio before Mr. President reversed course with a social media entry downplaying the risks.

Those who lost their life savings in yet another crypto-carnage could blame President Trump, and you would be correct, partially. Yet, this figure presents the primary reason we’re here.

Figure 1. The balance sheet of the Bank of Japan, European Central Bank, Federal Reserve and the People’s Bank of China as a share of gross domestic product of the world. Source: GnS Economics, BoJ, ECB, Fed, PBoC, IMF

I have not really cared to update the graph anymore, but due to the asset roll-off of the Federal Reserve, the share has most likely dropped a bit (see the share that includes all major central banks). That is also not the main point here, but what happened before 2021.

Figure 2. Total assets of the Federal Reserve. Source: St. Louis Fed.

For a very long time, the assets (securities) held by the central banks grew modestly. Unless there was a crisis, the assets usually were below 10% of GDP. Not anymore.

The monetary meddling of the central banks after the GFC led to a massive increase in the money in circulation. This is the most update data on M2 money (“broad money”) in circulation in the world.1 I’ve added a few key policy actions to clarify the message conveyed by the graph.

Figure 3. M2 money as a share of GDP in the world. Source: GnS Economics, IMF.

After the dismantling of the Bretton Woods system, where currencies were pegged to the U.S. dollar, which was pegged to gold, between 1971 and 1976, the amount of money has grown rapidly. The first “Fed easing” shown in the figure refers to the Federal Reserve’s decision to lower interest rates after the shock delivered by Fed Chairman Paul Volcker, which was enacted to curb the runaway inflation caused by the oil shocks of the 1980s. Interest rates in the U.S. reached their peak in the vicinity of 20% in June 1981, after which they were cut to under 10% in two years.

The Dot-com bubble, its implosion, and the lowering of the interest rates from 6.5% to less than 2% in just a year by Fed Chair Alan Greenspan delivered another impulse to the supply of money. However, the major turn came in the Great Financial Crisis and the quantitative easing (securities purchase programs) launched after. They transformed central banks into active participants not only in money creation, a traditionally exclusive role for commercial banks, but also in the markets. I have detailed the (detrimental) effects of these policies in two Epoch Times articles (this and this).

However, the most significant shock came in the spring of 2020. From my Epoch Times piece:

In March 2020, the coronavirus outbreak was freaking out the markets, and on March 16, 2020, they crashed. The volatility index reached 82.69, the highest on record. The Dow Jones Industrial Average plunged by 2997 points, or 12.9 percent—the worst point drop on record.

On the 16th, the New York Fed announced that it will add $500 billion in the over-night loans to repo-market. On the 17th, the Fed announced that it would use $1 trillion to mob up corporate paper from issuers. On the 18th, the European Central Bank announced that it would buy 750 billion euros worth of bonds and securities. On the 19th, the Fed announced that it would create lending facility to money market mutual funds. On March 25, 2020, interest rates of short-term corporate debt surged to 2.43 percent above the federal-funds rate, the over-night lending rate of the Fed, which led the central bank to issue a program targeted at the corporate markets.

At the end of May 2020, the Fed backstopped “repo” and U.S. Treasury markets, intervened in corporate commercial-paper and municipal bond markets and short-term money-markets, and bought corporate bond ETFs, including some speculative-grade, or “junk,” corporate debt. It also launched its “Main Street Lending” program, where it provided loans to middle-market businesses. Alas, come June 2020, the Fed had become the financial markets of the United States. The bailout operations enacted by Greenspan had reached the point where the fears that the creation of the Fed would ‘socialize’ the economy had materialized.

So, yes, you lost your money, partly because of the reckless tweeting of President Trump, but mostly because central banks have become active players in the economy, printing massive amounts of money, destroying the risk-and-reward relationship.

This is how enormous bubbles form, and they will eventually burst.

The main takeaway from the above is that central banks will, most likely, uphold the bubble by any means necessary, because if they did not, their credibility would be shattered.

While many market commentators are currently (still) celebrating the rally, it would not take long for them to identify the true culprits behind the “exuberance,” that is, the central banks.

The outcome would, (again) most likely be the end of the modern central banks, and while I would welcome such a development, many are very afraid of what it would imply (more on that later).

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Shares of the LGBTQ+ dating app Grindr surged around midday in New York after a Semafor report, citing company insiders, said they are “discussing taking the company private after a stock slide forced its owners into a precarious personal financial position.”

The report says the two controlling shareholders, Raymond Zage and James Lu, are in talks to secure debt financing from Fortress Investment Group to buy out Grindr.

Before the Semafor’s report was published, the dating app company had a market capitalization of about $2.4 billion. 

Here’s more about the potential buyout deal:

Zage and Lu have discussed a buyout price of around $15 a share, some of the people said, cautioning that number could change. A deal at that price would value the company at around $3 billion.

Before the report hit the wires, shares were down 30.5% year-to-date. Afterward, the stock jumped 16%.

It’s important to note that the float is 32.5% short, equivalent to about 10.5 million shares, with 5.3 days to cover.

More from Semafor:

Any deal would likely carry national-security implications. Grindr was originally owned by a Chinese firm, which sold it in 2020 after the Committee on Foreign Investment in the United States raised concerns about sensitive personal data — which could be used in blackmail attempts — being accessed by Beijing. Zage, a US expat who is now a Singaporean national, surpassed 50% ownership of Grindr just last month through stock buybacks. Lu is a Chinese-born US citizen, according to the South China Morning Post.

Taking Grindr private could arrest a stock slide that appears to have little to do with the company’s financial performance: Profits were up 25% in the second quarter from a year ago, but the stock has fallen more than 20% since late September. Grindr went public in 2022 through a blank-check company.

Corporate filings show that Zage and Lu, who together owned more than 60% of Grindr’s shares as of June, had pledged nearly all of their stock for personal loans. That lender, the people said, is SeaTown Holdings, a unit of Temasek, which seized the shares last week after the loans became undercollateralized.

Short squeeze?

ASP Isotopes, a name we pointed out to our subscribers about one week ago, is up more than 13% this morning after it issued a business update that highlights how well-positioned it is across both technology and medical applications.

ASP announced its largest-ever supply contract for enriched silicon-28 and a strategic acquisition of a U.S.-based radiopharmacy — two moves that deepen its exposure to the fast-growing quantum computing and nuclear medicine markets.

LEU just hit $400.

For those looking for a cheap uranium enrichment alternative, we told subs 1 week ago to go long ASPI. It’s starting to move. https://t.co/i1t7vf3bdl

— zerohedge (@zerohedge) October 10, 2025

This morning the company said it “entered into a supply contract with a U.S.-based customer for enriched silicon-28, with deliveries expected during Q1 2026,” calling it “the Company’s largest silicon-28 contract to date.”

Enriched silicon-28 is a critical material for quantum computing and advanced semiconductor architectures. As the company explained, “By removing the nuclear spin noise present in natural silicon, enriched silicon-28 provides a pristine environment for qubits, dramatically improving coherence times and overall device performance.” This makes the material foundational for scalable, fault-tolerant quantum processors — the building blocks of the quantum computing revolution.

Chief Commercial Officer Viktor Petkov emphasized the growing demand: “This significant customer order for silicon-28 underscores how our Electronic Gases strategy is gaining real traction across multiple end markets. Enriched silicon is emerging as a cornerstone material not only for quantum computing but also for high-precision semiconductor and photonics applications. Our goal is to become the world’s most reliable supplier of enriched silane and other isotopically pure gases — a foundation for the technologies driving the next industrial revolution.”

In addition to its quantum-related progress, the company announced its first U.S. acquisition in nuclear medicine — the purchase of an independent radiopharmacy in Florida to complement and expand PET Labs, its South African radiopharmaceutical operation. The acquisition is “expected to be accretive to 2026 revenues, EBITDA and EPS,” and marks PET Labs’ first step beyond South Africa. The Florida facility currently offers SPECT services, with PET Labs planning to add PET services by 2027 to expand diagnostic capabilities and revenue.

