China’s Trade Truce And Five-Year Plan Help Coal Price Recover

China–U.S. Trade War

Commodity

Summary:

China's thermal coal price has climbed to its highest level this year, as a combination of short and long-term factors lift confidence in the outlook for demand.

The usual impact of utilities restocking for winter has been amplified by protracted mine inspections to ensure safety and check excessive output. Buyers are also taking heart from the trade truce agreed with the US and its positive bearing on the economy, as well as Beijing's softer stance on capping consumption of the dirtiest fossil fuel.

The benchmark price at Qinhuangdou has risen to 788 yuan ($111) a ton, according to the China Coal Transportation and Distribution Association, an increase of more than 10% over the last month or so. Similar dynamics are affecting steelmaking coal, with futures in Dalian close to their highs for the year.

The government's plan for the upcoming five years has blurred the language setting out when coal use needs to decline, suggesting the peak will be more drawn out than previously thought. The China National Coal Association said last week it expects demand to grow steadily next year before plateauing by 2030.

Still, thermal prices are about 7% below where they were last year, testament to the massive pressure caused by accelerated output growth after the shortages of earlier this decade. Renewables, meanwhile, are carving out an ever-larger share of power generation. That means a surplus of coal is likely to persist next year.

Bloomberg Intelligence thinks the benchmark could sink to an average of 660 yuan a ton in 2026, with upside capped at 850 yuan, according to a note this week.

In the meantime, the weather, as ever, remains a wild card, although the latest official forecast could take some of the sting out of winter heating demand. The National Climate Center expects temperatures in most regions close to or above normal over December to February. Less rain than usual is expected, though, which could diminish competition for coal from hydropower.

Cambodia is set to become one of the first countries to store gold with China, according to people familiar with the matter, marking early progress in Beijing's push to develop as a global bullion hub.

China said its capacity for new energy storage exceeded 100 gigawatts by the end of September, further cementing the country's leading position in the sector.

China announced it will remove retaliatory tariffs on some US farm products and lift export controls on an array of American firms, after Washington halved its fentanyl-related levies on Chinese goods.

Source: Bloomberg Europe

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Economic

Market Open: Cautious Sentiment Dominates Amid Earnings Rush

European markets opened in negative territory on Thursday as investors balanced strong corporate earnings against broader economic uncertainty. The pan-European Stoxx 600 dipped 0.3% in early trading, reflecting subdued sentiment across most sectors. France’s CAC 40 led losses with a 0.7% decline, followed by more modest drops in Germany’s DAX and the UK’s FTSE 100. Only Spain’s IBEX 35 bucked the trend with a 0.19% gain, offering a rare spot of resilience in a generally downbeat opening.

This regional pattern suggests a correlation between investor hesitancy and localized earnings performance, with markets responding more to national-level corporate dynamics than to broad macroeconomic catalysts at the session’s start.

Corporate Results in Focus: AstraZeneca, DHL, and Commerzbank Diverge

The earnings spotlight was squarely on several major European firms reporting third-quarter results. AstraZeneca exceeded expectations, posting a 10% year-on-year revenue increase (on a constant currency basis) and forecasting high single-digit growth for the full year. The pharmaceutical giant maintained its guidance despite macroeconomic pressures in China and Latin America. CEO Pascal Soriot emphasized the company’s strategic caution, signaling a preference to underpromise and potentially overdeliver.

This reflects a causal relationship between regional uncertainties and corporate outlook: AstraZeneca’s guidance restraint stems directly from anticipated market challenges, even as operational results remain strong.

DHL also beat estimates, reporting robust performance. However, CEO Tobias Meyer noted a significant drop in U.S. trading volumes, hinting at possible weakness in global logistics demand. Still, DHL shares surged by 5.7% in early trade, indicating investor confidence in the company’s resilience and long-term strategy despite short-term pressures.

In contrast, Commerzbank disappointed markets with a 7.9% year-on-year drop in net profit, attributed to a tax-related accounting effect. Although the German bank raised its full-year guidance for net interest income to €8.2 billion (from €8 billion), shares fell by 1.7%. The market response highlights how short-term profit setbacks even those not operational in nature can outweigh optimistic forward guidance in investor valuation models.

Macroeconomic Calendar: Rate Decisions and Budget Expectations

Market participants also kept an eye on upcoming central bank decisions. The Bank of England was widely expected to maintain its 4% benchmark rate ahead of the UK’s Autumn Budget on November 26. Norway’s central bank was also due to announce its policy stance. Investors appear to be cautious as policymakers balance inflation management with signs of economic slowdown and tightening fiscal conditions.

The timing of these decisions in relation to fiscal planning illustrates a causal link: monetary authorities are delaying action until they can assess the fiscal path outlined in budget announcements, particularly regarding taxation and public spending.

