Macro

• A review of recent events/data impacting our investment themes and outlook
• Uranium takes centre stage, while precious metals remain in a corrective phase
• Xi and Trump finally have their sit-down – important details behind the headlines

• Central bankers broadly delivered on expectations this week, while cautioning that changes will likely be less than markets assume. The BOJ and ECB were also cautious.
• Flash EA inflation slowed, as expected, but services and core stoked hawkish pressure, while money and credit data in the EA and UK show accommodation of inflation.
• Next week’s BoE decision is no longer priced as a forgone conclusion, but the case to cut is weak. Like its peers, the BoE should cautiously damp dovish expectations.

• The much hyped meeting between the presidents of the world’s two largest economies fell short of global expectations.  Key issues were only delayed, not resolved.
• China has been steadfast in the face of U.S. hardball tactics, resulting in the U.S. reversal of announced measures, like the expansion of the restricted entity list. 
• The effective tariff rate on Chinese exports to the U.S. will be approximately 30%, which  is 20% higher than when President Trump took office.

• Export volumes fall, but revenues hold firm on higher prices  
• Domestic latex consumption surges 89%, reshaping local demand base  
• Chinese investments deepen industrial linkages and energy synergy

• Henry Hub prices are rising ahead of a colder U.S. winter, but stronger domestic production and expanding LNG exports could temper the pace of seasonal gains.
• Global LNG capacity is set to soar by 60% by 2030, raising the risk of a supply glut that could depress international gas prices and challenge U.S. competitiveness.
• While global LNG oversupply may pressure prices abroad, surging AI-driven electricity demand and slower renewable deployment could lift domestic gas consumption and keep prices resilient.

• Bank of Japan (BoJ): BoJ kept rates unchanged at 0.5%, despite 3% inflation — a clear policy mismatch.
• Federal Reserve (US): The Fed cut rates despite inflation running above target (≈3.6% annualized).
• China: Industrial profits up 21.6% YoY in September, marking a two-month streak (August: +20.4%).

• Crude oil futures were drifting Thursday after benchmarks were given a midweek uplift from inventory data, although focus was pivoting towards the US-China trade talks and upcoming OPEC+ meeting.
• Front-month Dec25 ICE Brent futures were trading at $64.92/b (2014 BST) versus Wednesday’s settle of $64.92/b, while Dec25 NYMEX WTI was at $60.46/b against a previous close of $60.48/b.
• Investors were eyeing the outcome of talks between US President Donald Trump and Chinese leader Xi Jinping, which were expected to at least reduce tensions in the on-again-off-again trade war.

• AI / Analysis: China’s AI Companions Struggle to Turn Intimacy Into Industry
• China-U.S. /: U.S., China Reach Broad Truce to Ease Trade War
• Trade /: China Expands Pilot Program for Easier Cross-Border Trade Settlements

• Downside activity risks have reduced, while the inflation outlook holds steady, keeping the ECB in its “good place” despite an implied shift up in the balance of risks.
• Upside risks while inflation is seen settling at 2% would imply a hawkish bias, which the ECB isn’t ready to convey. But the skew may have swung within insignificant margins.
• We still expect no more ECB rate cuts this cycle. If underlying inflation fails to slow as hoped, the ECB’s balanced bias could easily break into a hawkish one in 2026.

• Ueda signals near-term tightening: BoJ Governor Ueda indicated that the next rate hike could come soon, as the Bank awaits only “initial indications” from the 2026 spring wage negotiations. 
• Timing points to December or January: Our main scenario for the hike to 0.75% is January 22-23 in 2026, but we attach some possibility, 20-30% to December 18-19 in 2025.
• U.S. risks remain the key wildcard: A sharper-than-expected U.S. slowdown could delay it, but Absent that, BoJ will hike soon, followed by gradual rise to 1.5% by late 2027. 

