Forex investors are focused on comments from President Donald Trump, who confirmed the possibility of a personal meeting with China’s President Xi Jinping at the APEC summit in Seoul on October 31, noting that the sides need to conclude a trade deal. This news lowers the likelihood that the White House will impose additional 100% tariffs on all Chinese imports and reduces the risk of a global economic downturn. Meanwhile, White House economic adviser Kevin Hassett expects the government shutdown to end this week; otherwise, the Republican administration may take “tougher measures” in pursuit of consensus with Democrats.

Eurozone

The euro is weakening against the US dollar and the pound, while showing mixed dynamics versus the yen.

September wholesale inflation data in Germany were published today: the Producer Price Index rose from –0.5% to –0.1% m/m versus a 0.1% forecast, and from –2.2% to –1.7% y/y, remaining in negative territory. Overall, German producers continue to cut prices amid weaker demand due to US tariffs, which raises the likelihood that eurozone inflation will remain below the European Central Bank’s (ECB) 2.0% target. This is viewed as an unfavorable scenario, and to prevent it, ECB officials may revert to a more “dovish” monetary stance.

United Kingdom

The pound is weakening against the US dollar, strengthening versus the euro, and shows mixed dynamics against the yen.

Investors are assessing October housing-market data from research firm Rightmove Group Ltd.: asking prices eased from 0.4% to 0.3% m/m and improved from –0.1% to 0.1% y/y. The agency noted that despite the sector’s overall resilience, there is no positive impulse this year that would deliver the traditional autumn upswing. Given speculation that the new budget, to be presented on November 26, could raise the cost of buying or owning property in the upper price segment, many consumers prefer to wait.

Japan

The yen shows mixed dynamics against the US dollar, the pound, and the euro.

Parliament will meet tomorrow to confirm the new prime minister: the probability that Liberal Democratic Party (LDP) leader Sanae Takaichi will take office has increased significantly, as the party has reached a coalition agreement with the Japan Innovation Party. Investors fear she will pressure the Bank of Japan to delay a return to “hawkish” rhetoric, while broad fiscal stimulus will be used to support the economy. In addition, a board member of the central bank stated that interest rates need to be raised, as inflation has nearly reached the 2.0% target and may keep rising. Most experts expect at least one tightening of monetary policy by year-end.

Australia

On forex, the Australian dollar is weakening against the yen, strengthening versus the pound, and shows mixed dynamics against the euro and the US dollar.

Some support comes from China’s Q3 GDP: the figure adjusted from 1.0% to 1.1% q/q versus a 0.8% forecast, and from 5.2% to 4.8% y/y versus 4.7% expected. Stability in China’s economy, Australia’s key trading partner, implies preserved or expanding trade volumes.

Oil

Oil prices are correcting lower amid concerns of market oversupply as demand slows due to the escalation of US–China trade tensions. Last week, World Trade Organization (WTO) officials urged countries to seek compromise, warning that, if the situation worsens, global economic output could shrink by 7.0% in the long term.

We also note that on Sunday President Donald Trump reiterated the White House would maintain tariffs on Indian goods unless the country stops purchasing Russian crude; however, for now the Indian government does not intend to give it up.