Trade Relations - Chinese used cooking oil exports to the US were declining before President Trump's trade war [1] Geopolitics - President Trump designated Chinese used cooking oil exports to the US as a focal point in the trade war with Beijing [1]

JUST IN: 🇺🇸 President Trump accuses China of an "Economically Hostile Act" for not buying soybeansJust as markets were starting to recover 🤷‍♂️ https://t.co/E5v1VuRgLb ...

NEW YORK (Reuters) -The U.S. labor market remained mired in its low-hiring, low-firing doldrums through September, though the economy overall "may be on a somewhat firmer trajectory than expected," Federal Reserve Chair Jerome Powell said on Tuesday. He noted that at policymakers will take a "meeting-by-meeting" approach to any further interest rate cuts as they balance job market weakness with the fact that inflation remains well above their 2% target. Powell also said the end of the central bank's long ...

Trade War Costs - The ongoing trade war primarily impacts exporters, with the US economy also facing inflationary pressures, estimated to rise by 0.6% by mid-2026 due to tariffs [11][23][28] - Global trade growth is projected to slow from 2% in 2025 to 0.6% in 2026, with a mild rebound expected in 2027 [11][24] - The effective US tariff rate is expected to increase to 14% by year-end 2025, affecting various sectors and leading to higher consumer prices [24][27] Stagflation Concerns - Stagflation is becoming a reality, with global GDP growth expected at 2.7% in 2025 and 2.5% in 2026, alongside inflation rates of 3.9% and 3.5% respectively [12][35] - The US is likely to experience prolonged inflation above target levels, with inflation expected to remain around 2.8-3.0% in 2026-2027 [38][39] Central Bank Policies - Central banks face a complex situation of weak growth, high inflation, and rising fiscal deficits, with the Fed expected to cut rates to 3.25%-3.5% by mid-2026 [2][13] - The ECB and BoE are also navigating similar challenges, with the BoE likely to lower rates to 3% by 2027 [2][13] Corporate Financing Strategies - Companies are adapting to high financing costs by optimizing operations, extending debt maturities, and exploring alternative financing sources [3][17] - A rise in global corporate insolvencies is anticipated, with an increase of 6% in 2025 and 4% in 2026 [3][17] Capital Market Outlook - The capital market is not in a bubble, but high valuations are concentrated among a few tech giants, with a projected 15% annual earnings growth [3][18] - Emerging markets like Argentina and Brazil are facing rising imbalances, requiring close monitoring due to potential vulnerabilities [3][19] Political Risks - Political events, including upcoming elections and trade protectionism, pose significant risks to economic stability, with a 45% probability of heightened protectionism impacting growth [3][20] - Geopolitical tensions, particularly involving NATO and Russia, as well as conflicts in the Middle East and between China and Taiwan, could exacerbate economic uncertainties [3][20]

The US stock market upside appears firm despite concerns over a risk of trade war between US and China. The robust earnings growth outlook, increasing demand for AI-powered products and stronger than expected economy is expected toKomal is passionate about finance and the stock market. She enjoys forecasting future market trends using a fundamental and technical approach with a focus on both short- and long-term horizons. She intends to provide unbiased analysis to assist investors in selecting the best inv ...

Market Overview - Stocks on Wall Street experienced a decline, with the S&P 500 falling by 1%, the Dow Jones Industrial Average decreasing by 383 points (0.8%), and the Nasdaq composite dropping by 1.5% [1] - The recent market fluctuations were influenced by trade tensions between the U.S. and China, with Wall Street experiencing its worst day since April followed by its best day since May [2] Trade Relations - The trade conflict between the U.S. and China is highlighted as particularly significant due to both countries being the largest economies globally [4] - China's Commerce Ministry has banned dealings by Chinese companies with five subsidiaries of South Korean shipbuilder Hanwha Ocean, impacting U.S. efforts to rebuild its shipbuilding industry [2] International Market Impact - European and Asian markets also saw declines, while Canada's main stock index, the Toronto Stock Exchange, rose by over 1% [3] Economic Indicators - The U.S. economy has not yet faced major impacts from the shifting tariff policies, but there are concerns about potential retaliatory tariffs affecting consumer costs [6] - The U.S. government shutdown has halted regular economic updates, leading to increased focus on upcoming company earnings and forecasts for economic insights [6] Company Performance - JPMorgan Chase's stock fell by 3.8% despite exceeding profit forecasts, while Wells Fargo's stock rose by 3.5% after beating analysts' expectations [7] - Johnson & Johnson's stock decreased by 1.8% following the announcement of separating its orthopedics business into a standalone entity [7] Treasury Yields - Treasury yields remained stable, with the yield on the 10-year Treasury slightly decreasing to 4.04% from 4.05% [8]

Core Insights - The Cboe Group's VIX index has reached its highest level since early May, indicating increased market volatility and investor uncertainty [1] Group 1 - The rise in the VIX index suggests a heightened demand for options as investors seek to hedge against potential market downturns [1] - This increase in volatility may reflect broader economic concerns or geopolitical tensions affecting market sentiment [1]

Cargo ships are the latest targets in the brewing trade war between China and the US https://t.co/w8NNqxIU0K ...

