Morning wrap (30.09.2025)

Indices on Wall Street closed with gains yesterday, but the rally was significantly pared back by the session's end. Futures are posting marginal gains today: the US500 is up 0.02%, and the US100 gains 0.05% two hours before the European market open.

Most Asian markets are seeing declines just ahead of China's week-long holidays. CHN.cash slips 0.05%, while Japan's Nikkei 225 is marginally in the red compared to yesterday's close.

Gold continues its advance and is trading at $3,866 per ounce, representing a nearly 11% price increase this month.

EUR/USD somewhat limited its gains from yesterday but is minimally continuing its northward movement today.

The latest reports indicate a lack of progress in talks between Trump and Congressional leaders, suggesting a high probability of a government shutdown today after midnight in the US. Vice President Vance indicates that all parties should prepare for the shutdown.

The RBA (Reserve Bank of Australia) maintained interest rates unchanged at 3.6%, which was in line with expectations.

The RBA cited higher inflationary risks, favourable economic conditions, and a tight labour market. Simultaneously, it indicated that most negative effects related to tariffs would likely be avoided.

The Bank of Japan Minutes reveal a significant disparity between "hawks" and "doves." Some BoJ members favour returning to rate hikes and reaching the neutral rate, while others still see risks concerning the economy and a lack of inflationary pressure. USD/JPY remains stable but returns to marginal weakness, extending yesterday’s declines.

China's Official Manufacturing PMI came in at 49.8, slightly better than the expected 49.6 and the previous level of 49.4. However, the Services PMI was weaker at 50.0, missing the forecast of 50.3 (which matched the previous reading). This index primarily covers larger state-owned enterprises.

The private index from RatingDog was significantly better, reading 51.2 against an expectation of 50.3 and a previous level of 50.5. This private index focuses on smaller firms but is often considered a broader barometer.

Citi is the latest bank to cut its oil price forecast, targeting $63 per barrel for Brent in 2026. Citi anticipates further production increases from OPEC+ and a full reversal of pandemic-era cuts. At the same time, deeper declines will be limited by inventory rebuilding in China and the OECD.

Goldman Sachs, in light of recent OPEC+ rumours about another production hike in November, indicates a price as low as $55 per barrel for Brent next year.

Crude oil continues yesterday's massive decline. The price fall yesterday was nearly 3%, the steepest since September 3.

Donald Trump is moving to impose new tariffs related to wood products. Finished wooden products, such as furniture, will be subject to a 25% tariff, while raw timber and planks will face a 10% levy. Europe and Japan will have a tariff cap of 15%.

According to the China Securities Journal, the People's Bank of China (PBOC) will opt for an interest rate cut in Q4 and utilize other tools to maintain high market liquidity. Simultaneously, market support for the Yuan is expected.

The Wall Street Journal reports that Boeing is working on developing a new aircraft model to replace the 737 MAX.

A busy schedule of important macroeconomic data is expected from Europe today, including German retail sales, German labour market data, French inflation, and ultimately, German inflation in the early afternoon.

It is important to note that today marks the quarter-end, so market volatility may potentially be elevated.