Denmark Is Finally Giving Up On EU Chat Control After Privacy Backlash

Forex

Economic

Summary:

Denmark, which holds the European Council presidency, has reportedly withdrawn the proposal that would have forced platforms like Telegram, WhatsApp and Signal to allow authorities to screen messages before they're encrypted and sent.

The proposed legislation, known as the Chat Control law, was first introduced in May 2022 as a method to combat the spread of illicit and illegal content through messaging services.

A revived version of it came up this year, with critics arguing again that it would undermine encrypted messaging and people's right to privacy.

The withdrawn proposal means it will remain voluntary.

Minister of Justice Peter Hummelgaard stated that the proposal will now "not be part of the EU presidency's new compromise proposal, and that it will continue to be voluntary," for tech giants to screen encrypted messages, according to a report by Danish daily newspaper Politiken on Oct. 30.

Current framework expires in April

The current voluntary framework expires in April 2026, and Politiken reported that Hummelgaard stated that if the years-long political stalemate over Chat Control were not resolved, it would leave the EU without any legal tools to combat bad actors using messaging services.

The backtrack on chat control was reportedly to ensure a new framework could be implemented before the deadline.

Tech giants and privacy advocates celebrate

X's Global Government Affairs team said on Saturday that Denmark's withdrawal is a "major defeat for mass surveillance advocates," and the platform will "continue to monitor the progress of these negotiations and oppose any efforts to implement government mass surveillance of users."

Source: X Global Government Affairs

Patrick Hansen, the director of EU Strategy and Policy at stablecoin issuer Circle, also applauded the news and stated it was a "Major win for digital freedoms in the EU."

The Electronic Frontier Foundation (EFF), a civil liberty nonprofit, shared a similar stance and speculated public pressure "pushed the EU Council to withdraw its dangerous plan to scan encrypted messages."

Lawmakers need to give up on mass surveillance

Thorin Klosowski, a security and privacy activist with the EFF, said in a blog post on Friday that lawmakers should stop attempting to bypass encryption under the guise of public safety.

He argues that the focus should be on "developing real solutions that don't violate the human rights of people around the world."

"As long as lawmakers continue to misunderstand the way encryption technology works, there is no way forward with message-scanning proposals, not in the EU or anywhere else," he said.

"This sort of surveillance is not just an overreach; it's an attack on fundamental human rights. The coming EU presidencies should abandon these attempts and work on finding a solution that protects people's privacy and security."

Ireland will assume the EU Council's presidency in July 2026, taking the reins from Denmark after a year in the role.

Source: COINTELEGRAPH

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James Whitman

Economic

Thailand's manufacturing sector expansion accelerated in October, reaching its fastest pace since May 2023, according to the latest S&P Global Thailand Manufacturing PMI data.

The headline PMI rose to 56.6 in October from 54.6 in September, marking the sixth consecutive month above the 50.0 neutral mark. This indicates a significant improvement in manufacturing conditions.

New orders increased at the steepest rate in two-and-a-half years, driven by successful business development and rising client interest. While external demand continued to decline, the fall in new export orders was only marginal and less severe than in September.

Production growth accelerated for the seventh consecutive month in response to rising new work. Thai manufacturers increased their workforce capacity for the second straight month to manage growing workloads.

Despite these efforts, backlogs accumulated at a survey record pace, and finished goods inventories declined for the fifth consecutive month as companies fulfilled orders.

Purchasing activity expanded in October, though stocks of purchases continued to decline due to high utilization of input products and shipment delays as lead times lengthened.

On the pricing front, average input costs stabilized after three consecutive months of decline, leading manufacturers to keep their selling prices unchanged at the start of the fourth quarter.

Business confidence improved to its highest level in two-and-a-half years, supported by hopes for business expansion plans and better economic conditions to drive sales in the coming year.

Jingyi Pan, Economics Associate Director at S&P Global Market Intelligence, noted that manufacturing output rose at the quickest pace in nearly two-and-a-half years, primarily driven by robust domestic demand.

Pan added that forward-looking indicators present a positive outlook for near-term output growth, suggesting the Thai manufacturing sector remains on track for continued growth in the coming months.

Source: Investing

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Gerik

Economic

Stocks

Tech-Led Rally Lifts Asian Markets After Wall Street’s Bullish Streak

Asian equities opened the week on a positive note, with South Korea leading regional gains and investor sentiment buoyed by a strong finish in U.S. markets. Momentum from Wall Street’s continued climb, particularly fueled by Amazon’s better-than-expected earnings, spilled over into Asia despite mixed economic data from China and ongoing geopolitical uncertainty.

