October 6th, New York Update: Global Markets and Geopolitical Briefing

The Financial Source Podcast

Show Notes — Current Market & News Briefing (Mon, 6 Oct 2025, US Open)

Focus: FX, commodities, trade/tariffs, and geopolitics.
Excluded: Equities, fixed income (unless tied to FX), and crypto.

FX

• JPY: Weaker after LDP elected Sanae Takaichi as leader, signaling near-term fiscal support and patience on BoJ normalization. Advisor guidance implies tolerance for a one-off 25bp hike by Jan if conditions allow, but no cycle. USD/JPY holding near recent highs.
• EUR: Softer on French political risk after PM Sébastien Lecornu resigned; widening OAT-Bund spread weighed on EUR/USD, which slipped below its 50DMA.
• GBP: Down vs USD, firmer vs EUR; light UK data week, focus on late-Nov budget and household-savings revisions narrative.
• AUD/NZD: Softer vs USD; RBNZ decision mid-week with expectations of a lower OCR steering NZD tone.
• USD: Firmer overall on JPY and EUR weakness; US shutdown backdrop unchanged.

Commodities

• Oil: Firmer after OPEC+ signaled a +137k bpd November increase; desks expect realized additions possibly below headline. Aramco and Qatar set November OSPs modestly above benchmarks; house view from one bank sees Brent in a $60–70 range near term.
• Gold: Extended to fresh ATH around $3,950/oz on fiscal and political risk hedging.
• Base Metals: Copper popped early, then faded; longer-term forecasts lifted on prospective deficits later in the decade. Indonesia’s enforcement actions (illegal mining crackdown; tin smelters handed to PT Timah) in focus.
• Aluminium: Trade idea flagged to short Dec-2026 LME aluminium on valuation.

Trade & Tariffs / Industrial Policy

• EU: Advancing an AI strategy aimed at reducing reliance on US/China tech—potential implications for standards and digital trade.
• Japan: Expanding anti-dumping duties to cover indirect exports routed via third countries amid China overcapacity concerns.
• Mexico: President Claudia Sheinbaum touts progress on domestic EVs, semiconductors, satellites, drones; signals confidence in constructive US trade relations.

Geopolitics

• Middle East: Israel–Hamas talks in Egypt slated to begin; US frames hostage-release prospects as the most advanced in a while. No formal ceasefire; Gaza City remains an active combat zone. Possible staged withdrawal line contingent on rapid technical progress.
• Russia–Ukraine: Russia conducted large-scale strikes across Ukraine targeting defense-industrial and energy assets; Kyiv reports infrastructure damage across multiple regions. Moscow warns Tomahawk supplies to Ukraine would further strain US-Russia ties, while welcoming recent US language on nuclear limits as a mild positive.
• Cuba/US: Washington instructs diplomats to lobby against a UN resolution on lifting the embargo, linking Havana to support for Russia’s war.
• Korean Peninsula: North Korea says it’s allocating “strategic assets” in response to US posture; hints at additional military steps.
• China–Europe: FM Wang Yi to visit Italy and Switzerland, keeping China–Europe channels active.
• Indonesia/Tech Platforms: Jakarta lifted TikTok suspension after receiving requested data compliance.
• US–Japan: Leaders’ summit planned for Oct 28, signaling alliance coordination focus.

US Policy Backdrop (Market-Relevant)

• Government Shutdown: Ongoing; administration warns of potential federal layoffs if talks stall.
• Housing Push: White House urging GSEs and big builders to accelerate homebuilding—could feed into growth/inflation expectations.

Looking Ahead

• Central Banks: RBNZ decision mid-week; BoE/ECB speakers on the docket.
• Data/Events: US Employment Trends (Sep); watch for further France political headlines; monitor OPEC+ follow-through and any Israel–Hamas negotiation milestones.