Global Influences: AI Rally in Asia and US Policy Uncertainty

Overnight, Asia-Pacific equities gained on the back of a positive earnings surprise from AMD, which lifted sentiment across artificial intelligence-linked stocks. Meanwhile, U.S. futures were marginally lower following cautious optimism that the Supreme Court might rule against former President Trump’s expansive trade tariffs.

This legal development could materially shift investor expectations. If the Court moves to roll back key tariffs, the impact on global trade conditions particularly for European exporters could be profound. The market’s muted yet positive reaction reflects a correlation between reduced policy uncertainty and equity market upside.

Despite strong earnings from select firms, the broader European equity landscape opened with losses as caution prevails ahead of critical monetary and fiscal policy signals. Earnings outperformance from AstraZeneca and DHL offered isolated optimism, while Commerzbank's setback underlined vulnerability to non-operational shocks. As central banks and political actors prepare to shape the next phase of economic policy, investor positioning remains defensive, awaiting clearer signals.

Source: CNBC

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Michelle

Forex

Commodity

Economic

Gold rose above the key $4,000 per ounce level on Thursday as a retreat in the dollar and a prolonged U.S. government shutdown raised worries over the economic outlook.

Spot goldwas up 0.7% to $4,011.79 per ounce by 0914 GMT. U.S. gold futuresfor December delivery gained 0.7% to $4,021.20 per ounce.

"The Supreme Court skepticism on the tariffs and the slightly weaker dollar are likely supporting gold," said UBS analyst Giovanni Staunovo.

"While near-term prices are likely to continue consolidating, we expect further Federal Reserve rate cuts to lift gold to $4,200/oz by the end of the year."

The dollarfell 0.2% after hitting a four-month high in the previous session, making gold less expensive for other currency holders.

U.S. Supreme Court justices raised doubts on Wednesday over the legality of President Donald Trump's sweeping tariffs in a case with implications for the global economy.

Meanwhile, U.S. private employers added 42,000 jobs in October, exceeding Reuters' forecast of a 28,000 gain, the ADP report showed on Wednesday. The stronger labor market could temper interest rate cut hopes.

A congressional impasse has resulted in what is now the longest-ever U.S. government shutdown, forcing investors and the Federal Reserve to rely on private sector indicators.

The Fed cut interest rates last week but Chair Jerome Powell suggested it might be the last reduction for 2025.

Market participants now see a 63% chance of a Fed rate cut in December, down from more than 90% last week.

Non-yielding gold tends to do well in low-interest-rate environments.

European stocks slipped, pressured by losses in France's Legrand as it missed sales growth expectations, adding to recent worries around elevated valuations in tech-related companies.

Elsewhere, spot silverrose 1.4% to $48.74 per ounce, platinumwas up 0.4% at $1,567.01, and palladiumgained 1.1% to $1,434.22.

Source: TradingView

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Economic

Monetary Policy at a Crossroads Ahead of Fiscal Announcements

The Bank of England (BOE) is preparing to announce its final interest rate decision before the UK government delivers its Autumn Budget on November 26. Economists largely forecast that the BOE’s nine-member Monetary Policy Committee (MPC) will vote to keep the benchmark Bank Rate at 4%, though expectations for a near-term cut have grown amid signs of economic cooling. This week’s decision is considered one of the most unpredictable in recent memory, as BOE policymakers attempt to navigate slowing growth, persistent inflation, and looming fiscal adjustments.

While most analysts believe the BOE will maintain its current rate, some notable institutions including Barclays, Nomura, and Unicredit suggest a surprise cut to 3.75% could occur. Barclays Private Bank strategist Julien Lafargue described the decision as “finely balanced,” noting the existing economic data makes a compelling but not definitive case for easing policy.

Consensus indicates that if the central bank opts to pause this week, a rate cut could follow as early as December, or more likely February. UBS economist Dean Turner reinforced this view, predicting a rate reduction will be inevitable given the trifecta of tight policy, falling inflation, and sluggish growth. However, pinpointing the precise timing remains the central challenge.

Economic Indicators Signal Softening Pressures

Key indicators appear to support the argument for easing monetary policy. Headline inflation held steady at 3.8% in September the third consecutive month without movement and labor market data shows signs of weakening. A potential rise in the unemployment rate to 4.9% could be significant, particularly if accompanied by subdued wage growth and softer core service price inflation.

This indicates a causal relationship: declining inflation and labor market slack directly reduce pressure on household spending and price-setting behavior, thereby increasing the rationale for a policy shift. However, the BOE remains wary of moving too soon and prefers clearer evidence of sustained disinflation before committing to rate cuts.

Interplay Between Monetary and Fiscal Policy: The Autumn Budget Factor

The proximity of the Autumn Budget adds further complexity to the BOE’s decision-making. Chancellor Rachel Reeves is expected to announce significant fiscal tightening measures to address a budget shortfall estimated between £20 billion and £50 billion. Among the options under consideration is a rise in income taxes, which would likely dampen consumer demand and, by extension, inflation.