• The BOJ held rates at 0.5% as expected, with a 7-2 vote showing continued division. A December hike is now priced at 50-55%, down from 68% pre-Takaichi.
• Inflation forecasts are unchanged at 2.7% (FY25), 1.8% (FY26), with sluggish underlying price growth and downside economic risks delaying tightening.
• Wage sustainability and trade policy uncertainty dominate the outlook. 2026 labour talks and corporate profit trends will determine the rate path timing.

• A divided FOMC cut by 25bp as expected, but Powell signalled Dec’25 cut was far from a foregone conclusion; instead the FOMC was strongly committed to returning to 2% inflation. 
• US$88.8bn decline in base money (Mar-Aug’25) has held M2 and inflation in check. The end of QT from Dec’25 will be a form of easing, precluding rate cuts until Jan’26. 
• FOMC voting shows doves isolated, and Powell-led FOMC will stay hawkish until Jan’26, especially amid fogginess on inflation data. The next rate cut is unlikely until Mar’26. 

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• Crude oil futures were higher Wednesday after a steep draw in US oil inventories, but more broadly investors were monitoring sanctions on Russia and the upcoming OPEC+ meeting.
• Front-month Dec25 ICE Brent futures were trading at $64.98/b (2020 BST) versus Tuesday’s settle of $64.40/b, while Dec25 NYMEX WTI was at $60.53/b against a previous close of $60.15/b.
• Markets initially steadied after the American Petroleum Institute reported that US crude stocks retreated by 4 million barrels, while gasoline inventories slumped 6.3 million barrels and distillate tanks drained 4.4 million barrels in the latest reporting cycle.

• Credit and monetary holdings are booming in the UK, enabling consumers to spend their devalued pounds, supporting CPI inflation beyond the target.
• Falling rates have neutered the refinancing shock, facilitating the affordability of loan demand. Rapid ongoing wage growth further reduces the debt burden.
• The ECB also sees bullish monetary trends, but they only took it to a good place. The BoE is not in a good place, with policy accommodating above-target inflation pressures.

• Crude oil futures were rowing back Tuesday, with OPEC+ set to further raise output and uncertainty over sanctions enforcement.
• Front-month Dec25 ICE Brent futures were trading at $64.28/b (2020 BST) versus Monday’s settle of $65.62/b, while Dec25 NYMEX WTI was at $60.01/b against a previous close of $61.31/b.
• But reports that OPEC+ will go ahead with a ninth consecutive production hike were seen limiting further price upside for now.

• China has announced that it will significantly boost the share of domestic consumption in its next five years, while maintaining tech and manufacturing as top priorities.
• The nation’s banks will be instrumental in providing consumption financing to spur a virtual growth driver for the economy.  Easing monetary policies will be in addition to the trade-in programs.
• Consumer in service sectors like e-commerce, travel & tourism, healthcare, elderly care and AI will benefit from increasing consumption.  Local brands stand to gain market share against foreign competitors.

• Autos /In Depth: China’s Growing Trade of Unused ‘Used’ Cars Threatens Automakers’ Global Expansion
• Forex /: China to Roll Out New Policies to Ease Forex Transactions for Trade, Investment
• Personnel /: China Taps Three Coastal Officials for Vice Minister Roles

• Active UK funds gained +11.75% through Q3, lagging the FTSE All Share ETF’s +15.9%—a 4.15% gap, with nearly 75% of managers underperforming.
• Value strategies led returns (+16.6%), while Aggressive Growth funds averaged just +4.5%.
• Key underweights in Rolls-Royce, HSBC, BAE Systems and BATS cost roughly 3% in relative performance.

• The Fed’s 25bp rate cut to 3.75–4.00% was anticipated, with the decision reflecting rising labour market risks amid the data fog.
• Policy outlook hinges on future data. Inflation remains sticky, but the labour market weakening drove today’s pre-emptive move.
• A pause in QT’s asset runoff demonstrates heightened caution. December’s decision is “not on a preset course”.