The South Korean Kospi surged 2.6% to close at 4,212.20, with Samsung Electronics rallying 3.4% as investors rotated back into heavyweight tech names. This followed Friday’s 9.6% jump in Amazon’s shares, driven by a surprisingly large profit that lifted the S&P 500 to 6,840.20 just shy of its record high earlier in the week.

Meanwhile, Japan’s markets remained shut for a public holiday, removing one of the region’s largest contributors from the day’s activity. Futures for the Dow and S&P 500 indicated mild optimism, up 0.2% and 0.3% respectively, reflecting cautious confidence ahead of more earnings releases and economic data.

China’s Factory Activity Slows, Damping Momentum

Investor enthusiasm was more muted in China, where manufacturing data showed signs of slowing. The private RatingDog PMI slipped to 50.6 in October from 51.2 in September, while the official figure dropped to 49.0 remaining below the expansion threshold. These figures suggest moderating industrial growth, which weighed slightly on Shanghai equities, although the Composite Index still managed to rise 0.1% to 3,958.21. The Hang Seng in Hong Kong added 0.4%, supported by selective tech buying.

The Chinese data points highlight a likely correlation rather than a causation between recent policy uncertainty and weakening factory momentum. Slower activity could be driven by external demand shifts and cautious domestic consumption amid tax changes and ongoing reforms.

Geopolitical Backdrop: Taiwan and U.S.-China Relations

Markets largely shrugged off comments by U.S. President Donald Trump regarding Taiwan. While Trump suggested that Chinese President Xi Jinping had pledged to avoid action on the self-governed island during Trump’s tenure, this did not result in immediate market reactions. Investors remained focused on trade policy and earnings, though Taiwan’s market edged up slightly by 0.1%.

The limited reaction indicates that geopolitical risk, while present, did not materially impact short-term investor positioning at the start of the week. Traders appear to be taking a wait-and-see approach regarding the durability of any U.S.-China trade truce.

Wall Street Ends a Strong Month with Amazon’s Lead

Back in the U.S., major indices closed October on a high. The S&P 500 posted its sixth consecutive monthly gain the longest streak since 2021. Amazon’s surge, thanks to a market capitalization exceeding $2.4 trillion, accounted for a significant portion of the day’s index movement. Without it, the S&P would have posted a minor loss.

Apple also reported a positive earnings surprise, though the stock slipped 0.4% as investors digested revenue composition details. CEO Tim Cook highlighted strong iPhone and services performance. Despite this, broader concerns remain around inflated valuations and whether recent tech earnings can support sustained price increases.

Recent jitters over aggressive AI-related capital expenditures from Meta and Microsoft underscore those concerns. Investors remain wary of valuation bubbles forming, even as large-cap tech names continue to dominate index performance.

Commodities and Currency Markets Remain Steady

Oil prices inched higher, with U.S. benchmark crude trading at $61.21 per barrel and Brent crude rising to $65.03. These gains were modest but reflected underlying optimism in energy demand projections. Meanwhile, the dollar strengthened against the yen to 154.06, while the euro edged lower to $1.1532, reflecting a mild shift in risk sentiment and expectations around central bank policy divergence.

Asian markets entered November with renewed optimism, boosted by robust U.S. tech earnings and a continuation of Wall Street’s bullish trend. South Korea’s outsized performance illustrates the region’s sensitivity to global tech movements, while slower manufacturing figures in China and geopolitical undercurrents surrounding Taiwan serve as reminders of lingering fragilities. Investors are navigating a market environment that rewards strong fundamentals but remains susceptible to valuation concerns and policy shifts, both domestic and international.

Source: AP

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Gerik

Commodity

Economic

Gold Retreats Amid Policy Shift in World’s Largest Consumer Market

Spot gold declined to $3,997.40 per ounce in Singapore trading following a 2.7% weekly drop, as China’s unexpected move to cut longstanding tax incentives reshaped global sentiment. The Chinese government’s decision to partially revoke the value-added tax (VAT) rebate for certain gold sales, specifically for non-investment purposes, marks a critical pivot in the bullion market particularly for the retail and jewelry sectors. While the correction was relatively modest at 1% intraday, its symbolic impact on trader psychology was more pronounced.

Under the previous structure, Chinese retailers including both members and non-members of the Shanghai Gold Exchange and Shanghai Futures Exchange were permitted to deduct a 13% VAT on input costs for gold, regardless of its end use. This framework effectively reduced the cost of gold products, encouraging strong retail demand, especially in the jewelry segment. As of November, however, Beijing has amended this approach: only investment-grade gold sold by exchange members will continue receiving the full tax benefit. All other sales such as those used for jewelry or industrial products will be subject to a reduced 6% input VAT deduction.

This change, set to remain in place through the end of 2027, forces much of the downstream industry to absorb higher effective costs or pass them along to consumers, undermining affordability in a price-sensitive segment. Analysts at Citigroup noted that price increases are highly likely across the entire retail chain, amplifying inflationary pressure on gold jewelry.

