Strengthening the Alliance: Trump and Takaichi Showcase a Strategic Partnership

Defense, Diplomacy, and Domestic Politics: Takaichi Steps Into a Complex Role

Trade Deal or PR Exercise? The $550 Billion Investment Question

North Korea, Human Rights, and the Indo-Pacific Strategy

A Symbolic Alliance with Tactical Ambiguity

Source: Bloomberg

In focus today

In Sweden, the Riksbank will release the semi-annual Business Survey at 9.30 CET. While often overlooked by markets, the survey has historically been a key input for the Riksbank's monetary policy deliberations. We expect it to align with the view of the Riksbank's main scenario at this juncture, with a still weak but gradually recovering economy. Given persistently high inflation, we are paying particular attention to the quantitative measures on expected price changes. The May 2025 report showed that companies selling to households planned to raise prices over the next 12 months, reflecting higher purchasing costs and their inability to fully offset previous cost increases.

Economic and market news

What happened overnight

The US and Japan have signed a framework agreement aimed at securing supply chains for critical minerals and rare earths, reducing dependence on China. In a statement, the White House emphasised that the deal seeks to enhance the resilience and security of critical mineral and rare earth supply chains for both nations.

What happened yesterday

In the euro area, bank lending continued to grow in September, with loans to non-financial corporations increasing by 2.9% y/y. The credit impulse, which correlates more closely with GDP growth, remained stable at 0.3% of GDP, indicating that lower policy rates are still supporting the economy. This suggests euro area GDP likely grew in Q3, albeit at a slower pace than in the first half of the year. We expect Thursday's GDP data to confirm a modest 0.1% q/q growth for Q3.

The German Ifo indicator rose slightly more than expected in October, rising to 88.4 from 87.7. However, the current situation assessment declined unexpectedly to 85.3 – the lowest since February – pointing to ongoing economic challenges. In contrast, expectations rose sharply to 91.6 from 89.8, signalling optimism. While Ifo's current situation assessment remains weaker than the recent uptick in PMIs, the rebound in expectations and stronger PMIs suggest a gradual recovery in the German economy over the coming year.

Equities: Equities were on a steady grind higher through yesterday's session. S&P 500 ended 1.2% higher, Nasdaq 1.9% and Russel 2000 0.3% higher, driven by (yet again) tech and cyclical stocks. Qualcomm announced that they will start shipping their new AI chip next year and led the rally. Overnight, Asian markets are somewhat mixed with Nikkei down 0.4% and Shenzen 300 up 0.2%.

FI and FX: USD continued to weaken overnight, with EURUSD moving towards 1.1670 and USDJPY dropping below 152 as a readout from Scott Bessent's meeting with Japan's Katayama indicated that BoJ policy and exchange rate volatility were discussed, serving as a reminder that the US administration prefers a weaker dollar. US yields fell from late afternoon and the 10y UST is now back just below 4%. We expect the Fed to announce an end to QT in Treasuries at Wednesday's meeting, and as a rate cut of 25bp is widely expected, this could be a bigger market mover in our view. With cuts fully priced for both October and December, we think near-term risks for the USD remain asymmetrically tilted to the upside. EURSEK remains at the lower end of the recent 10.90-11.10 range and EURNOK has been mostly sideways since Friday afternoon in a 11.62-11.66 range.

Source: ACTIONFOREX

The veteran strategist believes that a mix of improving geopolitical sentiment, potential rate cuts, and surging institutional demand could permanently anchor BTC above $100,000.

Market Mood Shifts From Fear to Confidence

Kendrick noted that the global environment for risk assets has improved dramatically over the past week. What started as a period of anxiety in global markets has quickly turned into renewed optimism as signs of cooperation between the United States and China emerged. Reports that Washington would delay restrictions on China's rare-earth exports, coupled with Beijing's willingness to increase imports of U.S. agricultural goods, helped ease market tensions ahead of the Donald Trump–Xi Jinping summit in South Korea.

These developments, Kendrick argued, have reignited confidence in the global economy and helped push investors back into riskier assets. One key indicator of this shift, he said, is the Bitcoin-to-gold ratio, which recently climbed above levels seen before the market pullback in early October. "A sustained rise above 30 in this ratio would confirm that the fear phase is behind us," Kendrick wrote in his analysis.

ETF Flows Could Cement Bitcoin's Strength

Beyond macro sentiment, the Standard Chartered strategist believes the next big driver for Bitcoin will be inflows into spot Bitcoin ETFs. He noted that roughly $2 billion exited gold-backed ETFs in just three days last week and suggested that if even half of that capital shifts into Bitcoin products, it could fuel another strong leg upward.

In his view, this transition marks a structural change in how institutional investors allocate funds. "The halving cycle used to define Bitcoin's major price moves, but that narrative is fading," Kendrick said. "ETF inflows are now the dominant force shaping Bitcoin's long-term direction."

Central Bank Policy Adds Fuel to the Rally

Kendrick also expects macroeconomic policy to favor Bitcoin in the near term. The Federal Open Market Committee (FOMC) is widely expected to approve a 25 basis point interest rate cut this week — a move that could add further liquidity to global markets and lift risk-sensitive assets like cryptocurrencies.