ASP’s proprietary Aerodynamic Separation Process (ASP Technology) allows it to enrich both light and heavy isotopes, giving it reach across multiple critical trillion-dollar markets. The company is targeting demand “for isotopes such as Silicon-28, which will enable quantum computing, and Molybdenum-100, Molybdenum-98, Zinc-68, Ytterbium-176, and Nickel-64 for new, emerging healthcare applications, as well as Chlorine-37, Lithium-6, and Uranium-235 for green energy applications.”

As global supply chains for strategic materials tighten, ASP Isotopes’ position at the intersection of advanced computing, nuclear medicine, and clean energy could make it one of the most strategically valuable small-cap names in the sector.

ASPI remains one of our favorite names in the nuclear space — and a company we believe stands to benefit meaningfully from two of the most powerful macro themes ahead: the Trump administration’s stated interest in taking stakes in key U.S. commodity and energy suppliers, and the AI boom’s insatiable need for power, which we think will increasingly have to come from nuclear.

“Hey, I have an idea Mr President: Why don’t you give him a pardon? Give him a pardon, come on,” Trump said, pointing at Netanyahu during his big Monday speech before the Knesset in Jerusalem, upon the historic release of all remaining Israeli hostages by Hamas.

Trump stated: “By the way, that was not in the speech, you probably know.” He said this as pro-Netanyahu lawmakers gave Trump a long standing ovation, which actually happened more than once during and after the somewhat lengthy address. When Trump talked about the idea of a pardon, Knesset members shouted: “Bibi! Bibi!”

Pointing at Herzog, President Trump said: “But I happen to like this gentleman over here, and it just seems to make so much sense.”

That’s when he called Netanyahu “one of the greatest” wartime leaders, adding: “And cigars and Champagne, who the hell cares?”

The Netanyahu trial goes back to 2019, and over the years Trump has at times called the whole saga “politically motivated” and asserted that the prime minister been through a “Horror Show”.

The trial focuses on three corruption cases – including charges of fraud and breach of trust, as well as charges of bribery. The allegations range from illegally receiving expensive gifts based on political favors, to quid pro quo agreements with some Israeli media sources for more favorable coverage, to authorizing telecom-related regulatory decisions to benefit friends and allies.

The opposition in Israel has long accused Netanyahu of seeking prolong the war in Gaza for the sake of his own political survival – all while living a lavish lifestyle. 

As for Trump’s reference to “cigars and Champagne” during his Monday speech, Newsweek reviews of the pending case that–

Evidence submitted includes recordings, text messages, and police documents. Notably, testimony from key figures including Hollywood producer Arnon Milchan has brought to light extravagant gifts allegedly given to Netanyahu and his wife, including Champagne and cigars.

Trump calls on the Israeli President to pardon Netanyahu:

“Cigars and champagne – who the hell cares about it?”

Netanyahu is standing trial for bribery, fraud and breach of trust, including allegedly accepting 700,000 shekels (approx. $210,000) worth of luxury goods in bribes. pic.twitter.com/iN9wqkSWut

— Adam Schwarz (@AdamJSchwarz) October 13, 2025

Trump was thanked by Netanyahu during the Knesset proceedings for his “pivotal leadership in putting forward a proposal that got the backing of almost the entire world.”

He said of Trump’s ceasefire plan that it “brings all our hostages home” and “ends the war by achieving all our objectives” and it also “opens the door to an historic expansion of peace in our region and beyond our region.”

Authored by Daniel McCarthy via RealClearPolitics.com,

Battles over Columbus Day aren’t really about Christopher Columbus at all — they’re about whether America should exist.

“Columbus’s journey carried thousands of years of wisdom, philosophy, reason, and culture across the Atlantic into the Americas — paving the way for the ultimate triumph of Western civilization less than three centuries later on July 4, 1776,” President Donald Trump says in his Columbus Day proclamation.

Yet that’s why the holiday has so many enemies.

Unlike progressive movements of decades past, today’s ideological left doesn’t particularly want to lay claim to America’s heritage.

Even the Communist Party USA once made an effort to brand its radical creed as 20th-century “Americanism.”

Karl Marx himself saw the spread of bourgeois civilization as inevitable and even necessary for creating the conditions of worldwide class revolution.

That civilization is what opponents of Columbus Day reject.

Columbus extended the horizons of Western civilization, which is what the holiday in his name recognizes.

Yes, Italian Americans are especially proud of Columbus, a son of Italy and the seafaring republic of Genoa in particular.

But this isn’t just an ethnic holiday — everyone whose ancestors weren’t already in this hemisphere when Columbus arrived owes the heroic explorer a debt of gratitude.

By forging permanent ties between the Americas and the wider world, Columbus made our lives and way of life possible.

He opened the way not only for Europeans and Christians like himself but ultimately for people of every land and religion to seek freedom, safety and opportunity in a New World without the class constraints and ancient hatreds of the Old World.

In 1492, the same year Columbus sailed into the uncharted Atlantic, his Spanish royal patrons banished Jews from their land — yet because of Columbus’s discoveries, Jews would one day find a haven half a world away from the persecutions they long endured elsewhere.

Columbus didn’t introduce slavery to the Americas — the natives already had that evil institution before Europeans came.

He did, however, set in motion the end of the New World’s own characteristic horrors, such as the Aztecs’ human sacrifices and the cannibalism practiced by the Caribs.

Columbus deserves no blame for the diseases that devastated native populations: Sooner or later, these peoples with no immunity to infections which most of the human race had contended with for generations would have suffered the same tragic fate from contact with the outside world.

The Black Death that ravaged medieval Europe came from abroad, too, from contact with Asia — only in the modern world, as a result of Western science and medicine, is humanity free to travel and trade with little fear pestilence will follow.

And when new diseases like COVID do spread around the globe, the resources of civilization that Columbus helped spread are able to meet the threat.

Columbus Day is not meant to be a saint’s day.

Like our nation’s Founding Fathers, Columbus was flawed, and his reputation bears the stains of his age’s evils, including slavery.

But like them, Columbus was an exemplar of much that is best in our character.

He was the first and, in many ways, an archetypal American, an enterprising immigrant who risked everything for a new hope, who not only set out to improve his family’s lot in life but understood his work as service to God.

He was our first pioneer, and he’s been honored in the United States since the late 18th century, when New York City’s Society of Tammany — also known as the Columbian Order — began celebrating his October birthday.

The federal holiday is more recent, with Congress first asking Franklin Roosevelt to proclaim a day for Columbus in the 1930s, and the statutory holiday established in 1971.

But it’s the pitched opposition to Columbus that’s really novel.

Mayor Eric Adams has had to urge New York’s Landmarks Preservation Commission to grant protected status to the admiral’s statues, so Zohran Mamdani can’t tear them down if he becomes mayor.

On college campuses and in state capitals across the country, left-wing activists call for replacing Columbus Day with an “Indigenous Peoples Day.”

It’s an ironic demand since the very notion of indigenous peoples only makes sense from a Eurocentric point of view.

Because every “indigenous” group at some point migrated from someplace else — usually displacing older, more indigenous populations in the process — the term doesn’t refer to the original inhabitants of any land.

Instead, it means populations predating the arrival of Europeans or other ideologically disfavored groups: Jews certainly aren’t indigenous enough to the Holy Land for the “anti-colonialist” left.

Columbus Day celebrates the birthday of Western civilization as something not confined only to Europe.

Yet in our country, all too many of this civilization’s spoiled heirs regret the very achievements that have made their existence possible, including the supreme achievements of Christopher Columbus.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of ZeroHedge.

