October 2nd, London Update: Global Markets and Geopolitical Briefing

The Financial Source Podcast

Show Notes — FX, Commodities, Trade & Geopolitics Briefing

Today’s setup

• U.S. government shutdown continues; Fitch says no near-term rating impact, while S&P estimates a 0.1–0.2pp hit to GDP per week. Data visibility reduced with several releases delayed.

FX

• Dollar Index rangebound as markets gauge shutdown duration and lost data signals; euro holds above 1.17, sterling consolidates between key moving averages.
• USD/JPY choppy around high-147s after mixed BoJ Tankan; safe-haven bid vs. cautious BoJ tone keeps direction uncertain.
• AUD/NZD subdued with China on holiday; a BoK official flagged tariff impacts on exports likely to show more clearly next year.

Commodities

• Oil: Benchmarks stabilize after a midweek slide; Saudi Aramco cut LPG benchmarks to the lowest since Aug-2023, highlighting product pricing pressure. OPEC Secretariat previously rejected talk of a coordinated 500kbpd hike.
• Gold: Near record highs amid shutdown uncertainty and softer USD; a major bank reiterated high-conviction upside into 2026.
• Metals: Copper holds above USD 10k/t despite China’s Golden Week; attention on supply risk in Chile/Indonesia. Glencore’s Lomas Bayas says mining ops continue as a localized fire is addressed.

Trade & Tariffs

• White House pauses new pharmaceutical tariffs while negotiating price cuts with drugmakers after signaling triple-digit import rates; further company agreements expected.
• U.S. says soybean purchases by China are being held back for negotiating leverage; tariff receipts to support farmers. A Trump–Xi meeting in ~4 weeks is being prepared with agriculture high on the agenda.
• G7 underscores using tariffs and import/export bans to curb Russian revenue.

Geopolitics

• Russia–Ukraine: U.S. to provide intelligence for Ukrainian long-range strikes inside Russia; IAEA working to restore off-site power at the Zaporizhzhia nuclear plant amid critical conditions reported by Kyiv.
• Maritime security: Yemen’s Houthis claim a cruise-missile strike on the Dutch-flagged Minervagracht, keeping Red Sea/Arabian Sea risk in focus.
• Iran: Military messaging signals potential expansion of missile range if European pressure increases.

What to watch next

• Data: Swiss CPI, Eurozone unemployment, U.S. Challenger layoffs (while Weekly Claims and other U.S. reports remain delayed).
• Speakers: BoJ’s Uchida, Fed’s Logan, ECB’s de Guindos, BoC’s Mendes.
• Shutdown timeline and any guidance on rescheduling U.S. labor data.