Trump Claims Xi Will Accelerate U.S. Agricultural Buys Amid Broader China Trade Thaw

China–U.S. Trade War

Economic

Summary:

President Donald Trump stated that Chinese leader Xi Jinping has “more or less” agreed to increase the pace and volume of agricultural imports from the U.S....

Renewed Agricultural Commitments Surface in Trump-Xi Dialogue

U.S. President Donald Trump revealed that Chinese President Xi Jinping has tentatively agreed to expand and expedite purchases of American agricultural products, particularly soybeans. Speaking aboard Air Force One, Trump said he requested a faster and larger buying schedule from Xi during their one-hour phone conversation on Monday, and that Xi “more or less agreed” to the request. While the language suggests informal consensus rather than finalized policy, the statement reinforces recent moves by China to restore large-scale U.S. soybean imports after nearly a year of restrained purchases.

This latest development builds on earlier confirmations from U.S. officials, including Treasury Secretary Scott Bessent, that China would buy 12 million metric tons of soybeans this season and commit to 25 million tons annually over the next three years. That deal helped lift U.S. soybean futures to a 15-month high and restore optimism among farmers and exporters who had been heavily affected by the protracted trade standoff.

Strategic Trade Discussions Amid Asia-Pacific Geopolitical Tensions

The Trump-Xi exchange also addressed rising tensions between China and Japan concerning Taiwan. Trump later briefed Japanese Prime Minister Sanae Takaichi, calling their conversation “great” and affirming his view that “that part of the world is doing fine.” Yet, this optimistic tone comes against a backdrop of deteriorating diplomatic ties between Beijing and Tokyo. The dispute, triggered by Takaichi’s remarks about possible Japanese military involvement in the Taiwan crisis, has escalated into tit-for-tat responses China issuing travel advisories, suspending Japanese cultural imports, and initiating maritime patrols, while Japan plans missile deployments near Taiwan.

By attempting to mediate in this geopolitical dispute, Trump is positioning the U.S. as a stabilizing influence in East Asia while simultaneously using diplomacy to advance trade interests. The interlinking of these two tracks security and commerce shows the multidimensional nature of U.S.-China relations at this stage.

Rare Earths and Mineral Export Licenses Still on the Table

Another key issue Trump is pressing is the finalization of “general licenses” for U.S.-bound Chinese exports of rare earths and critical minerals, a vital component of the trade truce struck during last month’s bilateral summit in South Korea. The licenses are expected by the end of November, and their implementation is seen as crucial for maintaining momentum in the broader trade reconciliation process.

These licenses are not only economically significant but also carry strategic importance. As the global race for control over critical mineral supply chains intensifies, a stable export framework from China to the U.S. would be a notable de-escalation in what has otherwise been a tense trade environment. If China delivers on this front, it could also enhance the credibility of its renewed agricultural commitments.

Underlying Motivations and Strategic Calculations

Trump’s emphasis on agricultural purchases reflects both political and economic motives. Domestically, it addresses concerns in key farm states particularly Iowa and Illinois where soybean producers have faced a volatile export environment due to tariff battles and retaliatory boycotts. Internationally, it seeks to portray Trump as a dealmaker capable of extracting concessions from China while reinforcing the U.S. presence in regional diplomacy.

However, the causality remains conditional. Xi’s reported willingness to purchase more U.S. products does not necessarily guarantee follow-through unless the broader terms of the truce especially around tariffs, technology access, and strategic trust are honored. Moreover, U.S. domestic politics, such as upcoming elections and agricultural lobby pressures, may also influence how Trump positions these negotiations publicly.

President Trump’s comments suggest renewed momentum in U.S.-China trade normalization, particularly in agriculture. While Xi’s tentative approval is a positive signal, the ultimate outcome depends on whether both sides institutionalize these verbal commitments through enforceable agreements. At the same time, the U.S. is navigating a delicate geopolitical landscape, balancing its role as a trade negotiator with that of a regional power broker amid growing Sino-Japanese frictions over Taiwan. These overlapping challenges highlight that progress in trade may hinge as much on geopolitical stability as on economic diplomacy.

Source: Reuters

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Gerik

Economic

Recalibrating Policy Focus: From U.S. Uncertainty to Yen-Led Inflation Pressures

The Bank of Japan (BOJ) is reasserting its hawkish stance in response to a resurgent depreciation in the yen, signaling that an interest rate hike could occur as soon as December. Sources familiar with internal discussions indicate a shift in BOJ communications away from external economic concerns such as the U.S. Federal Reserve’s outlook toward domestic inflationary risks tied to currency weakness. This pivot in tone aims to prepare financial markets for a potential near-term policy tightening without triggering volatility.