We’ve been bullish on rare earth miners for over three months— long before the mainstream press caught on. While the media is just catching up, Zerohedge have hopefully been enjoying locking in multiples of gains in popular rare earth stocks like USA Rare Earths (USAR) and MP Materials (MP) as the Pentagon is quietly ramping up its billion-dollar mineral stockpiling spree, now being highlighted by the Financial Times over the weekend. 

Recall, all the way back on July 11th we wrote “The Coming Rare Earth Revolution And How To Profit” for our premium subscribers.USAR was trading at about $11 at the time is is bid at $38 this morning. MP Materials was trading at about $45 at the time and this morning is bid at about $86.

3 months later https://t.co/RHameHvU2H pic.twitter.com/F8A6faaNB7

— zerohedge (@zerohedge) October 12, 2025

According to filings from the Defense Logistics Agency (DLA), the U.S. Department of Defense has moved to secure up to $1 billion in critical minerals — from cobalt and antimony to scandium and tantalum — as part of a global race to reduce dependence on China, according to Financial Times. 

One former defense official summed it up: “They’re definitely looking for more, and they’re doing it in a deliberate and expansive way.”

The acceleration follows China’s sweeping new export controls on rare earths, which prompted Donald Trump to cancel a planned meeting with Xi Jinping, warning: “There is no way that China should be allowed to hold the world ‘captive’ but that seems to have been their plan.”

The Pentagon’s urgency is clear. “China’s ability to turn off the supply of these critical minerals would have a direct, palpable and adverse effect on US ability to field the kind of high-tech capabilities that we’re going to need for any kind of strategic competition or conflict,” said Stephanie Barna of Covington & Burling in Washington.

FT writes that recent DLA filings show proposed purchases including $500 million in cobalt, $245 million in antimony from U.S. Antimony Corp (USAC), $100 million in tantalum, and $45 million in scandium from Rio Tinto and APL Engineered Materials.

Analysts at Jefferies said the Rio Tinto scandium deal was priced “higher than market expectations.” The DLA itself noted that Chinese export controls had “constrained the supply chain.”

The One Big Beautiful Bill Act (OBBA) adds fuel — $7.5 billion earmarked for critical minerals, including $2 billion to fortify the national stockpile and another $5 billion to expand U.S. supply chains. As one former official put it, offices handling mineral security are now “flush with cash.”

Some in the industry were stunned by the scale. “Market participants have been taken aback by the volumes requested by the DLA,” said Cristina Belda of Argus Media. “In most cases, the requested tonnages exceed the US’s annual production and import levels.”

Demand shocks are already visible. Germanium prices have spiked on reduced Chinese exports, antimony trioxide prices have nearly doubled, and the Pentagon is even evaluating acquisitions of rare earths, tungsten, bismuth, and indium. Fastmarkets’ Solomon Cefai warned that “non-China supply would not be pressured by the volumes the DLA is looking at.”

Bottom line: Washington is now openly doing what Zerohedge readers positioned for months ago — securing physical exposure to the minerals that will define the next geopolitical cycle.

As Trump cranks up (and then walks back) rhetoric towards China, the Dutch government just turned up the Beijing-baiting amplifier to ’11’.

In a sudden and quite chocking move, The FT reports that the Dutch government has taken control of Chinese-owned semiconductor maker Nexperia, warning of risks to Europe’s economic security after alleging “serious governance shortcomings” at the company.

Nexperia, the European semiconductor unit of China’s Wingtech Technology Co. is a key supplier to the automotive and consumer electronics industries. The Sept. 30 court order invoked the Goods Availability Act for the first time, a piece of legislation enacted more than 70 years ago to ensure access to critical products in emergencies.

“The decision aims to prevent a situation in which the goods produced by Nexperia would become unavailable in an emergency,” the government said in a statement late on Sunday, against a backdrop of escalating trade tensions between China and the US and its allies.

The move escalates frictions between western countries and China over access to high-end technology such as advanced semiconductors and critical raw materials.

The Netherlands should “truly adhere to market principles and refrain from politicising economic and trade issues”, said spokesperson Lin Jian.

On Thursday, China placed sweeping restrictions on the exports of rare earths used in products from cars to wind turbines.

The Dutch ministry said it invoked the country’s Goods Availability Act because of “recent and acute serious governance shortcomings and actions” at Nexperia, which is based in the Netherlands and has been majority-owned by Chinese technology group Wingtech since 2019.

As one would imagine, this move was not received well by Wingtech, which called the Dutch move excessive and based on geopolitical bias.

“We strongly protest against the discriminatory treatment targeting Chinese firms,” the company said in a statement on Monday posted on Chinese social media platform WeChat, urging the Dutch government to revoke the directives.

We have initiated all legal and diplomatic channels, it said.

As Bloomberg reports, the move was actually instigated as a management coup:

Nexperia’s own executives called for a probe into the company, headquartered in Nijmegen, the Netherlands. Its Dutch chief legal officer, supported by German chief operating officer and chief financial officer filed a petition to an Amsterdam court on Oct. 1 seeking an investigation into the firm, Wingtech said.

The demands of the European executives closely aligned with directives from the Dutch government, Wingtech said, framing the move as an effort to use political pressure to deprive shareholders of their rights and overturn the company’s legitimate governance structure.

The Dutch government said Nexperia showed “recent and acute signals of serious governance shortcomings,” without elaborating. “These signals posed a threat to the continuity and safeguarding on Dutch and European soil of crucial technological knowledge and capabilities,” it said in the statement.

While Nexperia can continue regular production, the government can now block or reverse its decisions. The Hague is demanding that Wingtech suspend changes to Nexperia’s assets, business or personnel for as much as a year, a requirement that extends to its subsidiaries, the Chinese firm said in an exchange filing on Sunday.

Its shares plunged by its daily limit of 10% in Shanghai on Monday.

The court also ordered that all shares in Nexperia – except one – should be placed under custodial management by a designated individual, not yet named, for management purposes, Wingtech said.

“China always opposes overstretching the concept of national security and discriminatory moves that target companies from certain countries,” China Foreign Ministry spokesman Lin Jian said at a regular press briefing in Beijing on Monday.

“China is firmly resolved in defending its own legitimate and lawful rights and interests.”

Washington last year added Wingtech to its “entity list”, accusing the company of helping China acquire sensitive semiconductor manufacturing technology.

The designation requires US companies to seek a license to sell to them. Those license requests are often denied.

The US commerce department last month introduced new rules that extend the sales restrictions to subsidiaries of companies on the entity list, meaning that Nexperia would be subject to restrictions because of its Wingtech ownership.

We can only imagine the reaction in Washington or Brussels were this kind of action undertaken by Beijing on a US tech firm within China.

US markets closed last week with the largest one-day loss in six months, with Asian overnight futures pointed to a sharp downdraft on Monday. HSCEI and Hang Seng futures closed down 5% (limit down) on Friday night. 
However, on Sunday Trump walked back some of his Friday comments, stating that “November 1 is an eternity” and expressing optimism that “they will be fine with China.” As a result, amid some fringe expectations of a “Black Monday” futures are solidly in the green as Trump strikes a reconciliatory tone in social media posts yesterday with futures pointing to a 50% retracement of Friday’s losses with Tech leading an ‘Everything Rally’ as the bond market is closed for the Columbus Day holiday and there are no expected data releases. As of 8:00am ET. S&P futures are 1.2% higher while Nasdaq futures gain 1.7% with Mag7 and Semis among the largest gainers pre-market. Cyclicals are seeing material outperformance to Defensives with rare earth plays seeing double-digit gains. In commodities, all 3 complexes are recovering with crude and precious metals the standouts as gold hits a new record high around $4080 and silver trades above $51.50 its highest level in decades amid a historic short squeeze in London. Cryptocurrencies bounced following the weekend’s selloff. French bonds held steady as President Emmanuel Macron unveiled a new cabinet to contain a growing political crisis. The dollar steadied and oil rose for the first time in three days. 

