• US and China reached a framework for Trump-Xi talks this week. US tariff increase on China averted, China was said to have agreed to delay a new rare earth exports licensing regime for a year.
• The US is to immediately raise tariffs on Canada by another 10%.
• US President Trump said he won’t meet with Russian President Putin until he thinks they have a peace plan.
• European bourses firmer but off best levels; US equity futures soar as traders digest the latest US-China trade commentary.
• High-beta FX propped up by US-Sino optimism, CAD overlooks US tariffs.
• USTs/Bunds knocked by the risk tone and reports of EU issuance, OATs outperform as Moody’s maintained France’s rating at Aa3, but revised the outlook to negative from stable.
• Positive US-China optimism weigh on XAU and lifts Copper near ATHs; Crude was initially boosted by the risk-tone but has since slipped into the red.
• Looking ahead, highlights include US Dallas Fed (Oct), Suspended Releases: US Durable Goods (Sep), Atlanta Fed GDPNow, Supply from US, Earnings including NXP Semiconductor.
• UK clocks moved back an hour during the weekend and reverted to GMT, which means there will just be a 4-hour time difference between London and New York for the week until US clocks change on Sunday 2nd November.

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TARIFFS/TRADE

CHINA

• US President Trump said he expects a very fair meeting with Chinese President Xi and he is optimistic about a China deal, while he said he will do some good business with Chinese President Xi and that he has a lot to talk about with Xi.
• US President Trump said they might sign a final deal on TikTok on Thursday; received provision approval from Chinese President Xi.
• US Treasury Secretary Bessent said China is ready to make a trade deal and that they have a framework for Trump-Xi talks, while he added that US President Trump and Chinese President Xi will make the final decisions. Bessent separately commented that the tariffs increase on China was averted and that China agreed to delay a new rare earths export licensing regime for a year. Bessent also stated that he expects the Chinese to be making substantial purchases of US soybeans again soon and that US soybean farmers will feel good about coming soybean seasons for several years when the Trump-Xi trade deal is announced, as well as noted that the details of the TikTok deal are ironed out with Trump and Xi able to consummate that transaction in South Korea on Thursday.
• China’s top trade negotiator Li said they reached a consensus with the US and talked about tariffs and export controls, while he added they will enhance communication with the US and talked about 301 port fees, trade expansion and fentanyl.
• Chinese Vice Premier He said they should jointly implement the consensus reached with the US, while he added that China and the US should find ways to properly address each other’s concerns through equal dialogue and consultation.
• USTR said on Friday that they initiated a trade investigation of China's implementation of the Phase One agreement with the US. It was also reported that China’s embassy to the US said regarding the USTR investigation that China opposes false accusations related to investigation measures and that US actions have done serious damage to US-China ties as well as economic and trade relations, while it urged the US to promptly correct wrong practices.
• Chinese Premier Li met with European Council President Costa and said China is willing to work with the EU to keep bilateral relations on the right track, according to Xinhua. It was separately reported that Costa said he shared a strong concern with Li about expanding export controls on critical raw materials, and urged Li to restore as soon as possible fluid, reliable and predictable supply chains. Furthermore, he expressed expectations that China helps to put an end to Russia’s war against Ukraine and stressed the need to make concrete progress as a follow-up to the EU-China summit.
• US President Trump says they will come away with a deal with China.

CANADA

• US President Trump announced the US is to immediately raise tariffs on Canada by another 10% because of the fraudulent ad misrepresenting Ronald Reagan’s view on tariffs. Trump said Canada has been ripping the US off for a long time, and they're not going to do it anymore.
• Canadian PM Carney says that Canada is ready to sit down with the US, hasn't had contact with US President Trump since Thursday.

**OTHER

• US and Vietnam announced a framework for an agreement on reciprocal, fair and balanced trade, while the deal will provide both countries’ exporters unprecedented access to each other’s markets. The joint statement noted that the US will maintain a 20% tariff on Vietnam but will identify products and potential tariff adjustments for aligned partners to receive a 0% reciprocal tariff rate.
• US signed a trade deal with Thailand, Cambodia and Malaysia in which the US would maintain a tariff rate of 19% on exports from all three countries under the deals, while the deal with Malaysia enhances US access to rare earths.
• US and Malaysia joint statement noted that Malaysia has committed to provide significant preferential market access for US industrial goods exports and committed to address non-tariff barriers that affect bilateral trade in priority industrial areas.
• US and Thailand joint statement noted that the US will maintain a 19% tariff on Thailand, but will identify products and potential tariff adjustments for aligned partners to receive a 0% reciprocal tariff rate.
• US and Cambodia joint statement noted that Cambodia commits to eliminating tariffs on 100% of US industrial goods and US foods and agricultural products exported to Cambodia.
• US President Trump said that they are going to make a deal with Brazil, while he also commented that they may reduce Brazil's tariffs and are pretty close on a South Korean deal.
• South Korean President Lee said South Korea and the US trade talks are still deadlocked over USD 350bln investment in the US, while a South Korean presidential advisor said they find it difficult to reach a tariff agreement between South Korean President Lee and US President Trump during the APEC period.
• Brazil's President Lula said decisions against Brazil by the US are wrong, but noted he had a very good impression at the meeting with US President Trump, while he added that he respects Trump and Trump respects him, and he handed Trump a written agenda. Furthermore, Lula said they will reach a deal with the US and that Trump was the most enthusiastic in the meeting, while he is convinced in a few days they will reach a solution and is sure everything is going to work out well.
• Brazil’s Foreign Minister Vieira said US President Trump and Brazilian President Lula had a happy conversation and the meeting was positive, while he stated that Trump gave the instruction to start a bilateral negotiation process. Furthermore, he said they will have conversations targeting a tariffs suspension, and the first step of negotiations was with USTR Greer, Commerce Secretary Lutnick and Secretary of State Rubio on Sunday.
• UK Chancellor Reeves is to hold Gulf trade talks in a push for pro-growth policies with Reeves to conduct trade talks in Riyadh on Monday, according to FT.
• Japanese PM Takaichi says she is looking forward to seeing US President Trump on Tuesday, and having a positive discussion on strengthening their alliance.

EUROPEAN TRADE

EQUITIES

• European bourses (STOXX 600 U/C) opened firmer across the board, with sentiment boosted by the constructive US-China trade talks over the weekend, whereby the two countries reached a framework for Trump-Xi talks. However, some indices did pare off best levels as the morning progressed, albeit still remain mostly firmer in Europe.
• European sectors opened with a strong positive bias, but are now mixed. Basic Resources leads, followed closely by Tech; the pair boosted by the aforementioned trade optimism. To the bottom of the pile resides Chemicals and Consumer Products.
• US equity futures (ES +0.9% NQ +1.3% RTY +1.0%) are stronger across the board, as traders cheer the latest US-China trade talks and now await the Trump-Xi meeting this Thursday; markets now expect a potential formal announcement on soybean purchases, and an extension to the existing tariff pause.
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