A key meeting last week between Prime Minister Sanae Takaichi and BOJ Governor Kazuo Ueda appears to have eased political resistance to rate hikes. With the new administration's acceptance of gradual tightening, the BOJ now has a clearer runway to act. Finance Minister Satsuki Katayama added further support, noting she had “no particular objection” to the current direction of monetary policy.

While Takaichi is traditionally seen as a monetary dove, her silence on the matter combined with Katayama's public comments has been interpreted as tacit endorsement. This reduces the political risk of a December hike and suggests that the BOJ’s evolving narrative has backing from the government’s highest levels.

Board Sentiment Turns Decisively Hawkish

A chorus of voices within the BOJ’s nine-member policy board now supports raising rates from the current 0.5% level. Notably, Junko Koeda and Kazuyuki Masu who both expressed concerns about persistent inflation may soon align with the two board members who previously proposed hikes in September and October. Masu’s remark that the timing of a hike was “nearing” helped push Japan’s five-year bond yield to a 17-year high on Tuesday, illustrating the causal link between policy commentary and bond market reactions.

Even Governor Ueda, known for his dovish stance, acknowledged in parliament that the BOJ is now openly discussing the “feasibility and timing” of a hike marking a subtle but important shift in tone that breaks from his earlier ambiguity.

Structural Inflation Concerns Amplified by Weak Yen

The BOJ’s evolving stance is driven in large part by the view that a weak yen is no longer a transient concern. Rather, it is seen as structurally inflationary due to its direct impact on import prices. As the yen sinks to 10-month lows against the dollar, it feeds through into higher consumer prices potentially pushing inflation beyond the BOJ’s 2% target for longer than anticipated.

This inflationary feedback loop is compounded by a gradual normalization in wage expectations. Early indications suggest next year’s wage negotiations could produce stronger outcomes, undermining Governor Ueda’s previous rationale for caution and increasing the likelihood of a policy move.

External Factors Still Loom Large in Timing Decision

Despite the BOJ’s stronger signaling, a December rate hike remains contingent on the U.S. Federal Reserve’s policy decision scheduled for the week before the BOJ’s December 18–19 meeting. If the Fed holds rates or hints at fewer future cuts, this could further weaken the yen and pressure the BOJ to act. Conversely, a dovish Fed outcome might alleviate yen depreciation and delay the BOJ’s tightening to January.

The timing decision also involves managing internal divisions. Some of Takaichi’s economic advisers continue to warn of the risks of a premature hike. While their influence appears muted for now, their views could re-emerge if global economic indicators deteriorate or the yen stabilizes unexpectedly.

Market Repricing Reflects Heightened Expectations

Financial markets are increasingly pricing in a BOJ hike, with a Reuters poll showing a slim majority of economists expecting the policy rate to rise to 0.75% by March. Yields on Japanese government bonds have responded accordingly, reinforcing the narrative that normalization is no longer a distant prospect.

Kristina Hooper of Man Group summarized the situation aptly: “There is a real desire to normalise monetary policy.” She pushed back on the notion that Prime Minister Takaichi would force the BOJ into long-term dovishness, arguing instead that current signals reflect a deliberate and institutionally supported policy recalibration.

The Bank of Japan’s renewed hawkishness represents a fundamental shift from years of ultra-loose monetary policy. While uncertainties remain, particularly around U.S. policy and political sensitivities, the combination of sustained yen weakness, firming inflation, and coordinated messaging points to a genuine willingness to move. If implemented, a December rate hike would mark not only a tactical response to currency pressures but also a broader move toward long-overdue policy normalization.

Source: Reuters

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Gerik

Economic

Beyond the Cash Rate: A Complex Web of Global Impacts

Penelope Smith, head of the international department at the Reserve Bank of Australia (RBA), underscored in a speech on Wednesday that Australia’s financial conditions are not solely determined by domestic monetary policy. Instead, international factors such as global credit spreads, equity risk premia, and capital market trends play a growing role in shaping the domestic financial environment. While the cash rate remains a primary tool of policy, Smith argued that its effectiveness is increasingly moderated by developments abroad, highlighting a growing divergence between domestic policy levers and actual financial conditions on the ground.