• The Bank of Canada cut its policy rate by 25bp to 2.25%, matching the consensus, and signals the current rate is about right to sustain 2% inflation.
• Structural damage from tariffs limits further monetary easing. Fiscal policy is expected to carry the economic support burden ahead.
• Economists are divided: some see the cycle complete at 2.25%, others forecast further cuts to 1.75-2.0% if growth disappoints materially.

• Prices fail to breach INR200/kg mark making farmers unhappy  
• GST cut benefit to percolate to the rubber market soon  
• Demand to extend World Bank replanting aid to all Kerala districts

• US sanctions now target all four of Russia’s largest oil companies, affecting 70% of production and exports
• EU also imposes new sanctions on Russia’s energy revenues
• Russia shifts to alternative currencies for oil trade to evade US dollar restrictions, leading to higher transaction costs and reputational risks

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• Active Global funds averaged +15.5% YTD, trailing the SPDR ACWI ETF’s +18.8%, with 73% underperforming the benchmark.
• Value strategies led performance; Aggressive Growth funds lagged sharply, averaging just +10.15%.
• Underweights in US Tech names like NVIDIA and Palantir, plus 2.4% cash holdings, drove relative losses.

• Crude oil futures were moving sideways Monday amid uncertainty around trade talks and enforcement of Russian sanctions.
• Front-month Dec25 ICE Brent futures were trading at 65.67/b (1950 BST) versus Friday’s settle of $65.94/b, while Dec25 NYMEX WTI was at $61.34/b against a previous close of $61.50/b.
• Benchmarks had opened Monday higher before giving up ground that was recovered to leave the market flat from Friday.

• US base oils demand likely to stay muted amid expectations of waning end-user consumption and improving supply in coming weeks.
• US base oils demand typically falls in month of November from October.
• Prospect of slowdown in demand would coincide with rise in supply following expected completion of plant-maintenance in H1 Nov 2025.

• Asia’s Group II base oils cargo prices hold firm versus US export prices so far in Q4 2025.
• Firm prices complicate arbitrage to move surplus supplies to markets like Latin America, suggesting Asia’s supply-demand fundamentals remain balanced to tight.
• Asia’s Group II base oils price-premium to Singapore gasoil price stays at similar levels so far in Q4 2025 to end-Q3, even after recent rebound in crude/gasoil prices.

• US Group II base oils prices hold firm vs VGO prices.
• Firm base oils margins sustain incentive for refiners to maintain high output.
• Supply set to get further boost following expected completion of plant-maintenance in H1 Nov 2025.

• Chips /Cover Story: U.S. and Chinese Chipmakers Tread Different Paths in AI Gold Rush
• China-U.S. /: China, U.S. Reach Basic Consensus in Kuala Lumpur Trade Talks Ahead of Leaders’ Summit
• Hospitals /: China’s Public Hospitals Report Mixed Fortunes as Financial Pressures Mount

• Japan, a country big in ETFs, is discussed in the Trillions podcast with guest Jeremy Schwartz from WisdomTree
• DXJ, the WisdomTree Japan Hedged ETF, had a successful run in 2013 but later underperformed, potentially due to currency manipulation and changes in leadership
• Despite past fluctuations, Japan never left and DXJ has outperformed the S&P 500 since 2012, highlighting the potential for growth and investment opportunities in Japan

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• EM markets trading with strong global beta, lack of US key data due to government shutdown affecting market direction
• EM currencies look okay, EM rates may be less favorable, EM credit suffering from tight spreads
• Key takeaways from IMF conference in Washington include focus on impact of AI-related investments on global growth and employment, overall mood on growth is flat with risks but no panic or euphoria

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• Our strategy approach is to filter various information sources and apply our clear investment process on top of it.
• There are two reasons for us to enter a trade: …our quant system tells us to do so …or we make a discretionary manager decision based on market fundamentals that the quant system will only grasp with a time-lag
• While not only moving sideways, the oil complex is currently drastically underperforming other parts of the commodity complex.