In premarket trading, Mag 7 names are all green after Friday’s rout (Nvidia +2.7%, Apple +1.4%, Microsoft +1.1%, Meta +1.4%, Tesla +1.7%, Amazon +1.3%, Alphabet +1.2%).

• US-listed rare earth and critical mineral stocks rise following strong gains among Asian peers, as fresh tensions between Beijing and Washington over China’s exports of the critical minerals fueled bets on alternative suppliers
• Critical Metals (CRML) advances 18%; MP Materials (MP) +8%, Energy Fuels (UUUU) +12%
• Blackstone Inc. (BX) rises 2% after agreeing to sell a portfolio of UK warehouses valued at $1.3 billion to Tritax Big Box REIT Plc in a deal that will hand the alternative asset manager a stake in the landlord.
• Estee Lauder (EL) climbs 4.8% after Goldman Sachs upgraded the beauty company to buy from neutral.
• Fastenal (FAST) falls 4% after the maker of sheet metal screws posted 3Q profit that slightly missed estimates.
• StubHub (STUB) gains 4% after the company received several bullish initiations following its initial public offering, with analysts expecting the company to further leverage its dominant position as it enters the lucrative primary ticketing market.
• Warner Bros Discovery (WBD) rises 4% as the media company rejected Paramount Skydance Corp.’s initial takeover approach for being too low, according to reports that cited people familiar with the matter.

In corporate news, Morgan Stanley’s asset-management business is said to have asked to redeem some money it invested in a Jefferies fund with large exposure to the trade debt of First Brands. State Street and Marex Group are expanding their outsourced trading businesses.

Stock futures are bouncing back from Friday’s dramatic selloff after Trump signaled openness to a deal with China. Treasury futures slipped, with cash trading in US bonds suspended for Columbus Day. The dash for gold persisted as the metal neared $4,080 an ounce. In Europe, French bonds held steady as President Emmanuel Macron unveiled a new cabinet to contain a growing political crisis. Silver surged to its highest level in decades amid a historic short squeeze in London. Cryptocurrencies bounced following the weekend’s selloff. The dollar steadied and oil rose for the first time in three days.

“There is a belief emerging that this is mostly negotiating tactics on both sides,” wrote Jim Reid, global head of macro research and thematic strategy at Deutsche Bank AG. “The market will begin to price in a reasonable probability of a deal once the initial shock fades.”

Still, there’s plenty to keep traders tense, with Morgan Stanley’s Mike Wilson said that a bear-case scenario could see the S&P 500 sink as much as 11% if trade tensions between the US and China aren’t resolved before a November deadline. Deutsche Bank strategists said overall equity positioning is moderately overweight but not stretched, and markets could follow a scenario from 2021 when stocks suffered a modest pull back before resuming a strong, steady rally. 

With the VIX remaining above the key 20 level, the next few days will be a test of whether investors continue the systematic dip buying seen in recent months. The current three-year bull market has seen the S&P 500 add about $28 trillion in market value, but history suggests gains need to broaden out to be maintained.

As well as US-China developments, investors will focus on earnings season this week which kicks off with the banks tomorrow. US financials kick things off tomorrow, while AI-related updates including TSMC and Samsung in Asia and ASML in Europe will be closely watched. Analysts tracked by Bloomberg Intelligence expect profit growth of 7.4% for US stocks in the third quarter.

A Citigroup index tracking US earnings revisions – the number of analysts upgrading versus downgrading estimates – turned flat for the first time since August, while RBC strategist Lori Calvasina said the rate of upward EPS estimate revisions has been fading. If last season’s strong sentiment around earnings can’t be maintained, stocks may face “a period of digestion,” Calvasina said. High valuations also leave little patience for companies that don’t meet the bar. The S&P 500 trades at 22 times P/E, a big premium to the rest of the world.

As JPMorgan, Goldman and Citigroup prepare to report third-quarter earnings on Tuesday, options on S&P 500 members imply an average 4.7% swing after results, data compiled by Bloomberg show. That’s near July’s level, when the expected move was the largest for an earnings-season kickoff since 2022, using JPMorgan’s release as the starting point.

“For earnings, the focus will remain on the richly-valued areas of the market,” said Geoff Yu, senior macro strategist at BNY. “We’ve seen a more defensive posture take hold and it’s a time for validation and confirmation.”

Outside of earnings, global policymakers and finance ministers gather this week in Washington for the IMF/World Bank fall meetings after a chorus of warnings that a stock bubble focused on AI might burst before long. 

In Europe, the Stoxx 600 is up 0.4%, trimming part of Friday’s steep decline after President Donald Trump backpedaled on his tariff threats against China, signaling a willingness to negotiate. Mining, real estate and technology shares lead gains.

In FX, the Japanese yen is the weakest of the G-10 currencies, falling 0.6% against the greenback while the Swiss franc is not far behind. The Aussie dollar outperforms, rising 0.8%.

In rates, treasury futures came under early pressure from the reopen, partially unwinding a late bid seen in Friday’s session, after President Donald Trump’s administration signaled openness to a deal with China to quell the fresh trade tensions. Cash trading in Treasuries is closed for Columbus Day. In Europe, gilts lead a modest advance in European government bonds. French bonds held steady as President Emmanuel Macron unveiled a new cabinet to contain a growing political crisis

In commodities, spot gold rises over $50 to another record. WTI crude futures gain 2% to $60 a barrel. 

There is nothing on the calendar due to the Columbus Day holiday. 

Market Snapshot

• S&P 500 mini +1.1%
• Nasdaq 100 mini +1.6%
• Russell 2000 mini +1.7%
• Stoxx Europe 600 +0.4%
• DAX +0.5%
• CAC 40 +0.5%
• 10-year Treasury yield unchanged at 4.03%
• VIX -2.2 points at 19.48
• Bloomberg Dollar Index little changed at 1214.31
• euro -0.2% at $1.1593
• WTI crude +1.9% at $60/barrel

Top Overnight News

• All remaining Israeli hostages were released by Hamas. Israel is in the process of releasing almost 2,000 Palestinian prisoners. Donald Trump arrived in Israel and is to address the Knesset before traveling to Egypt for a deal-signing ceremony. The Israeli PM’s office said Benjamin Netanyahu won’t go to the Egypt summit. BBG
• The Trump administration signaled openness to a deal with China while also warning that recent export controls announced by Beijing were a major barrier to talks. BBG
• Trump said on Friday that layoffs will be Democrat-oriented and it will be a lot of people. Trump separately commented that he is using his authority to direct the defence secretary to use all available funds to get troops paid on October 15th, while he added they identified funds to do this and Secretary Hegseth will use them to pay troops.
• JD Vance told Fox News that the longer the shutdown goes on, the more significant permanent layoffs will be. Trump said he’s directing the Defense Department to use funds the administration has identified to deliver paychecks to US troops on Oct. 15. Vance responded that the ‘President is looking at all his options’ when asked if Trump is considering invoking the Insurrection Act. Furthermore, he said that the Justice Department is not acting on orders by President Trump to prosecute his political opponents. BBG 
• The Pentagon is looking to buy as much as $1 billion of critical minerals to stockpile, the FT reported. China’s latest curbs on the export of batteries may have major impact on US companies, analysts say. BBG
• China’s exports rose at the fastest pace in six months in September, beating market expectations and underscoring the sector’s continued role as a key growth driver for the world’s second-largest economy. China exports +8.3% (vs. the Street +6.6%) and imports +7.4% (vs. the Street +1.8%). WSJ
• China’s auto sales growth accelerated in Sept vs. Aug (+6.6% Y/Y vs. +4.9% in Aug). RTRS
• Trump said he’d consider arming Ukraine with long-range Tomahawk missiles, but may first talk to Vladimir Putin in a bid to end the war. BBG
• Canada believes it is closing in on sectoral trade deals with the US, counting on Trump’s need for wins ahead of next year’s midterm elections. Melanie Joly, Canada’s minister of industry, said there was progress on landing trade deals, in particular for steel, which has been significantly hit by US tariffs. FT
• JPMorgan vowed to funnel $1.5 trillion into industries that bolster US economic security and resiliency over the next 10 years — an initiative that will invest billions of dollars in companies and hire bankers and other professionals. BBG
• Friday’s trade and tariff headlines fueled worries around a replay of April. The moves triggered heavy index-level hedging and record option volumes, even as cash equity trading remained relatively muted. S&P share volumes were only up +9% versus the 20-day moving average, while total U.S. options volume hit a new all-time high, eclipsing 100mm contracts for just the second time (April 4th was the other — when the market fell -5.97%). Friday’s felt more like a rush to protect than a rush to exit positions per Goldman
• New research suggested that the upcoming easing of capital rules could unlock USD 2.6tln in lending capacity for US banks and increase pressure on regulators elsewhere to follow suit, according to FT.

