Morning wrap (30.10.2025)

The Trump-Xi Meeting

• The meeting between Trump and Xi was positive and yielded tangible results, as indicated by Donald Trump himself.

• Trump announced the immediate lowering of fentanyl tariffs from 20% to 10%, which will reduce the overall tariff level to 47%.

• Chip issues were considered, and according to arrangements, China is to purchase chips from Nvidia and other companies. However, there was no discussion regarding Blackwell chips.

• All issues concerning rare earth exports have been resolved. Exports to the US are to continue without previous limitations.

• China is to immediately commence soybean purchases, which have been minimal this year and virtually zero since the start of the trade war in April. China also conditionally agreed to sell TikTok.

• Trump indicated that many topics were not discussed, but both sides promised further cooperation to improve trade relations. The issue of Taiwan or the issue of Russian oil purchases were not discussed.

• The agreement is to last one year, after which it is to be extended, possibly on better terms.

• Trump announced a visit to China next April.

• Following Trump's comments on the meeting, Wall Street futures began to gain after an initial negative reaction. Currently, the US500 is up 0.15%, while the US100 is rising by 0.2%.

• The EURUSD is also rebounding after yesterday's sharp declines, gaining 0.25%.

• Gold is attempting to recover from yesterday's pullback, gaining 0.6%. Oil remains unchanged.

• In summary, this is a return to the status quo of recent months, with marginally better terms for China and a potential increase in soybean imports. Nevertheless, trade barriers have not been fully lifted, key chips will not be purchased by China, and oil from Russia can continue to be purchased.

Other Relevant Information

• The Bank of Japan leaves interest rates unchanged, in line with expectations. The BoJ sees moderate growth and potential negative risk factors for growth. At the same time, it points to strengthening inflation around the 2% target. USD/JPY clearly rebounded after the decision to the vicinity of 153.

• Donald Trump announced the resumption of nuclear bomb testing, pointing to similar tests by other countries such as Russia and China. The United States has not tested nuclear weapons since 1992.

• The Fed cut interest rates by 25 basis points yesterday and decided to suspend quantitative tightening from December. Despite the slightly dovish communication, Powell sent a hawkish signal, indicating uncertainty regarding the December meeting. The Fed points to a further cooling of the labour market and emphasizes the need to obtain data before a concrete decision can be made in December.

• After the Wall Street session, the results of American giants were released:

  • Alphabet showed excellent results with revenues above $100 billion and double-digit growth in all key segments. Shares gained up to 7% in after-hours trading.

  • Microsoft beat market expectations but presented lower-than-expected CapEx. The market fears competition and lack of full return on investment.

  • Meta presented lower earnings, related to tax issues. The company also announced huge capital expenditures, and the market doubts their return. Shares fell after the publication in after-hours trading.

• OpenAI expects its IPO to take place in 2027. It is pointed out that this could be the largest IPO in history, worth around $1 trillion.

• Today, the ECB decision awaits, although no surprise is expected. After the session, the results of Amazon and Apple will be released.