Morning Bid: Trade deal hope spurs risk rally

Core Insights - The potential U.S.-China trade deal, perceived more as a truce extension, has led to a rally in stock markets, impacting gold prices and boosting commodity prices like copper [1][2]. Market Reactions - U.S. and Chinese officials have outlined a framework for a trade deal, which may lead to a pause in U.S. tariffs on Chinese goods and Chinese export controls on rare earths, easing investor concerns [2]. - Stock markets in Japan, Taiwan, and South Korea have reached record highs, with gains of around 2%, while Chinese stocks increased by 0.86% and Nasdaq futures rose by 1% [3]. Economic Indicators - The U.S. Federal Reserve is expected to lower its policy interest rate by 25 basis points, with market focus shifting to future economic cues amid a government shutdown [4]. - The European Central Bank is anticipated to maintain its policy rate, directing investor attention to the ongoing earnings season, particularly for mega-cap companies [4]. Key Developments - Upcoming key developments include the Ifo German business sentiment data for October, which could influence market sentiment [5].