• Donald Trump and Xi Jinping’s 30 October summit will likely stave off, for now, any further escalation of trade tensions between China and the US.
• However, thanks to its monopoly on strategic minerals and Xi Jinping’s willingness to play a long game — even beyond ‘mere’ trade — China holds the stronger hand.
• Irrespective of whatever Mr Trump concedes this week to secure a ‘headline grabber’, Xi Jinping will therefore come back for more, not least on Taiwan.

• FX and gold oil ratio have decoupled this year, leading to low volatility and focus on US data, exogenous shocks, and geopolitics in FX trading.
• Japanese Prime Minister Takaichi delivered a speech on economic policy, focusing on fiscal measures and debt reduction, without mentioning monetary or FX policy.
• Despite interventionist stance of Takaichi and Finance Minister Katayama, it is unlikely they will strongly intervene in BOJ policy, with expectations of a rate hike next week due to economic and market developments.

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• Funding pressures have been gradually increasing due to various factors such as a new easing cycle by the Fed, rebuilding of tga, and QT draining liquidity from the system.
• Money funds began extending duration and shifting balances, leading to evidence of funding pressures in September which intensified in October.
• Funding markets are becoming more sensitive to incremental collateral adds and repo markets are operating with more frictions, impacting the effectiveness of SRF operations in redistributing reserves and controlling repo rates.

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• Verizon Business offers a new My biz plan with customizable mobile options starting at $25 per line
• Odd Thoughts podcast discusses big market stories, including the fall of the dollar, rise in gold prices, and enthusiasm for AI in the stock market
• Hyun Sung Shin of the Bank for International Settlements discusses the unusual market trends of the year and their implications.

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• Crude prices were mixed Friday, but consolidated the sharp rally driven by new US sanctions on Russia’s top oil producers, as both benchmarks headed for their biggest weekly gain since June.
• Front-month December ICE Brent was up to $66.01/b at 2011 BST, while December NYMEX WTI dipped slightly to $61.58/b , after jumping more than 5% on Thursday.
• The pullback followed Washington’s sanctions on Rosneft and Lukoil, which together account for roughly half of Russia’s crude output and exports.

• Turbulent macro backdrop with concerns over US-China trade relations and credit quality affecting global economy and metals demand
• Mixed sentiments on copper market balances for next year, with varying views on supply from DRC and Chinese demand
• Aluminium narrative looking positive with China’s X supply growth and debate on market balances centered around capacity ramp up from Indonesia

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• Asia’s valuation rerating seems over. Future market performance would likely be driven by earnings growth. On current consensus forecasts, Taiwan, Korea, China and India lead the future earnings growth leaderboard.
• Growth adjusted relative valuations are similar to early 2025, but markets are more closely aligned along the trendline. India is relatively less expensive and Korea relatively less cheap than previously.
• Analysts are turning more bullish on 2026 than on 2025. For most large markets, especially Korea and Taiwan, 2026 consensus EPS estimates have moved up while 2025 estimates have declined.

• We have been bull bulls, but point and figure charts of gold and gold miners show that they are either very near or have outrun their measured price objectives.
• Tactically, the contrarian trade would be to sell gold and buy bonds.
• However, a cycle analysis leads us to conclude that the market is undergoing a shift to a hard asset price leadership cycle.

• The U.S. stock market’s technical conditions are turning more constructive.
• Market internals such as breadth and risk appetite indicators have stopped deteriorating and they are starting to heal
• Risks remain, and we would like to see the resolution of key event risks before sounding the all-clear signal.

• The meeting next week between Presidents Trump and Xi will mark the beginning of  a resolution to trade and other issues between the two countries.
• The most difficult tech and rare earth elements issues will probably not be resolved.  Increased tariff rates will be delayed again.
• TikTok and Taiwan are key issues and will set the tone for the U.S.-China relationship during President Trump’s remaining term.  