Economists, including Andrew Wishart at Berenberg, anticipate that such fiscal tightening if front-loaded could accelerate the BOE’s rate-cutting cycle. He suggests that if the government enacts meaningful tax increases, the BOE may cut rates by 25 basis points at least twice in 2026, potentially reaching 3.25%. In this case, there is a clear correlation between fiscal policy and inflation dynamics, where contractionary fiscal measures indirectly support looser monetary policy by curbing inflationary pressures.

Looking Ahead: Scenarios and Market Expectations

Markets are now closely watching for cues from the BOE’s policy language. Should the central bank hold rates this week, as widely expected, its accompanying statement may hint at a readiness to act in the near term. Although no new forecasts will be released until after the Budget, the impact analysis of fiscal changes could provide sufficient forward guidance to justify preemptive action.

JP Morgan’s Allan Monks notes that future rate decisions will be data-driven, particularly concerning labor market slack and inflation surprises. The alignment of monetary and fiscal timelines suggests that BOE decisions over the coming months will be shaped not only by macroeconomic conditions but also by political choices on taxation and public spending.

The BOE stands at a delicate juncture. Holding rates steady now offers policymakers the flexibility to assess the Autumn Budget's economic impact. Yet, if inflation and wage pressures continue to ease, the case for cutting rates will become increasingly difficult to ignore. The coordinated influence of fiscal restraint and monetary recalibration could define the UK’s economic trajectory into 2026.

Source: CNBC

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Economic

Energy Partnership Strengthens Amid Geopolitical Challenges

On November 6, 2025, Athens hosted a pivotal high-level meeting between US and European Union energy leaders to discuss how to leverage enhanced regional pipeline networks to support Ukraine’s energy needs. The meeting, organized by the Atlantic Council, was attended by over 80 US officials, including Energy Secretary Chris Wright and Interior Secretary Doug Burgum, alongside EU energy ministers and key figures from major American liquified natural gas (LNG) companies. The central agenda revolved around rerouting energy flows to assist Ukraine while expanding American LNG's role across Europe.

A crucial point of discussion was the Vertical Corridor, a gas route that links Greece to Bulgaria and Romania. This infrastructure is gaining strategic value, as Europe intensifies its efforts to completely eliminate reliance on Russian gas within two years. The newly upgraded pipeline network presents both a logistical opportunity and a strategic avenue to stabilize energy supplies in Ukraine. Greek Prime Minister Kyriakos Mitsotakis emphasized this point during talks with US officials, stating that Greece’s geographic location naturally positions it as the primary entry point for American LNG into Europe.

The link between geography and gas supply shows a causal relationship: Greece’s southern location and modern port infrastructure directly enable the transshipment of LNG into Southeastern Europe, making it an indispensable node in regional energy architecture.

US Strategy: Linking LNG Exports to Trade Goals

President Donald Trump's administration is intensifying efforts to leverage the United States’ position as the top global LNG exporter. The strategy is to encourage the EU to commit to larger volumes of US gas imports, using this as a bargaining chip in broader trade negotiations. The presence of senior US cabinet members and LNG executives in Athens signals a coordinated push to embed energy diplomacy into Washington's economic and geopolitical toolkit.

This reflects a correlation between energy trade and diplomatic influence, where growing LNG sales help reinforce transatlantic alliances and reduce Europe's exposure to Russian energy leverage. While energy trade does not directly cause political alignment, the alignment of energy interests creates overlapping zones of cooperation and mutual dependence.

Implications for Ukraine and Europe’s Energy Future

The discussions in Athens carry long-term implications. If effectively implemented, the routing of US LNG through Greece via the Vertical Corridor can offer Ukraine a more secure and diversified gas supply in the midst of war-related disruptions. Simultaneously, it positions the United States as not only a reliable energy provider but a strategic partner in Europe’s quest for energy autonomy.

This move signals an evolving architecture of energy security, wherein infrastructure and alliances are being recalibrated around shared threats and economic interdependence. The decisions made during this summit could influence Europe’s energy market dynamics, particularly pricing, supplier diversification, and LNG import infrastructure investments.

The Athens meeting underscores a new phase in transatlantic energy cooperation. Greece’s enhanced role as an LNG gateway, combined with Washington’s assertive energy diplomacy, marks a shift toward a more interconnected and strategically managed gas supply system. For Ukraine, this may translate into tangible support; for Europe, a faster pivot away from Russian energy; and for the US, deeper integration into European energy security frameworks.

Source: Bloomberg

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Blue River

Forex

Technical Analysis

The euro continues its attempts to regain lost ground, with the EURUSD pair trading near the 1.1500 mark. Discover more in our analysis for 6 November 2025.