Trade/Tariffs

• US President Trump posted on Sunday “Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it!!!”
• US VP Vance called on Beijing to “choose the path of reason” amid escalating trade tensions with China and said President Trump has “far more cards” if an aggressive response is required.
• China’s Commerce Ministry said the October 9th rare earth export control measures are legitimate and designed to better safeguard world peace and regional stability, while it added that rare earth export control measures do not constitute a ban on exports, and applications that meet the requirements will be granted licences. MOFCOM said the US announcement of 100% tariffs on China represents a classic case of double standards, and since the US-China talks in Madrid, the US has continuously introduced a series of new restrictions against China. It also stated that China’s position on tariff wars has been consistent, whereby they do not want to fight but are not afraid to fight. Furthermore, China urged the US to promptly correct its erroneous practices and warned that should the US persist in its course, China will resolutely take corresponding measures to safeguard its legitimate rights and interests, as well as noted that the US decision to impose port fees on relevant Chinese vessels meant China “had no choice but to take countermeasures”, and that China’s decision to impose a special port fee on US-related vessels are necessary defensive actions.
• China’s Foreign Ministry urges US to promptly correct its “wrong practices” in regards to the new US tariffs.
• China Customs spokesperson said US measures on shipping fees are a typical show of unilateralism and protectionism, while the spokesperson added that China’s countermeasures are necessary and are defensive actions. Furthermore, it was stated that China’s measures aim to safeguard the legitimate rights of Chinese industries and firms, while they hope the US can face up to its own ‘mistakes’ and that the US gets back to the correct track of communication and negotiations.
• USTR Greer said the US reached out for a call with China after the export controls announcement, but Beijing deferred. It was also reported that Greer said significant progress was made in trade talks with Cambodia that will allow more export opportunities for US farmers.
• US said it is taking action to defend America from the UN’s first global carbon tax and that the administration unequivocally rejects this proposal, while the US is considering actions against nations that support this global carbon tax on American consumers. Furthermore, the US said possible actions include probes, visa restrictions, commercial penalties, additional port fees and sanctions on officials.
• Canadian Industry Minister Joly said the government is working on a new industrial strategy that seeks to open new markets for exporters and prioritise domestic procurement in the face of US tariffs, which have hurt steel, aluminium, forestry and automotive companies. It was also reported that Canadian Trade Minister Sidhu spoke with India’s Commerce Minister Goyal.
• Switzerland and China will accelerate trade discussions on upgrading their free-trade agreement, following a meeting between Swiss Foreign Minister Cassis and Chinese counterpart Wang on Friday.
• Indian Trade Delegation is to visit to US this week, via Reuters citing sources; good progress has reportedly been made. India and US are sticking to a fall deadline for an early part of the deal. India looking to buy more energy and gas from the US.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks began the week in the red as the region reacted to last Friday’s Trump tariff threats and the subsequent Wall St sell-off, although US equity futures rebounded due to the softer tone from Trump over the weekend, while Japanese markets were shut for a holiday. ASX 200 was dragged lower by underperformance in tech, energy, telecoms and defensives, while gold miners are at the other end of the spectrum after prices rebounded back above the USD 4,000/oz level to touch fresh record highs. KOSPI retreated amid tech weakness, and with index heavyweight Samsung Electronics pressured after it was hit by a USD 445.5mln jury verdict for infringing wireless communication patents. Hang Seng and Shanghai Comp were pressured following the flare-up of US-China trade frictions on Friday after US President Trump threatened massive tariffs on China and announced to impose a 100% additional tariff on China from November 1st, before softening his tone over the weekend, while participants digested the latest Chinese trade data, which showed both exports and imports topped forecasts.

Top Asian News

• China Customs Vice Minister said great efforts are needed to stabilise foreign trade in Q4 and that China’s foreign trade showed resilience with improving structure in Q1-Q3, but the current external environment is still complex and grim with rising uncertainties.
• US FCC chair said on Friday that US ecommerce websites were removing millions of prohibited Chinese electronic items from companies like Huawei.
• Dutch government said it is intervening in Dutch chipmaker Nexperia and stated that there are serious administrative shortcomings at Nexperia, while it added that intervention means it may block or reverse company decisions and that the Co. is a subsidiary of Chinese electronics manufacturer Wingtech (600745 CH).

European bourses (STOXX 600 +0.4%) opened firmer across the board to varying degrees and have traded sideways throughout the morning. Markets are currently cheering US President Trump’s softer tone on China, after Friday’s threat of 100% tariffs on the region. European sectors hold a strong positive bias. The cyclical sectors are all towards the top of the pile, with Tech and Consumer Products leading whilst Telecoms lag a touch.

Top European News

• UK Chancellor Reeves is bumping up her plans for tax increases and spending cuts in the November Budget in order to create billions of pounds of additional fiscal “headroom” for the Treasury against future economic shocks, according to FT. It was separately reported that UK Chancellor Reeves is reportedly eyeing up a GBP 7bln tax raid on pensions in a desperate bid to plug a black hole in the Budget, with experts warning that Reeves could push up taxes both on pension contributions paid by working people, and on withdrawals by retirees, according to the Express. Meanwhile, The Telegraph reported that Chancellor Reeves has signalled that wealthier households will be asked to “contribute more” in her Budget next month.
• ECB’s Vujcic suggested he’s comfortable with the current policy settings as he noted that “Markets predict that interest rates will stay where they are,” and stated that “We are at a good place.”
• French Presidency announced a new government on Sunday with Laurent Nunez named as Interior Minister, Roland Lescure renamed as Finance Minister and Jean-Noel Barrot renamed as Foreign Minister.
• Several people were injured in the German town of Giessen after someone fired shots in a marketplace, according to DPA citing a police spokesperson.