He added that upcoming earnings reports from major technology companies such as Apple, Google, and Microsoft — as well as from crypto-linked firms like Coinbase and Strategy Inc. — could reinforce positive sentiment if results surpass expectations.

A Structural Shift for Bitcoin

In his closing remarks, Kendrick said that if this week's developments play out as expected, Bitcoin's six-figure level could become a long-term price floor rather than a temporary milestone.

"If macro conditions remain supportive and ETF flows continue, Bitcoin might never drop below $100,000 again," he stated, calling this potential moment a "structural revaluation" of the cryptocurrency market.

Kendrick's outlook suggests that the combination of geopolitical stability, regulatory clarity, and institutional adoption could push Bitcoin into a new phase — one where the days of five-digit prices are left permanently in the past.

The information provided in this article is for educational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.

Source: CryptoSlate

Major global indices climbed yesterday — many to fresh all-time highs — on news that the US and China are inching closer to a trade deal that would prevent the two countries from imposing triple-digit tariffs on their mutual exports. Today, that optimism continues: talks between President Trump and Japan's new Prime Minister, Sanae Takaichi, reportedly went very well, leading to an agreement on critical minerals trade. Trump praised Japan, calling this the "new golden age" for the US-Japan alliance. It could hardly have gone better.

On the Chinese front, investors are now bracing for a positive outcome as well. Yet fundamentally, the US and Chinese objectives remain difficult to align. The US wants to bring manufacturing back home — which comes at China's expense — while also encouraging Beijing to spend more domestically, something Xi has tried and largely failed to achieve. As two Bloomberg journalists aptly wrote this morning, China's latest five-year plan "appears to show Trump's rebalancing dream to be — as far as Beijing is concerned — a fantasy."

Still, personal rapport between the two leaders could help keep relations as stable as possible under the circumstances. But any trade deal is unlikely to mark an endgame or magically eliminate policy volatility under Trump. Fortunately, markets have acclimated to that since January. The S&P 500 hasn't waited for perfect news to extend its rally to new highs — it's been doing so since June — while Chinese and Hong Kong equities are clawing back past losses, led by tech names.

In Japan, the Nikkei on Monday crossed the 50'000 level for the first time in history, though we're seeing some profit-taking this morning. But overall, the news flow remains supportive of risk-taking: trade deals with the US are lining up, the Federal Reserve (Fed) and the Bank of Canada (BoC) are both expected to cut rates this week, and the Bank of Japan (BoJ) outlook has turned softer under Takaichi.

What could go wrong? Time will tell — but for now, equity investors around the world are enjoying the rally, while safe-haven assets pull back. Gold, for instance, slipped below $4,000 per ounce, in what looks like a healthy correction after its exponential rally. The pullback could deepen by 10–20%, bringing prices back toward $3,400, the key 38.2% Fibonacci retracement of the past two-year surge. Above $3,400, gold's uptrend remains intact, and bulls still have their eyes on $5,000.

Elsewhere in commodities, copper remains volatile but broadly positive, while US crude tested — but failed to clear — its 50-day moving average yesterday despite the trade optimism. Tactical bullish bets placed after last week's sanctions against Rosneft and Lukoil are now being closed. There's speculation the sanctions may prove less severe than initially feared, as Trump likely wants to avoid triggering a price spike. Add to that Saudi Arabia's efforts to expand market share and expectations that OPEC will bring additional barrels to market, and the bears are likely to push for a return below $60 per barrel.

In FX, the US dollar retreated to a one-week low as the Fed began its two-day policy meeting. The central bank is widely expected to deliver a second 25-bp cut this year, amid growing speculation it may also announce an end to quantitative tightening (QT). Some suggest QT could end immediately, arguing that post-pandemic excess liquidity has now been fully absorbed and that the Fed wants to avoid draining it further. If that's the case — if this week's much-expected, fully priced-in rate cut is sweetened by the end of QT — equity bulls will have little reason to reverse the current rally. Short-term yields and the dollar would likely move lower.

Inside equities, AI and tech remain the centre of attention this week. While investors await Big Tech earnings on Wednesday and Thursday, Qualcomm stood out yesterday by announcing plans to launch new AI chips to compete with Nvidia and AMD in the rapidly expanding AI-chip market. Its AI200 and AI250 chips will hit the market next year, with Saudi Humane as its first customer. Nvidia and AMD could've felt queasy on the news — but no: both rose about 2.7–2.8%, as optimism spread that chip appetite keeps growing and there's enough cake for everyone to have a generous slice. Qualcomm, meanwhile, jumped more than 20% intraday and closed the session roughly 11% higher.

In the coming days, we'll find out Big Tech's spending plans, which will directly affect chip-demand forecasts. Together, Amazon, Microsoft, Alphabet, and Meta are expected to have spent over $100 billion in Q3, most of it on chips and data centres. Bubble or not, the money is being spent, the rally is on — and it's not a bubble until it bursts.

Source: ACTIONFOREX

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A Market in Suspense

Source: CNBC

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