EURUSD forecast: key trading points

Eurozone retail sales: previously at 0.1%, projected at 0.2%
US government shutdown continues
EURUSD forecast for 6 November 2025: 1.1550 and 1.1460

Fundamental analysis

The EURUSD forecast for 6 November 2025 reflects ongoing pressure from the strengthening US dollar. Amid rising demand for the US currency, the pair continues to trade near 1.1500, showing moderate volatility. Despite corrective moves, overall market sentiment remains in favour of the USD.

Key triggers influencing the EURUSD dynamics today:

Market participants expect further tightening of monetary policy in the US, which supports the dollar and limits the euro's recovery potential
Weak macroeconomic data from the eurozone, particularly GDP and business activity, intensifies pressure on the European currency, signalling a slowdown in the region's economy
Retail sales in the eurozone are forecast to rise slightly to 0.2% from the previous 0.1%, which could temporarily support the euro amid increased market sensitivity to even modest signs of improvement
The US government shutdown delays the release of several key data points, creating uncertainty and short-term volatility in the currency market

Overall, the euro has a chance for partial recovery after the previous decline. Technically, the pair is forming a corrective wave; however, sustainable growth requires stronger economic signals from the eurozone and a weakening of the US dollar.

EURUSD technical analysis

On the H4 chart, the EURUSD pair has formed an Inverted Hammer reversal pattern near the lower Bollinger Band. At this stage, the pair continues an upward wave following the received signal. Since the price remains within a downward channel, the EURUSD pair may test resistance around 1.1550. A rebound from this level would open the door for the continued downward momentum.

At the same time, today's EURUSD forecast also suggests an alternative scenario, where the EURUSD rate declines towards 1.1460 without testing the resistance level.

Summary

Today's EURUSD forecast favours the USD. At the same time, technical analysis suggests a price correction towards the 1.1550 resistance level before a decline.

Source: RoboForex

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Economic

A Record-Smashing Return to Dollar Debt

In a move watched closely by global credit markets, China’s Ministry of Finance successfully sold $4 billion in U.S. dollar-denominated sovereign bonds, including $2 billion in three-year notes and $2 billion in five-year notes. The offering was oversubscribed nearly 30 times, attracting a total of $118.1 billion in demand from over 1,000 investor accounts. This remarkable investor appetite, despite razor-thin spreads over U.S. Treasuries, signaled growing global confidence in Chinese sovereign debt.

The three-year bonds were priced to yield 3.646%, just on par with Treasuries, while the five-year notes offered 3.787%, only two basis points above Treasuries. These ultra-thin spreads are even tighter than China's previous tight pricing last year (1–3 basis points), confirming China's improved credit sentiment in global markets.

Secondary Market Surge: "Free Money" for Investors

Investor enthusiasm didn’t stop at the issuance. In the secondary market, both tranches tightened by around 40 basis points, delivering rapid gains for those who were allocated bonds. As Serena Zhou of Mizuho Securities noted, the pricing still felt like “free money”, prompting some investors to express disappointment over limited allocations.

According to Bloomberg, joint lead managers alone expressed $29 billion in interest, indicating that underwriters themselves were eager to hold the debt.

Who Bought the Bonds?

The allocation data reveals strong participation from major institutional investors. Approximately:

43% went to central banks, sovereign wealth funds, and insurers

32% to real money investors and hedge funds

23% to banks

Geographically:

Over half of the bonds were placed in Asia

25% were allocated to European investors

16% went to the Middle East and North Africa (MENA) region

Strategic Implications: A Benchmark and a Signal

The issuance is not just about raising capital it’s part of a broader strategy by Chinese authorities to deepen their dollar bond yield curve, providing a pricing benchmark for corporate issuers. After several difficult years marked by a property market crisis and Fed rate hikes, Chinese dollar bond issuance is rebounding, with nearly $90 billion in publicly announced deals so far in 2025 on track to hit a three-year high.

The bond sale signals a return to debt-financed investment strategies, according to analysts like Cisar, and suggests that investor risk appetite toward China is warming after years of caution.

Credit Confidence Restored?

With S&P Global Ratings assigning an A+ rating to the deal and secondary market enthusiasm confirming investor trust, the sale showcases China’s financial resilience and the global market's hunger for yield even at tight spreads. It also underscores China's ability to tap into deep global capital pools, even amid lingering geopolitical and economic uncertainty.

China’s dollar bond market re-entry was a stunning success, reaffirming its status as a trusted sovereign issuer. The $118 billion in demand reflects renewed optimism, growing risk tolerance, and a strategic shift back toward debt-financed development. As dollar bond issuance in China accelerates, this deal may serve as a benchmark for future public and private offerings, setting the tone for a more active and investor-friendly Chinese credit landscape in 2026 and beyond.