Market Commentary: Tuesday 21st October

U.S. President Trump has signed a deal with Australian Prime Minister Albanese to boost America’s access to rare earth metals and other critical minerals. Rare earths have been a key flashpoint in U.S.–China trade tensions, with China dominating the supply chain and imposing export curbs on these materials. U.S.–China trade negotiations continue, and market optimism has picked up following Trump’s prediction of a “really good trade deal” with Beijing.

Sanae Takaichi has won the parliamentary vote to become Japan’s Prime Minister, with the Nikkei 225 edging toward 50,000 overnight. Takaichi has promised cash handouts and tax cuts, adding selling pressure to long-term JGBs, as investors expect future generations to bear the cost of her fiscal policies. 30-year JGB yields have reached record highs.

On the economic calendar today, data releases are light. The main focus will be on U.S. earnings — with reports due from Netflix, General Electric, and Coca-Cola. U.S. September CPI, originally scheduled for 15 October, is now expected to be released this Friday due to the government shutdown, ahead of the Fed’s next meeting on 30 October.

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