A central theme of Smith’s address was the uncertain trajectory of the so-called neutral rate the theoretical interest rate at which monetary policy is neither expansionary nor contractionary. According to Smith, post-pandemic economic shifts have challenged earlier assumptions that neutral rates would decline. Instead, current evidence suggests that these rates have remained stable or possibly even increased. This introduces ambiguity into the RBA’s task of calibrating monetary settings, especially in light of recent data indicating that financial conditions may be easier than the headline policy rate implies.

Bank-Dominated System Buffers Global Capital Flows

One mitigating factor in Australia is the structure of its financial system, which is dominated by domestic banks rather than capital markets. Smith noted that this makes Australia’s financial conditions somewhat less sensitive to international capital market fluctuations compared to economies like the United States, where bond markets and equity valuations exert greater influence on the cost of finance. However, she acknowledged that even in a bank-heavy system, global influences still seep in through channels such as wholesale funding costs and international risk sentiment.

Smith also presented a broad review of international financial developments over the past year. She observed that while there has been no major flight from U.S. dollar-denominated assets, some reserve managers are increasing their gold holdings as a precautionary response to geopolitical events particularly after Russia’s reserves were frozen following its 2022 invasion of Ukraine. This trend suggests a growing effort among emerging market central banks to diversify their portfolios and hedge against currency-specific risks.

Policy Caution Amid Domestic Inflation Concerns

Despite having cut interest rates three times in 2025, bringing the cash rate to 3.6%, the RBA faces renewed inflationary pressures. The third-quarter surge in consumer prices has fueled debate over whether the current stance is still restrictive. Market pricing now indicates less than a 50% chance of another rate cut in May 2026, reflecting skepticism over the central bank’s room to ease further. The neutral rate’s ambiguity complicates this outlook: if it has indeed risen, then a 3.6% policy rate may be closer to neutral than previously assumed, limiting the scope for further accommodation without reigniting inflation.

In conclusion, Smith emphasized that financial policymakers should brace for future episodes of market volatility and dislocation. Given the fluid global landscape ranging from monetary tightening in major economies to geopolitical uncertainty there is a heightened need for flexibility and resilience in the RBA’s policy approach. The central bank must navigate not just domestic inflation and output data, but also complex and interdependent global financial dynamics.

Smith’s remarks signal a growing awareness within the RBA that monetary policy cannot operate in isolation. The interplay between global financial conditions and domestic lending rates, risk perception, and liquidity makes it increasingly challenging to assess whether policy is appropriately calibrated. As inflation risks persist and the neutral rate remains elusive, Australia’s central bank faces a delicate balancing act shaped as much by external factors as by domestic economic fundamentals.

Source: Bloomberg

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Winkelmann

Political

Economic

· Kevin Hassett is the leading candidate for Fed Chair.

· He strongly supports significant interest rate cuts.

· Trump's influence over the Fed may grow with this appointment.

Kevin Hassett, who served as Donald Trump's top economic adviser, is now the leading contender to become the next Chair of the U.S. Federal Reserve. Known for his vocal support of sharp interest rate cuts, Hassett's potential appointment could signal a major shift in the central bank's approach to monetary policy.

As the 2024 presidential election looms, this move could reflect Trump's intent to reshape the Fed with allies who support his pro-growth, low-rate economic philosophy. Hassett has been consistent in advocating for lower rates to boost economic activity, even at the risk of inflation.

What This Means for Monetary Policy

If appointed, Kevin Hassett could steer the Federal Reserve toward an aggressive rate-cutting strategy. This approach contrasts with the current Fed policy, which has focused on keeping inflation in check through higher interest rates.

Markets may interpret his leadership as a pivot toward looser monetary policy, especially if economic conditions weaken or political pressure mounts. This shift could have far-reaching effects on everything from the U.S. dollar to global crypto markets, as lower rates often stimulate risk-on investment behavior.

Political Implications and Market Reactions

Trump's increasing influence over the Fed could reignite debates about central bank independence. Critics argue that politically motivated rate cuts could undermine long-term financial stability. On the other hand, supporters believe such measures are necessary to sustain economic momentum.

If Kevin Hassett is officially nominated and confirmed, markets may brace for a more dovish Fed stance. This development could energize both stock and crypto markets, which typically benefit from low-interest environments.