Causal Relationship Between Policy and Price Movements

The price dip is not merely a coincidental occurrence alongside policy news. There is a direct causal link between Beijing’s VAT revision and reduced investor and consumer appetite. Jewelry-focused firms were the first to react, with Chow Tai Fook plunging as much as 12%, Chow Sang Sang dropping over 8%, and Laopu Gold falling more than 9% in Hong Kong trading. The new VAT structure discourages non-investment consumption by narrowing retailer margins and making gold jewelry less competitive in price.

In this context, gold’s sharp October rally fueled partly by retail hoarding behavior was bound to be corrected, especially as speculative demand subsided. The recent correction, then, is more than a technical pullback; it reflects a structural policy-induced adjustment, particularly in Asia, where physical demand traditionally anchors long-term support levels.

Global Sentiment and Investor Outlook

Although Chinese consumption was not the primary driver of this year’s record-breaking surge in gold prices, which have soared over 50% year-to-date, the recent tax shift introduces a significant headwind to sentiment. According to BullionVault’s Adrian Ash, this may signal the start of a deeper correction phase, welcomed by some investors seeking more attractive reentry points.

Central banks and institutional investors remain key pillars supporting gold’s upward trajectory, due to persistent geopolitical risks and currency instability. However, localized disruptions such as tax policy in China can create short- to medium-term volatility that interrupts bullish momentum.

China’s recalibration of tax incentives for gold sales, while not devastating in isolation, introduces a new layer of complexity to an already sensitive commodity market. It weakens demand from the world’s largest consumer, pushes downstream firms toward price hikes, and injects bearish sentiment into global gold trade. The full impact of this shift will unfold in the coming quarters, but for now, gold’s breach of the $4,000 level underscores how quickly policy changes in a single nation can ripple through global markets.

Source: Bloomberg

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Economic

Commodity

Malaysia Moves to Anchor Rare Earths Industry with Magnet Facility

Prime Minister Anwar Ibrahim announced that Malaysia’s rare earth ambitions are taking a concrete step forward with the construction of a 600 million ringgit ($142 million) magnet manufacturing plant in the Kuantan district of Pahang. The project led by Lynas Rare Earths of Australia and JS Link of South Korea will produce 3,000 tonnes of neodymium magnets annually, crucial components in electric vehicles, wind turbines, semiconductors, and defense systems.

Anwar emphasized that the project has already moved beyond a memorandum of understanding. “JS Link has purchased the land, and the investment is in what’s left is to accelerate the process,” he stated, confirming that Malaysia’s Trade Ministry will supervise progress due to the strategic importance of rare-earth processing.

Building a Domestic Supply Chain for Critical Minerals

The move comes amid growing global pressure to diversify critical mineral supply chains, reducing overreliance on China, which currently dominates over 80% of the rare earths processing market. Malaysia, estimated to hold 16.1 million metric tons of rare earth deposits, has historically lacked the technology and capacity to fully exploit these resources. The new magnet plant is part of a broader strategy to shift from raw material exporter to value-added processor, allowing Malaysia to participate more deeply in high-tech global supply chains.

This development has both economic and strategic implications. By engaging in value-added production, Malaysia is increasing its potential as a regional hub for advanced materials and clean technology, aligning with its broader industrial upgrading agenda.

Geopolitical Context and Partnerships

Malaysia’s rare earth strategy is unfolding amid intensifying geopolitical competition over critical minerals. In recent months, the country has engaged with both China and the United States on rare-earth cooperation. In October, Malaysia signed a deal with the US to explore joint efforts in diversifying rare earth supply chains, while ongoing negotiations with China focus on technical collaboration in refining and processing.

This dual-track diplomacy reflects Malaysia’s intent to remain non-aligned and investment-friendly, attracting partnerships from both East and West. The involvement of Lynas already operating a rare earth separation plant in Malaysia and JS Link provides a technological backbone and supply assurance, enhancing investor confidence and accelerating the nation’s industrial upgrading.

The magnet plant signals a decisive step in Malaysia’s rare earths strategy, transitioning from passive resource holder to active player in high-tech manufacturing. With major partners on board and construction underway, Malaysia is now positioning itself as a competitive node in the global rare earths value chain. The success of this project could redefine Malaysia’s role in clean energy, electronics, and defense technology ecosystems and may set a template for how resource-rich but technologically constrained nations can leapfrog into advanced manufacturing through strategic collaboration.

Source: Reuters

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Economic

Private Manufacturing Data Shows Signs of Strain

China’s manufacturing momentum showed renewed signs of cooling in October, with the RatingDog General Manufacturing PMI, compiled by S&P Global, falling to 50.6 from 51.2 in September. The figure fell short of the 50.9 expected by analysts and underscores softening factory activity just as global demand uncertainty continues to weigh on exports.