• Sentiment stabilised this week as credit issues are realised to be more of a long-term problem than an imminent issue. Indonesia and Korea hawkishly held their policy rates.
• Inflation undershot final expectations in the UK and US, yet constitutes less excess rather than outright weakness, and merely aligns with slightly earlier forecasts.
• Next week’s release calendar has some heavy hitters, but pulling their punches. The Fed cut and ECB hold are widely expected, as is a marginal slowing in EA inflation.

• Crude oil futures were sharply higher Thursday after the US sanctioned Russian oil giants Rosneft and Lukoil, in a renewed bid to starve Moscow of revenues to fund its war with Ukraine.
• Front-month Dec25 ICE Brent futures were trading at $65.89/b (2053 BST) versus Wednesday’s settle of $62.59/b, while Dec25 NYMEX WTI was at $61.67/b against a previous close of $58.50/b.
• The announcement by the US Treasury was seen as the most decisive action yet during President Trump’s administration, with Lukoil and Rosneft directly controlling more than half of Moscow’s exports.

• China: Growth Slows, Stimulus Likely Ahead: Q3 GDP rose 4.8% YoY, below earlier quarters and forecasts (previously expected 5.5% FY growth, now trimmed to 5.1%).
• Japan: Policy Stagnation and Structural Decline: New LDP leader and PM, Mrs. Takaichi, signals more of the same “Abenomics” playbook — fiscal stimulus and ultra-low rates.
• Regional and Market Sentiment: The Bangkok roundtable consensus was broadly cautious — China’s sub-5% growth outlook and Southeast Asia’s softening momentum weighed on sentiment.

• CPI inflation edged up to 3%YoY in Sep’25, after a 0.3%MoM increase. Markets cheered, as these were lower than expectations, but MoM-annualized inflation is running well above the 2% target. 
• The Powell Fed’s politically-driven 75bp of rate cuts in Sep-Nov’24 are now obliging it to effectively move to a 3%YoY inflation target; a 25bp rate cut is inevitable next week. 
• Base money contracted US$88.8bn in Mar-Aug’25, so M2 growth was modest (4.8%YoY). But the rise in crude prices (post-Russian sanctions) will raise inflation past 3%, precluding any Dec’25 rate cut. 

• A review of recent events/data impacting our investment themes and outlook
• A correction has finally started in the precious metals space
• What to do now in the sector for both the short and long term

• In the first half of October, inflation stood at 0.28% bw, reflecting lower pressures on goods and agricultural products.
• As a result, annual headline inflation fell to 3.63%, creating room for Banco de México to continue its easing cycle.
• Typically, inflation for this fortnight averages around 0.40% bw. 

• July to August export volume increases but returns drop  
• Chinese exports pick up as it strikes deal with the US  
• Malaysia, Japan too cash in on lowering of US tariffs  

• The net short selling balance in KOSPI reached 12.6 trillion won as of 20 October. This is the largest amount ever.
• The top 5 companies in KOSPI with highest short selling balance/market cap ratio include Kakaopay, L&F, Hanmi Semiconductor, Cosmax, and LG H&H. 
• Net short position In KOSDAQ as a percentage of total KOSDAQ market cap more than doubled from 0.5% as of 31 March to 1.1% as of 21 October 2025.

• Crude oil futures were trending higher Wednesday after markets finally found some support, coming after the heavy losses so far in October that had seen benchmarks challenge post-Covid lows.
• Front-month Dec25 ICE Brent futures were trading at $63.12/b (2034 BST) versus Tuesday’s settle of $61.32/b, while Dec25 NYMEX WTI was at $59.21/b against a previous close of $57.24/b.
• Prices rebounded on reports that talks between US President Donald Trump and Russian President Vladimir Putin had been put on hold, increasing the threat of sanctions on Russia and broader supply disruptions from attacks on infrastructure.

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