Source: CryptoSlate

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Gerik

Economic

Commodity

New Purchases Reflect Policy Shift After Trade Truce

China has recently resumed large-scale purchases of U.S. soybeans, securing at least 10 to 15 cargoes for January shipment from Gulf Coast and Pacific Northwest ports. This buying spree comes directly after a reported breakthrough in trade negotiations between the U.S. and China. According to traders familiar with the deals, contracts were signed beginning Tuesday, reflecting a sudden reactivation of Chinese demand for American soy amid improving bilateral relations.

This development follows U.S. Treasury Secretary Scott Bessent’s October 30 announcement that China had agreed to a strategic soybean purchasing commitment. The deal includes an immediate purchase of 12 million metric tons for the current season and an annual commitment of 25 million tons through 2028. This announcement was part of a broader reconciliation framework discussed during a summit between President Donald Trump and President Xi Jinping in South Korea.

Chicago Futures React Sharply as Prices Reach New Highs

Soybean futures on the Chicago Board of Trade responded swiftly to the news. The most active contract rose 1.4% to $10.09-1/2 per bushel in overnight trading, after initially dipping. It later peaked at $11.14-1/2 its highest level since July 2024 surpassing this week’s previous 15-month high. This price movement reveals a direct causal relationship between geopolitical announcements and commodity markets, especially when the asset is highly exposed to export dynamics, as with U.S. soybeans.

CM Navigator analyst Donatas Jankauskas noted that if the outlined commitments are fulfilled, Chinese demand could return to the 2023/24 levels by 2026/27. This statement emphasizes that the deal is not merely a short-term political gesture but could mark the beginning of a multi-year demand restoration for American soybean producers.

This change in Chinese procurement behavior reverses months of reduced engagement with U.S. agricultural exports. Previously, amid a tense trade standoff, China had significantly curtailed its reliance on U.S. supply, instead turning to Brazilian and Argentine sources. The recent pivot suggests a strategic recalibration that prioritizes diversified sourcing while leveraging geopolitical alignments.

Iowa Farmers Stand to Benefit as Prices and Exports Rebound

For U.S. agricultural states particularly Iowa and Illinois, the two largest soybean-producing regions the announcement provides a timely boost. Iowa Agriculture Secretary Mike Naig stated that expanded purchases by China would have a “meaningful impact” for farmers currently navigating a challenging economic environment. The sentiment was echoed by Tom Adam, president of the Iowa Soybean Association, who highlighted that the agreement helps address long-standing concerns about market access and purchasing volatility.

This policy-driven demand shift offers not only immediate pricing support but also long-term stability to U.S. growers. Farmers in the Midwest, who had suffered from years of trade disruptions, may now re-engage in forward contracting and investment planning with greater confidence.

Outlook Hinges on Policy Follow-Through and Logistics Execution

While the commitment figures are substantial, their impact will depend on consistent implementation and logistical delivery. COFCO’s recent purchase of three soybean cargoes ahead of the Trump-Xi summit already hints at an operational shift in Chinese import planning. Still, the durability of these agreements depends on political stability and ongoing negotiations over broader trade terms.

The relationship between political diplomacy and commodity markets remains evident. Price movements, trading volumes, and farmer sentiment are highly responsive to official statements and policy shifts. As such, markets will likely continue to monitor follow-up purchases and export data to validate whether these commitments translate into sustainable trade flows.

China’s purchase of at least 10 new soybean cargoes, framed within a wider long-term purchasing agreement, reflects not just a diplomatic breakthrough but also a potential structural reset in U.S.-China agricultural trade. With futures surging and Midwest farmers regaining export access, the economic consequences of this trade truce are already unfolding in both market behavior and producer optimism. However, full realization of these benefits will depend on continued adherence to the agreement and on-the-ground execution of the trade volumes promised.

Source: Reuters

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Gerik

Economic

Stocks

Investor Optimism Grows as New Fed Chair Speculation Mounts

Equity markets across the Asia-Pacific region surged on Wednesday, closely tracking gains on Wall Street. The optimism was largely driven by rising market expectations that the U.S. Federal Reserve will implement a rate cut in December. This momentum intensified following reports that Kevin Hassett, a known supporter of accommodative monetary policy and current White House National Economic Council Director, is the leading contender to replace the Fed Chair. Investors perceive Hassett’s potential appointment as aligning with President Donald Trump's preference for lower interest rates, reinforcing the probability of imminent policy easing.

U.S. Treasury Secretary Scott Bessent reinforced this narrative by indicating that the administration may announce the new Fed Chair before Christmas. At the same time, dovish remarks from New York Fed President John Williams, who mentioned that there is room to reduce interest rates “in the near term,” further solidified investor conviction. As a result, the CME FedWatch tool now reflects an 84% likelihood of a December rate cut, significantly influencing both U.S. and global investor sentiment.