FX

• Overall, a firmer day for the Dollar following Friday’s hefty fall from grace after US President Trump said there is no reason to meet Chinese President Xi, and threatened China with 100% tariffs. Over the weekend, US President Trump softened his tone and suggested the Xi meeting is not cancelled and “might” still happen, and added the US wants to help, not hurt China, although Trump did not withdraw his tariff threat. The Columbus Day holiday in the US means that cash bond markets are closed, although equity markets are open today. DXY resides in a current 98.83-99.21 band, and within Friday’s 98.81-99.43 range.
• EUR is subdued but within relatively tight parameters with ECB’s Vujcic suggesting he’s comfortable with current policy settings as he noted that “markets predict that interest rates will stay where they are” and stated, “they are at a good place”. Attention also remained on the political situation in France, where Lecornu returned as French PM and a new government was unveiled ahead of the budget deadline, with Lecornu asked to present a revised budget to parliament. ING suggests “That seems likely to fail and result in a no-confidence vote later this week, which will leave France without a government. A rise in German WPI this morning did little to move the charts.
• JPY stands as the clear laggard, closely followed by the CHF, as the haven FX unwind some of the recent haven flows from Friday and amid the Japanese holiday closure overnight. USD/JPY gapped higher overnight after ending Friday’s session towards the bottom of a 151.10-153.27 range, with today between 151.72-152.37 parameters.
• Cable sees mild losses despite a lack of pertinent catalysts this morning, but as the DXY clambers off worst levels, while press reports over the weekend noted that UK Chancellor Reeves is eyeing up a GBP 7bln tax raid on pensions to plug a black hole in the Budget. The pair trades in a 1.3329-1.3366 range at the time of writing.
• Antipodeans are the clear outperformers this morning amid the partial unwind of Friday’s fall, with the AUD surpassing peers and being aided by a boost in base metals and gold also holding firm despite a recovery in the dollar and in spite of the unwind of risk premium across other havens, albeit amid the ongoing US government shutdown.

Fixed Income

• A softer start to the week for USTs after the Trump-induced jump on Friday. To recap, USTs got to a 113-09 peak on Friday after escalating trade tensions between the US and China. Since, the US President has been a little softer in his language over the weekend and while China has commented, it has not announced a tit-for-tat or escalatory response just yet. Points that have taken some of the tension out of the situation allowing the risk tone to recover to a degree. As such, USTs are down to a 112-30 trough with losses of 6+ ticks at most, though markedly clear of the 112-16+ base from Friday. For the US today is a quieter than usual day owing to Columbus Day, while it is not a formal market holiday cash trade remains closed and was also shut overnight due to the absence of Japan. Nonetheless, Fed’s Paulson (2026) is scheduled and expected to provide a text and partake in a Q&A; we haven’t really heard from Paulson since she replaced Harker at the Philadelphia Fed at end-June.
• OATs underperform vs peers. In focus as re-appointed PM Lecornu addresses his newly formed cabinet before speaking to parliament at some point today. As a reminder, the current schedule means that a draft 2026 budget of some form needs to be presented today in order to allow discussion/negotiation and passage before year end.
• Bunds were initially lower, tracking USTs, but are now a touch firmer. Specifics for Germany are primarily on the fiscal front. Handelsblatt reports that the Finance Ministry is considering exempting from the debt brake the interest payments on loans for defence spending. An exemption that would provide a “double-digit billion amount” of leeway in the coming years. No discernible move in Bunds to the release. Bunds in a 129.13 to 129.34 band which is entirely within Friday’s 128.70 to 129.41 parameter.
• Gilts opened lower by a handful of ticks, directionally in-fitting with peers but with magnitudes a little more contained. Since, the benchmark has been as low as 91.01, posting losses of 15 ticks at most. However, Gilts have reverted back towards opening levels of 91.12 in a 91.01-26 band. Multiple outlets report that the Chancellor is looking at giving herself more than the GBP 9.9bln of headroom she had from her first budget. To do this, she is said to be considering a pension raid, among other measures to target wealthier households, according to the Express/Telegraph.

Commodities

• Crude benchmarks climb as markets digest the softening tone from US President Trump following increased trade tensions between China and US, where Trump threatened to impose an additional 100% tariff on China. After the largest selloff on Friday since late June, WTI and Brent have bounced and peaked shy of USD 60/bbl and USD 64/bbl respectively. Benchmarks currently oscillating in a tight c. USD 0.40/bbl range.
• Precious metals continue to break ATHs, with spot XAU peaking at USD 4078/oz during the APAC session and currently trading near its peak. Shrinking stockpiles of silver in London, in addition to the rising debt concerns and debasement from the dollar, have helped reinforce the rally in XAG. It has been calculated that “free float” silver has dropped to just 200mln ounces, down 75% from a high of over 850mln ounces in mid-2019. Further upside is still the theme in precious metals, with BofA lifting XAU and XAG forecasts to USD 5k/oz and USD 65/oz respectively.
• Base metals rebound as US President Trump plays down tariff scare. 3M LME Copper gapped higher and peaked at USD 10.67k/t, before finding support at USD 10.5k/t and currently oscillating between parameters formed early this session.
• Iraq set November Basrah medium crude Official Selling Price to Asia at plus USD 0.85/bbl vs Oman/Dubai and set the OSP to Europe at minus USD 2.80/bbl vs Dated Brent, while it set the OSP to North and South America at minus USD 1.40/bbl vs ASCI, according to SOMO.
• Ahead of LME Week (Oct 13th), Goldman Sachs expects copper prices to remain in a USD 10,000-11,000/t price range in 2026/2027, but sees downside to aluminium prices, while nickel is likely to remain in oversupply. Elsewhere, the desk sees the most likely medium-term path for silver prices as one of further gains, as Fed cuts attract inflows.
• BofA lifts gold price forecasts after spot gold hit their USD 4,000/oz forecast; says a 14% increase of investment demand – similar to what was seen this year – could lift gold to USD 5,000/oz, a 28% demand increase could see a rally to USD 6,000/oz. Still expect further upside in 2026: Gold potentially rising to USD 5,000/oz (USD 4,400 average). Silver potentially rising to USD 65/oz (USD 56.25/oz average). Downside risks to watch: US mid-term election outcomes impacting policy implementation. Possible Fed hawkish pivot if data improves. Supreme Court ruling on Trump’s tariffs.
• Saudi Aramco CEO says oil demand is resilient and there is large growth potential. Maximum sustained production capacity is 12mln BPD, can be done at no additional cost for one year Sees oil demand growing by 1.1-1.3mln BPD in 2025, and then 1.2-1.4mln BPD in 2026.

Geopolitics: Middle East

• Egypt will host an international summit on Monday regarding the agreement to end the war in Gaza which will be attended by more than 20 leaders, including US President Trump. It was also reported that UK PM Starmer will travel to Egypt to attend the signing ceremony of the Gaza peace plan, while French President Macron and European Council President Costa will also attend the peace summit in Egypt on Monday.
• Israeli government spokesperson said the release of hostages will begin early Monday morning and it expects all 20 living hostages to be released together at one time, while Palestinian prisoners will be released once all hostages set to be released on Monday are received.
• Israeli army radio announced that the first 6 hostages are to be released in Gaza City, while it was reported that Hamas published the names of the 20 hostages to be released.
• Iran’s Foreign Minister Araqchi said the possibility of Iran joining the Abraham Accords is US President Trump’s wishful thinking and Iran will never recognise an ‘occupier regime, which has committed genocide and killed children’, while he added that Tehran sees no reason for nuclear talks with European powers. Furthermore, he noted that Tehran and Washington are exchanging messages through mediators and that Tehran welcomes a potential ‘fair and balanced’ US nuclear proposal, but stated they have not received any request for nuclear negotiations from any country so far.
• All living hostages have now been released by Hamas, according to reports citing Kann News.
• US President Trump says Hamas will comply with plans to disarm; the war is over.

Geopoltics: Ukraine

• US President Trump said he may tell Russian President Putin that he may send Tomahawk missiles to Ukraine if the war is not settled.
• Ukrainian President Zelensky said he had a good, productive conversation with US President Trump and discussed strengthening air defence, while he is grateful for US readiness to support. Zelensky separately commented that they would only use Tomahawk missiles to pursue military goals, not to attack civilians in Russia, although he also noted that Trump has not yet made a decision on supplying Tomahawks to Ukraine and that he is waiting for Trump’s decision.
• Ukrainian drone struck Russia’s Bashneft oil refinery in Ufa.
• Russian Defence Ministry said Russian troops hit fuel and energy infrastructure facilities of Ukraine’s military-industrial complex, while it reported on Sunday morning that Russia shot down 72 Ukrainian drones over the previous day.
• UK Ministry of Defence said two Royal Air Force aircraft flew a 12-hour mission on Thursday with the US and NATO as they patrolled the border of Russia.