Although the reading remains above the 50-point threshold that separates expansion from contraction, it contrasts sharply with the official PMI of 49.0, released last Friday by the National Bureau of Statistics, which showed factory output shrinking at the fastest pace in six months. This divergence highlights structural differences in survey methodology: the private index focuses more heavily on small- and mid-sized exporters, while the official data covers a broader swath of the economy.

Export Orders Fall and Confidence Weakens

A major drag on October’s performance came from new export orders, which declined at the fastest pace since May, driven by rising trade uncertainty amid earlier escalations with the US. Surveyed firms reported subdued demand and a cautious stance toward future production plans.

The business confidence gauge fell to its lowest in six months, suggesting that manufacturers are more pessimistic about their 12-month outlook. The slowdown in new business and output growth compounded this sentiment. These data points indicate a causal relationship between geopolitical tensions and the moderation in factory activity, rather than a temporary fluctuation.

Employment Uptick Offers a Silver Lining

In contrast to the broader slowdown, the employment index posted a surprise uptick, rising for the first time since March and reaching its highest level since August 2023. While the hiring rebound may reflect labor restructuring or delayed effects of prior stimulus, its sustainability remains uncertain given the underlying weakness in orders and investment.

The survey comes just days after the US and China announced a temporary trade truce, following a bilateral summit between President Donald Trump and President Xi Jinping. As part of the deal, the US agreed to halve fentanyl-related tariffs on Chinese goods, suspending expansion of the Commerce Department’s export blacklist and pausing Section 301 investigations into China's logistics and shipbuilding industries.

In return, China will lift retaliatory tariffs on a wide range of US agricultural products, including soybeans, pork, and beef, and terminate anti-dumping investigations against American chipmakers. The easing of restrictions on Nexperia chip exports also suggests some softening of Beijing’s protectionist stance, which may gradually restore confidence in the tech supply chain.

Mixed Outlook for 2025 and Beyond

Despite the trade détente, the outlook for China’s manufacturing remains cautious. Growth in the third quarter slowed to 4.8%, the weakest in a year, and fixed-asset investment declined 0.5%, the first drop since 2020. Structural headwinds, such as the prolonged property downturn and the fading impact of earlier consumption subsidies, are likely to cap further acceleration.

Export performance has remained relatively resilient thanks to market diversification, with sales to Southeast Asia up 14.7%, to the EU up 8.2%, and to Africa surging over 28%. Still, exports to the US have declined by double digits every month since April, reinforcing China’s push to reduce dependence on American demand.

October’s weaker PMI reading reflects the delicate balance China must maintain between global trade dynamics and domestic structural pressures. While the recent trade truce with the US offers short-term relief and could stabilize orders in the months ahead, waning business confidence, weak fixed investment, and a declining property sector present deeper challenges. The modest rebound in factory employment offers a positive signal, but unless global demand and domestic investment regain traction, China’s manufacturing recovery will likely remain uneven into 2026.

Source: CNBC

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Winkelmann

Forex

Political

China–U.S. Trade War

Economic

China's factory activity growth in October missed market expectations, as trade tensions with the U.S. intensified during the month, according to a private survey released Monday.

The RatingDog China General Manufacturing PMI, compiled by S&P Global, dropped to 50.6 in October from the six-month high of 51.2 in September, missing analysts' expectations of 50.9 in a Reuters poll.

Staying above the 50-benchmark that separates growth from contraction, the private survey numbers were better compared to the official survey released last Friday that showed manufacturing activity falling to 49.0, its worst contraction in six months.

Private surveys, previously conducted by Caixin and S&P Global, have usually painted a better picture than official polls over the past years as they have focused more on export-oriented manufacturers.

The RatingDog private survey covers 650 manufacturers and collects responses in the second half of each month while the official PMI surveys a larger sample of over 3,000 companies at month-end.

With the extension of the U.S.-China trade truce and expected recovery in export orders, the manufacturing PMI is likely to rebound modestly in the coming months as business confidence stabilizes, said Dongming Xie, managing director and head of Asia macro research at OCBC Bank.

China and the U.S. reached a trade truce last week following a meeting between American President Donald Trump and his Chinese counterpart, Xi Jinping, in South Korea, stabilizing relations after an escalating trade battle that had sparked fears of a global economic downturn.

Under the agreement, the U.S. will lower the fentanyl-linked tariffs on Chinese goods by half to 10%, taking the total rate on Chinese goods to around 47%, in response to China pausing its sweeping export controls on rare earth metals.

The U.S. will also suspend the implementation of the 50% ownership "penetration rule" under export controls and the Section 301 investigation into China's maritime, logistics and shipbuilding sectors.