Where to start?

Daily update

After US President Trump’s threat to impose additional significant tariffs on US buyers of goods from China, there has been a more conciliatory tone from both Trump and US Vice President Vance over the weekend. China’s September trade data showed stronger-than-expected exports (and imports). China’s data earlier this year was hinting at rerouting exports to help US importers avoid high tariffs.
This risk from this episode is less the tariffs, and more the unpredictability of policy. Uncertainty seems to have weighed on US corporate decisions. The positive from this episode is that the administration does seem responsive to market moves.
French President Macron has reappointed last week’s Prime Minister, Lecornu, as this week’s Prime Minister. Lecornu is expected to present a budget on Tuesday. Markets seem to become less sensitive to the drama of French politics, having already included a risk premium in French government bonds.
Japan’s governing coalition has broken up, with the junior partner (Komeito) refusing additional talks with the LDP. The election of Prime Minister-presumptive Takaichi to the role is a little less assured (but still likely). However, this will make passing legislation, including fiscal stimulus, more complicated.