Geopoltics: Other

• Pakistan’s military said 22 Pakistani soldiers were killed and more than 200 died on the Afghan side in border clashes. Furthermore, Pakistan Foreign Minister said they expect the Taliban government to take concrete measures against terrorist elements and perpetrators that wish to derail Pakistan-Afghanistan relations, while Pakistan will take all possible measures to defend its own territory, sovereignty and people.
• Afghan Taliban Foreign Minister said Qatar and Saudi Arabia intervened for mediation after Saturday night firing between Afghanistan and Pakistan, while the official added that they have other ways to handle the situation if Pakistan does not want to engage in dialogue.
• Philippines said a government vessel was rammed by a Chinese ship at sea, while China’s Coast Guard said two Philippine government vessels ‘illegally entered’ waters near Sandy Cay without authorisation, which resulted in a collision, for which the Philippine side bears full responsibility. Furthermore, the Chinese Coast Guard stated that it lawfully took control measures against Philippine vessels and resolutely expelled them.
• North Korean Leader Kim held talks with Russia’s Medvedev and said the military must evolve to destroy all threats, while Kim said the nation’s military heroism will not only be seen in the defence of North Korea but also in outposts of socialist construction. Furthermore, Kim told Medvedev that he hopes to continue to strengthen cooperation between the two countries and closely engage in diverse exchanges and contacts to achieve common goals, according to KCNA.
• China and North Korea pledged to develop strategic communication and will strengthen strategic cooperation.

US Event Calendar

• 12:55 pm: Fed’s Paulson Speaks at NABE

DB’s Jim Reid concludes the overnight wrap

It’s hard to know where to start this morning with a continued US shutdown seemingly the least of our concerns these days. The plates currently spinning in markets are 1) the sudden resumption of trade hostilities between the US and China on Friday; 2) the reappointment of Lecornu as French Prime Minister late on Friday but with no obvious signs that he’ll find life any easier than what promoted him to resign a week before; 3) the collapse of the governing coalition in Japan on Friday just a week after Takaichi was elected as LDP leader which will make radical policymaking more challenging and even threaten her nomination as PM; 4) The US intervening to prop up the Argentinian Peso ahead of domestic mid-term elections (President Milei is an ally of Trump) in less than 2 weeks; 5) the London Silver market seeing one of the biggest short squeezes in history; 6) a peace deal with Hamas and Israel which should see the remaining hostages released today after two years of captivity; 7) signs of weakness in US credit, after the First Brands collapse a couple of weeks back, and bubbling private credit fears, post a long period of being bullet proof; and 8) a large fall in Crypto late on Friday, including a $10,000 fall in bitcoin in just a few hours. There’s probably more but these are the main themes in global markets.

After Friday’s sell-off where the S&P 500 (-2.71%) fell the most since April 10th, just as US Treasuries were under their peak post Liberation Day stress, Asian markets are also seeing a weak session this morning. US futures are bouncing though on hopes that US and China can negotiate through their disagreements. Throughout the region, the Hang Seng Tech index (-4.54%) is at the forefront of losses, while the Hang Seng index is also sinking (-3.49%), primarily influenced by substantial declines in major Chinese internet and technology companies. In addition, the CSI (-1.76%) and the Shanghai Composite (-1.30%) are also lower. Elsewhere Japan is shut for a public holiday, while the KOSPI (-1.62%) and the S&P/ASX 200 (-0.99%) are also weak. S&P 500 (+1.22%) and NASDAQ (+1.65%) futures are rebounding strongly as the US leadership rhetoric over the weekend showed willingness to negotiate.

When Trump returned to power, I was convinced it would mark the beginning of a much weaker US-China relationship, with a real risk of significant decoupling. Yet, over the past few months, US trade tensions have often seemed more focused on traditional allies, while the relationship with China appeared to be improving, albeit after some aggressive tariff threats. But Friday’s developments were a reminder of the underlying tension that still exists.

I suspect the recent improvement was driven more by US fears of empty shelves if the punitive tariffs threatened post-Liberation Day were actually implemented. Perhaps the US needed time to adjust. Since then, the mood music has been notably more positive, and it’s still very possible, maybe even likely, that both sides are simply trying to strengthen their near-term negotiating positions. However, these tensions will probably be a recurring theme in the years ahead as both sides compete on the global stage for dominance.

China currently holds considerable leverage in the rare earths market and seems keen to use it to secure a better deal—particularly in the chip sector, where the US has imposed export controls. So, this battle is shaping up as rare earths versus AI chips.

Interestingly this morning’s data show that China is diversifying their exports. While exports to the US decreased by -27.0% year-on-year in September, marking the sixth consecutive month of double-digit declines, growth in its global exports reached a six-month high of +8.3% (compared to +6.6% expected), significantly surpassing the +4.4% year-on-year increase recorded in August. Imports rose by +7.4% in September, exceeding the forecast of +1.8%, resulting in a surplus of $90.5 billion.

It’s worth remembering that Trump and Xi were expected to meet on the sidelines of the APEC 2025 summit in South Korea on October 31st–November 1st. Also note that the suspension of higher US tariffs on Chinese goods expires on November 10th. There’s still plenty of time for negotiations, and I suspect the market will begin to price in a reasonable probability of a deal once the initial shock fades. For what its worth, Polymarket has the probabilities of the two Presidents meeting by October 31st at 62% this morning, down from a peak of 88% last week but up from around 35% at the lows on Friday night. So there is a belief emerging that this is mostly negotiating tactics on both sides. Trump posted on social media yesterday “Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I. The U.S.A wants to help China, not hurt it!!!”. Meanwhile JD Vance also opened the door to negotiations yesterday. We will see.  

Onto France, where the motto seems to be “if at first you don’t succeed, try, try again.” Whether this time will be any different is a moot point, but with Lecornu reappointed as PM late last week, they will be having another go at passing a budget and forming a government early this week. Polymarket currently shows a 30% probability that fresh elections will be called before the end of October, and a 63% chance by year-end. There’s also a 20% chance of elections being announced by this Friday.  

In terms of key events this week, the US CPI won’t happen as expected on Wednesday, but we now know it will be released on the 24th October. The special treatment during a shutdown is due to the fact that September’s CPI is a crucial input into the government’s calculation of the “cost of living adjustment” (COLA) that is applied each year to several categories of federal outlays. So it’s likely that this is a one-off data wise. The main highlights elsewhere start today with Columbus Day in the US, with bond markets closed but equity markets open. The Annual World Bank and IMF meetings also start today and run through into Saturday. They’ll be plenty to discuss. Tomorrow sees UK employment numbers, the German ZEW, Fed Chair Powell speaking, and the start of US earnings season (more below). Wednesday sees Chinese inflation, Eurozone Industrial Production, and the Fed Beige book and Thursday sees the US NAHB index. There are lots of Central Bankers speakers which you can see in the day-by-day calendar at the end as usual.

As briefly touched upon above, US banks will kick off the Q3 earnings season tomorrow with notable companies reporting including JPMorgan Chase, Goldman Sachs and Citigroup. Morgan Stanley and Bank of America will follow on Wednesday. In tech, the spotlight will be on semiconductor firms ASML (Wednesday) and TSMC (Thursday). Other earnings highlights this week include Samsung, Johnson & Johnson and Blackrock.

Recapping last week now and all was relatively quiet until the US/China trade tensions flared up late on Friday. The S&P 500 ended the week down -2.43% (-2.71% Friday) with Tech stocks underperforming significantly on Friday, as the NASDAQ was down -3.56% (-2.53% on the week), and the Magnificent 7 down -3.68% (-2.69% on the week). This was despite news that OpenAI had agreed to purchase tens of billions of dollars of chips from AMD, which sent its shares up +30.5% last week (-7.7% Friday). It was the worst week for the NASDAQ since mid-April, and the worst since mid-May for the S&P 500. The VIX index of volatility rose to 21.7pts (+5.2pts Friday, +5.0pts on the week), which was the highest level since late-June.