Report Industry Investment Rating - Not provided in the given content Core Viewpoints - Due to the escalation of US-China tensions, the Asia IG space widened 3-7bps across the board yesterday, with better selling on certain bonds and better buying on others [2] - China's export resilience strengthens its position in the trade war, leading to a revision of the 2025 export growth forecast from 3% to 4.5%, while maintaining the 2025 import growth forecast at 1.5%. The USD/RMB rate may appreciate from 7.13 to 7.1 by year-end and 7.05 by the end of 2026 [4][15][20] - China Water Affairs (CWAHK) proposes to issue a 5NC3 USD senior blue bond, with the FV of the new CWAHK 30 estimated at 6% [8] Summary by Directory Trading Desk Comments - Asia IG space widened 3-7bps due to US-China tension, with better selling on TW lifers, China TMTs, Japanese banks' bonds, and Southeast Asian names. Some bonds like FAEACO 12.814 Perp and NWDEVLs/LIFUNGs/FOSUNI 26 - 29s decreased in price. In Chinese properties, VNKRLE 27 - 29s and FTLNHD 26/FUTLAN 28 were lower, while some SOE property names had better buying. In Southeast Asia, VLLPM 27 - 29s edged up, and VEDLN 28 - 33s/GLPSPs were down. Long - end Yankee AT1s weakened in the morning and recovered slightly [2] - In the LGFV space, activities picked up with new CNH issues, and the space had a stable session with moderate two - way flows [3] - This morning, there were two - way flows on LGFV names. HAOHUAs recovered 3 - 5bps and HYUELEs recovered 5bps in Asia IG space, while NOMURA and Australian long - end Ts2 widened 2 - 3bps. CWAHK 26 had buyers and was 0.1pt higher [4] Marco News Recap - On Monday, S&P (+1.56%), Dow (+1.29%), and Nasdaq (+2.21%) were higher. The US bond market was closed for Columbus Day, and the UST yield was unchanged, with 2/5/10/30 yield at 3.52%/3.65%/4.05%/4.63% [7] Desk Analyst Comments - CWAHK proposes to issue a 5NC3 USD senior blue bond (Ba1/BB+/-), with the FV of the new CWAHK 30 at 6% considering its CWAHK 26 and peers' valuations, adjusted for rating and tenor differential. The issuance size should be capped at its remaining offshore - issuance quota of USD200mn [8] - The net proceeds will be used to repay offshore debt and finance eligible green projects. The new CWAHK 30 will have a CoC put at 101 [10] - CWAHK is a holding company operating mainly through PRC subsidiaries. The new CWAHK 30 will be guaranteed by non - PRC - incorporated subsidiary guarantors [11] - CWAHK is one of the largest water supply companies in China, focusing on water supply and sewage treatment, generating stable cash flow from exclusive concession rights in 58 districts. It serves various end - users with potential coverage of over 30mn people [12] - In FY25, CWAHK generated HKD11.7bn of revenue and HKD3.4bn of operating cash flow, with an estimated free cash flow of HKD40mn. Total debt was HKD25.6bn, and its operating performance weakened, with revenue and EBIT down c9%. Coverage ratios also weakened [13] - CWAHK is listed in Hong Kong, with the chairman and founder owning 27.4%, ORIX Corp and affiliates holding 27.2%, and Great Wall Life Insurance holding 6.0% [14] China Economy - China's export growth beat expectations as exports to Africa, Latin America, and the EU picked up. Exports of integrated circuits and ships remained robust, while personal consumption goods were subdued. Imports rebounded across the board, especially in processing trade. China's rare earth export control is a countermeasure to US semiconductor export restrictions. Trade tensions may intensify in the next two weeks before potentially easing after a possible Trump - Xi meeting [15] - Exports rebounded in September, reaching 8.3% YoY from 4.4% in August, beating market expectations. Exports to the US remained in deep contraction, while shipments to Africa, the EU, and Latin America accelerated. Exports to ASEAN moderated. Since the tariff shocks, exports to ASEAN and Africa have increased significantly, making up for over 120% of the export losses to the US since April. Trade surplus narrowed to US$91bn in September [16] - Integrated circuits and ships had strong growth in September, while personal consumption goods moderated. Low - value - added exports and housing - related products were hit by tariffs. Rare earth exports rebounded despite additional export controls [17] - China's imports increased to 7.4% in September from 1.3% in August, beating market expectations. Imports from the US steadied at - 16%. Import value of processing trade accelerated. For energy products, crude oil import volume rose, while coal and natural gas dropped. Raw material imports had mixed results, and crop imports picked up [18] Offshore Asia New Issues - No offshore Asia new issues were priced today [22] - There are several issuers in the pipeline, including the Macau Branch of Bank of China Limited, Jinan Hi - tech International, and KEB Hana Bank, with different tenors, coupons, and issue ratings [23] News and Market Color - Yesterday, 118 credit bonds were issued onshore with an amount of RMB138bn. Month - to - date, 191 credit bonds were issued with a total amount of RMB212bn, a 19.7% yoy increase [24] - Indonesia plans to shorten the permit process for geothermal projects to three months [24] - Country Garden's top shareholder agrees to a USD1.14bn debt - to - equity swap and will hold scheme meetings on 5 Nov'25 for creditors to vote on its offshore restructuring plan [24] - Freeport Indonesia halts the Gresik smelter due to a mine landslide [24] - China Energy Overseas will redeem GEZHOU 4.15 Perp of USD200mn on 25 Nov'25 [24] - LG Electronics expects a 8.4% yoy drop in 3Q25 operating profit due to higher tariffs [24]

Trade Policy - China has increased its oversight of rare earth magnet exports, escalating to a level of intensity comparable to a trade war in April [1]