EMEA Morning Briefing: Markets Await Trump-Xi Talks

MARKET WRAPS

Watch For:

Germany GfK consumer climate survey; trading updates for Novartis, AngloAmerican, Capgemini, BNP Paribas, Royal KPN, Valterra Platinum, Deutsche Boerse, Danone, Iberdrola, Airtel Africa

Opening Call:

European stock futures were lower after Asia stocks traded mixed. The dollar weakened and U.S. Treasurys were flat. Gold and oil fell.

Equities:

European equity futures were lower after stocks on Wall Street hit fresh records overnight, marking a significant pickup in momentum after a bumpy stretch in which tariff fears and worries about loan losses at regional banks weighed on major indexes.

Investors are appearing more than happy to take the latest yo-yoing update on trade in stride, analysts said.

"Investors have had no choice but to get comfortable with President Trump's negotiating style and his preference for doing trade deals publicly," said Jed Ellerbroek, portfolio manager at Argent Capital Management.

"You just have to accept that if you're going to own large-cap tech stocks, you're subject to daily surprises."

"There's just a lot of stuff in the 'good' column and not a lot in the 'bad' column," said Ellerbroek.

Forex:

The U.S. dollar was lower, while it's seen to find further support from U.S.-China trade deal hopes, as U.S. President Trump and Chinese President Xi are scheduled to meet on Thursday.

"There's significant anticipation that they will secure a trade deal or a further de-escalation of trade tensions," Commerzbank Research analysts said.

"Officials from both sides have unveiled a number of agreements that all point to an easing in tensions," the analysts added.

Bonds:

Fed officials are almost certain to bring down interest rates by a quarter percentage point this week as traders widely expect, said economists at Barclays.

While last month's meeting showed fairly broad agreement on the committee, with just one dissent from governor Stephen Miran, the October meeting could reveal more division, they projected.

Miran is likely to dissent again in favor of a deeper cut, but some reserve-bank presidents might simultaneously back a pause, Barclays wrote: "We expect hawks to support the cut, but would not be surprised if Schmid or Musalem dissented in favor of an unchanged rate."

Barclays's team said the Fed will likely wait until December to announce an end to balance-sheet reduction, but allows that such a move is possible Wednesday.

Energy:

Oil edged lower in early Asian trade on prospects that U.S. sanctions against Russia's oil giants may be less severe, analysts said, with Société Générale citing several reasons for this view.

One reason is that Russia now conducts most of its transactions in rubles or other "friendly" currencies, members of Société Générale's Commodities Research and Commodity Strategy said in a note.

A second reason is that OPEC has signaled its willingness to increase production if necessary, the members added.

Metals:

Gold was lower and is likely on technical recovery, with front-month Comex gold for October delivery falling 2.8% overnight.

Given the speed of gold's latest selloff, the price might rebound a bit in due course, Capital Economics' John Higgins said in commentary.

"But we think it will ultimately fall further," the chief markets economist said. Some of the factors, such as reserve managers' diversification out of the dollar, which had boosted the gold price, will continue to underpin it in the future, however, these factors may only do so much to support the price, Higgins added.

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Copper prices edged lower, after closing on a record high amid optimism over U.S.-China trade talks.

Prices had rallied on news that trade negotiators have lined up an array of diplomatic wins for Presidents Trump and Xi to unveil at a summit this week, ANZ Research analysts said.

Supply side issues may continue to support as Freeport's Grasberg copper mine remains closed following a deadly landslide earlier this month, they said, adding that the company plans to update the market next month.

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Iron ore was higher amid expectations of lower steel output.

Beijing released a draft of its latest plans to curb steel-making capacity in several key regions, according to ANZ research analysts in a commentary.

Stronger steel prices are boosting the steel market's appetite for iron ore, they said.

TODAY'S TOP HEADLINES

Trump Considers Fed Chair Selection by Year-End From Slate of Five Finalists

President Trump said Monday that he might announce before year-end his pick to succeed Federal Reserve Chair Jerome Powell, whose term expires next May, and is on track to choose from five finalists.

Treasury Secretary Scott Bessent plans to conduct a second round of interviews with the current slate next month, before presenting an even shorter list of nominees to the president to consider.

Trump's Big Tariff Task in Asia Is to Close the Deal

President Trump's quest to reorder global trade through personal diplomacy will be tested during his tour of Asia this week, as he faces the tantalizing prospect of a pact with China and the chance to bust through obstacles to completing deals with other key trading partners.

Trump has won some momentum by winning tariff agreements with a handful of Southeast Asian nations and also sounded an optimistic note on China ahead of a meeting with Chinese leader Xi Jinping planned for later this week. "I think we are going to come away with a deal," Trump said Monday aboard Air Force One en route to Japan.

Gold Prices and Miner Stocks Keep Falling. That's a Surprise.

Newmont was falling again on Monday alongside a sustained pullback in the price of gold. Investors are dumping shares in gold miners following a torrid recent run for the precious metal.

Newmont stock dropped 4% to $79.40 in early trading, having plummeted 6.2% on Friday. Other gold miners were in the red, too: Agnico Eagle Mines fell 2.9%, Barrick Mining slid 2.7%, Wheaton Precious Metals fell 2.5%, and Franco-Nevada was down 2.5%. The S&P 500 gained 0.9%, boosted by hopes of a U.S.-China trade deal.

Porsche Shares Rise as Investors Look Beyond Tough 2025

Porsche shares rose Monday after the German luxury sports-car maker late last week backed full-year guidance and reported third-quarter earnings consistent with last month's profit warning, with analysts believing earnings and sentiment could now be at a trough.

Shares were 4.1% higher in early European trade.

Janus Henderson Gets $7.2 Billion Offer From Trian, General Catalyst

Trian Fund Management and General Catalyst offered to acquire Janus Henderson for about $7.2 billion, claiming the asset manager would operate better as a private company.

Trian already owns 20.4% of Janus Henderson's outstanding ordinary shares and currently has two representatives on the company's board. As of Oct. 27, Janus had 155.98 million shares outstanding.

Amazon to Lay Off Up to 30,000 Corporate Workers

Amazon.com plans to lay off as many as 30,000 employees starting as early as Tuesday, according to people familiar with the matter, the latest cost-cutting move for the tech giant that is seeking to slim down and conserve cash.

The job cuts, which won't all happen this week, would amount to roughly 10% of the online giant's corporate workforce, the people said.

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Expected Major Events for Tuesday

00:01/UK: Oct Shop Price Monitor

07:00/EU: Sep New Passenger Car Registrations in Europe statistics (EU27 + EFTA3)

07:00/SWE: Sep Foreign trade

07:00/GER: Oct GfK consumer climate survey

08:00/SVK: Sep PPI

09:00/ITA: Oct Consumer Confidence Survey

09:00/ITA: Oct Business Confidence Survey

11:00/FRA: 3Q Claimant count and job advertisements collected by France Travail

11:00/IRL: Sep Retail Sales Index

11:00/IRL: 3Q Preliminary GDP Estimate

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(END) Dow Jones Newswires

October 28, 2025 01:14 ET (05:14 GMT)