European indices were closed before the final leg of Friday’s sell-off, so they did out-perform. France led losses though with a weekly decline of -2.05% (-1.54% Friday). Franco-German 10-year spreads closed the week +2.4bp wider (+1.3bps Friday) at 83.4bps. The Stoxx 600 was down -1.10% (-1.25% Friday), the FTSE 100 -0.67% (-0.86% Friday), and the DAX -0.56% (-1.50% Friday).

In fixed income, US treasury yields saw a significant rally on Friday with 2yr yields ending the week -7.4bps lower (-9.1bps Friday) at 3.50%, 10yr yields were down -8.7bps ( -10.6bps Friday) to 4.03%, and 30yr Treasuries were down -9.3bps (-10.3bps Friday) to 4.62%. 10yr bund yields rallied -5.4bps (-5.9bps Friday) on the week and BTPs were down -5.0bps (-4.7bps Friday). 

Credit markets also saw their biggest wobble since Liberation Day. USD IG spreads were 6bps wider on the week (+4bps Friday), while USD HY spreads were +36bps wider on the week (+22bps Friday). That is the largest weekly backup for both markets since the first week of April, when the initial tariffs were announced. This also comes as there have been growing fears of stress in private credit markets and Business Development Companies, whose stock prices fell sharply even prior to Friday’s selloff. EUR credit markets were not immune to this stress as EUR IG spreads were +4bps wider on the week (+3bps Friday) and EUR HY spreads gapped +37bps wider (+15bps Friday).

In commodities, gold continued its climb to break through $4,000/oz last week and finished the week up +3.38% (+1.03% Friday) at $4,018/oz. Brent crude declined -2.79% (-3.82% Friday) to $62.73/bbl, as the first phase of the Israel-Hamas truce began on Friday day, with thousands of Palestinians already moving back north and the Israeli army leaving the enclave.

Africa is vast.

So vast that its full scale can be hard to grasp by looking at most world maps.

The graphic below, via Visual Capitalist’s Pallavi Rao, solves this by combining individual countries inside the continent’s area, showing that Africa’s landmass is on par with the (contiguous) U.S., China, India, and much of Western Europe combined.

Data for this visualization comes from UN Statistics Division and total area (land + inland waters) was used for this comparison.

Africa’s Area in Raw Numbers

At 11.7 million mi² (30.4 million km²), Africa is the world’s second-largest continent after Asia.

Put another way, it easily contains the contiguous U.S. (3.1M mi² / 8.1M km²) and China (3.7M mi² / 9.6M km² ) with room to spare.

Add India’s 1.3M mi² (3.3M km²) and we’re still not close to filling the continent’s footprint.

In fact, it takes a total of 30 countries together—shown in the graphic above —to equal Africa’s total area, underscoring how massive the continent is in absolute terms.

Of course, country selection can change these numbers. If prioritizing Central and South American countries instead (like Mexico and Argentina,) the comparison could reduce to 18 entities.

Including Alaska and Hawaii would increase America’s footprint by 700,000 mi² (1.8M km²).

Why Your Wall Map Gets Africa Wrong

Many of us grew up looking at wall maps that use the Mercator projection.

This 16th-century design keeps straight lines for navigation but dramatically enlarges regions near the poles and compresses those near the equator.

Africa, which straddles the equator, is one of the biggest victims of this distortion.

That discrepancy fuels common misconceptions about just how expansive Africa really is.

African Union Calls For Equal Projections Map

The African Union has asked international organizations to stop using the Mercator projection.

They say this size misrepresentation undermines the perceived global influence and importance of Africa and perpetuates stereotypes.

For example, the frequent use of the Mercator map in educational settings and media can lead many to unconsciously imagine Europe and North America as disproportionately significant.

Meanwhile Africa appears less substantial and “marginal.”

The map above also drives home another point. When discussing global development, trade, or climate impacts, treating Africa as a single bloc overlooks the continent’s enormous spatial and cultural complexity.

If you enjoyed today’s post, check out Germany’s Economy Compared to 22 European Countries on Voronoi, the new app from Visual Capitalist.

Authored by T.J. Muscaro via The Epoch Times (emphasis ours),

The decision to mark the walls of the UK’s historic Canterbury Cathedral with graffiti faced staunch international criticism on Oct. 10, as the Church of England’s attempt to appeal to marginalized communities has been criticized as ugly and inappropriate.

Titled “Hear Us,” the temporary art installation is set to open on Oct. 17 and remain open through January 2026.

Visitors will find graffiti spread across the walls and pillars of the 1,400-year-old cathedral as they would on the sides of city buildings.

The cathedral described the exhibit on its website as “the culmination of poet Alex Vellis and curator Jacquiline Creswell’s collaboration with marginalised communities and a team of skilled artists to create vibrant handwritten literature responding to the question ‘What would you ask God?’”

Questions chosen for the walls include “Are you there?” “Why did you create hate when love is by far more powerful?” and “Do you ever regret your creation?”

The cathedral acknowledged that some visitors have disapproved of the exhibit, noting that one deemed it “sacrilegious.” Yet it stood by the exhibit, with Dean of Canterbury David Monteith, chief resident cleric of Canterbury Cathedral, saying that the art “builds bridges between cultures.”

The criticism has gone international, attracting the ire of leaders regardless of religious affiliation.

U.S. Vice President JD Vance, a practicing Catholic, spoke out against it.

“It is weird to me that these people don’t see the irony of honoring ‘marginalized communities’ by making a beautiful historical building really ugly,” he wrote on X on Oct. 10.

Tesla CEO Elon Musk, who has described himself as a cultural Christian, replied to Vance’s post by simply saying, “Absolutely.”

Rev. Gavin Ashenden, a recent Catholic convert who once served as a chaplain to Queen Elizabeth II, also rebuked the exhibit.

“The way you ‘build bridges between cultures’ is by vandalizing superior accomplishments, then flattering the vandals by calling their work ‘raw,’ ‘disruptive,’ ‘unfiltered and not sanitized,’” he wrote on X.

Disciples of Christ, a self-described UK Christian protest group, also spoke out.

“This is sacrilegious,” the group posted on X. “Canterbury Cathedral has vandalised itself in the name of art. The Church of England needs reform. This disrespectful graffiti must be removed immediately.”

The exhibition is scheduled to close just before the official ceremony that will recognize Sarah Mullally as the 106th—and first female—archbishop of Canterbury.

Several voices on social media connected Mullally’s appointment and the graffiti installation as two signs of the same departure from the centuries-old traditions and beliefs of the church. Critics have called out Mullally’s liberal positions on LGBT issues, abortion, and immigration matters. They also pointed out that Monteith is an openly gay man and that Alex Vellis self-describes as nonbinary.

Mullally’s appointment alone led the Anglican Church of Nigeria to end its communion with the Church of England.

Catholic priest Rev. Dwight Longenecker, a former Anglican, said in a statement: “With the appointment of the feminist, ‘pro-choice’ Sarah Mullally as Archbishop of Canterbury and David Monteith, the partnered gay Dean of Canterbury … the character of the Church of England of the twenty-first century is now formal and explicit.”

Rev. Ben Johnson, an Orthodox priest in the UK, contrasted the crude graffiti with reverent iconography.

“Canterbury Cathedral, founded by a 6th-century saint & now occupied by Sarah Mullally, covered its walls in graffiti for a Woke art project,” he said on X.

“The Orthodox Church’s proper iconography—of the sanctuary or the priesthood—has never been more important.”