Japanese Equities Rise as Tech Leads Recovery

Japan’s Nikkei 225 rose 1.94%, and the broader Topix index increased 0.9%. Technology stocks led the rally for a second day, reflecting heightened investor appetite for growth sectors amid declining bond yield expectations. Shares in semiconductor testing firm Advantest climbed 2.5%, while Tokyo Electron gained 0.61%. Lasertec and Renesas Electronics added more than 2% and 1%, respectively. Notably, SoftBank Group surged 5.9%, benefiting from its tech-focused portfolio.

However, Kioxia shares dropped over 12% after reports that Bain Capital would sell ¥350 billion (approximately $2.24 billion) worth of shares, reducing its ownership from 51% to 44%. This sudden strategic divestment signals a potential shift in investor confidence, possibly linked to recent earnings underperformance, as Kioxia's fiscal Q2 results had already disappointed the market, triggering a 23% decline post-announcement.

Broader Regional Gains Supported by Global Sentiment

South Korea’s Kospi rose by 0.67%, and the Kosdaq index advanced 0.64%, reflecting broad-based gains among Asia’s technology and industrial shares. Meanwhile, Australia’s S&P/ASX 200 rose 1.2% at open and closed up 0.83%, despite fresh inflation data showing a 3.8% annual rise in October, its fastest since April. Although the inflation surge might typically restrain equity sentiment, the global rate-cut narrative has, for now, overshadowed domestic price concerns.

In Greater China, Hong Kong’s Hang Seng Index gained 0.59% while the mainland CSI 300 rose 0.95%, with improved risk appetite spilling over from the U.S. market. Taiwan’s Taiex rose 1.4%, led by Foxconn’s 2% gain. The company received a green light for a revised tax incentive deal worth $16 million to support an additional $569 million investment in its Wisconsin operations, suggesting ongoing global supply chain expansion.

Wall Street Performance Reinforces Upbeat Mood

Wall Street’s sharp rebound on Tuesday provided the backdrop for Asia’s performance. The Dow Jones Industrial Average surged 664.18 points or 1.43% to close at 47,112.45. The S&P 500 and Nasdaq Composite added 0.91% and 0.67%, respectively. This recovery was especially significant given that all three indexes were in negative territory earlier in the session highlighting how sensitive current markets are to rate policy shifts.

The surge across Asia is deeply tied to U.S. monetary policy expectations, underlining a causal relationship between anticipated rate changes and investor risk appetite. While markets have priced in near-term rate relief, future sentiment hinges on whether the leadership transition at the Federal Reserve materializes and whether economic indicators continue to justify easing. Until then, global equity performance, especially in rate-sensitive sectors such as technology, will remain closely correlated with Fed communication and macroeconomic trends.

Source: CNBC

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Justin

Forex

Economic

China bought at least 10 cargoes of U.S. soybeans worth around $300 million in contracts signed since Tuesday, two traders with knowledge of the deals said, a day after the presidents of both countries spoke on the phone.

The purchases of the unusually large volumes extend a surge in Chinese buying after the recent thaw in U.S.-China trade relations. U.S. President Donald Trump touted relations with China as "extremely strong" after a phone call with his Chinese counterpart Xi Jinping on Monday.

Trump said he had pressed Xi to accelerate and increase Beijing's purchases of U.S. goods during the call, and that the Chinese leader had "more or less agreed".

One trader said China bought about 12 cargoes, while another estimated the volume at 10–15. Each cargo is about 60,000 to 65,000 metric tons.

All the cargoes are scheduled for January shipment from U.S. Gulf Coast terminals and Pacific Northwest ports, the sources said on Wednesday.

The purchases come despite U.S. soybeans being priced higher than Brazilian supplies.

China, which had largely shunned U.S. soybeans for months amid a tense Washington–Beijing trade standoff, has stepped up purchases recently following late-October talks between the two countries' leaders in South Korea.

State-run grain buyer COFCO has led the buying, booking nearly 2 million tons of U.S. soybeans since late October, according to U.S. Department of Agriculture data.

The recent deals still remain well below the 12 million tons of purchases announced by the White House.

However, U.S. Treasury Secretary Scott Bessent said on Tuesday Chinese purchases of American soybeans are "right on schedule," citing an agreement for Beijing to buy 87.5 million tons of the U.S. product over the next three and a half years.