Markets
Stock markets in Europe and the US soared to new record highs. Investors are banking on the US and China nearing a trade agreement, or at least an extension to the truce, after constructive talks last weekend. US president Trump and his Chinese counterpart Xi are expected to seal the deal during their in-person meeting on Thursday. The tech-heavy Nasdaq rallied 1.9%. The EuroStoxx50 had to settle for 0.6%. Core bond yields gapped higher at the open but pared losses going through the session. Net daily changes in the US varied between +0.9 (2-yr) to -4.1 bps (30-yr). The double US auction ($69bn 2-year and $70bn 5-yr) went without any hiccups. German rates finished flat to slightly lower at the very long end of the curve (-1.7 bps). Spreads across the euro area steadied, including in France, where the political atmosphere is growing tenser again. After a delayed vote on a wealth tax last Saturday, the Socialists are threatening to topple the government by the end of the week if there’s no significant tax increase on the wealthier segment in next year’s budget. The French parliament adopted an amendment yesterday that would increase taxes on the country’s largest companies but it’s yet unclear whether it suffices for the Socialist Party. The French topic has become an evergreen and an escalation could soon haunt the euro again. From a daily perspective, though, EUR/USD eked out another be it tiny gain for a fourth day straight. The pair rose to 1.1645. DXY turned south in technical irrelevant trading. The Aussie dollar outperformed global peers.
There’s little overnight news to sustain the risk rally, causing it to fizzle. It also makes sense against the backdrop of important central bank policy meetings from the Fed, ECB and BoJ, Q3 GDP and October inflation numbers in the euro area and five big US companies (accounting for about 25% of the S&P500) due to report earnings over the coming days. The eco calendar today has some interesting elements in store, even though they are most likely of secondary importance to trading. Consumer confidence (Conference Board) is on tap in the US. The Bank Lending Survey and Q3 negotiated wages are to be released for the euro area. Both are closely watched by the ECB but won’t change the expected rates status quo. We expected technical consideration to take over FI and FX trading. The Japanese yen stands out though. A combination of verbal warnings and a constructive meeting between Trump and Takaichi push USD/JPY towards 152. Some were worried ahead of the reunion that Japan’s increased defense spending efforts would have fallen short of US demands.
News & Views
By September 2025 year-to-date (YTD), new EU car registrations increased by 0.9% compared to the same period last year, marking the third consecutive month of growth. Recent momentum has been somewhat driven by the launch of new models, with September alone posting a strong 10% increase. The battery-electric car (BEV) market share held steady at 16.1% YTD (up from +13.1% YTD September 2024). Three of the four largest markets in the EU, accounting for 62% of BEV registrations, saw gains: Germany (+38.3%), Belgium (+12.4%), and the Netherlands (+3.9%). Hybrid-electric vehicles (HEV) remained the most popular power type choice among EU buyers (34.7%, up from 30.1%). The combined market share of petrol and diesel cars fell to 37%, down from 46.8% over the same period in 2024. The preferred power source of new car registrations in Belgium remains petrol (41.9% YTD 2025 vs 42.1% YTD 2024). Together with BEV’s (33.4% YTD 2025 share vs 27% YTD 2024) they account for over 75% of all new registrations.
The British Retail Consortium’s (BRC) shop price monitor showed retail prices falling by 0.3% M/M in October. It’s the first decline since March with both food (-0.4% M/M; largest drop since December 2020) and non-food prices (-0.2% M/M) falling. Lower food prices are important for the hawkish BoE members who warn for the outsized role they have in shaping inflation expectations. Last week’s official CPI numbers also showed lower food price growth (September) than feared. BRC CEO Dickinson highlighted fierce competition amongst retailers, widespread discounting and an easing of global sugar prices which helped to bring down prices of chocolate and confectionary ahead of Halloween. Some retailers already started promotions for electrical goods and beauty products before the Black Friday sales that typically fall in November. On an annual basis, overall retail price growth slowed from 1.4% Y/Y to 1% Y/Y with higher food prices (3.7% Y/Y) more than compensating for lower non-food prices (-0.4% Y/Y).
 due to report earnings over the coming days. The eco calendar today has some interesting elements in store, even though they are most likely of secondary importance to trading.){kind=link}