US yields climb as China trade, bank worries ebb

NEW YORK – US Treasury yields rose on Friday as concerns about rising trade tensions with China and the credit quality in regional banks waned, but the yield on the benchmark 10-year note was still poised for a third straight week of declines.

Yields have steadily retreated since last Friday, when US President Donald Trump threatened to raise tariffs on Chinese goods to triple digits, followed this week by both countries charging additional port fees on ocean shipping firms and by US officials criticising China’s expanded rare earth export controls.

On Thursday, additional concerns regarding regional banks and the credit market further dented risk appetite after Zions Bancorporation said it would take a charge-off on two commercial and industrial loans. That came on the heels of bankruptcies by auto parts maker First Brands and subprime lender Tricolor.

But fears over trade tensions appeared to be allayed somewhat after Trump said his proposed tariff on goods from China would not be sustainable and confirmed he would meet with Chinese President Xi Jinping in two weeks in South Korea despite raising doubts last week that the meeting would happen.

In addition, concerns over contagion among the regional banks eased after solid earnings from several names in the sector. The KBW regional bank index rallied more than 1%, taking pressure off the broader equities market.

Rob Haworth, senior investment strategist at US Bank Wealth Management in Seattle, said risk appetite had already diminished with the possibility that trade tensions between China and the US could escalate, and was dampened further as worries mounted over regional banks.

“The market is walking some of that back and trying to evaluate how serious this credit fear may really be – is it a one-off? Is it more persistent? And so I think the market’s evaluating that along with the China issue, and we’ve got another couple of weeks of that,” he said.

The yield on the US 10-year Treasury note was 2.3 basis points higher at 3.999% after hitting a 6-1/2 month low of 3.936% earlier in the session. It is down 5 basis points on the week and nearly 19 basis points during its three-week decline.

The yield on the 30-year bond gained 1.6 basis points to 4.599%.

Yields have also been moving lower as recent comments from Fed officials have cemented expectations for a rate cut by the central bank at its upcoming policy meeting at the end of the month.

The two-year US Treasury yield, which typically moves in step with interest rate expectations, was up 3.1 basis points at 3.457% after earlier falling to 3.376%, its lowest since August 26, 2022. But the yield was down more than 6 basis points on the week and on pace for a third straight weekly fall.

Federal Reserve Bank of St. Louis President Alberto Musalem suggested Friday he will support a central bank interest rate cut at the end of the month, while warning it is important for the Fed not to go too far with easing the cost of credit amid still unsettled inflation risks.

Markets have fully priced in a rate cut of at least 25 basis points at the Fed’s October meeting and a 1% chance for an outsized 50 basis point cut, according to CME’s FedWatch Tool.

A closely watched part of the US Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at a positive 54 basis points.

The breakeven rate on five-year US Treasury Inflation-Protected Securities (TIPS) was last at 2.322% after closing at 2.318% on Thursday, its lowest since June 30.

The 10-year TIPS breakeven rate was last at 2.273%, indicating the market sees inflation averaging about 2.3% a year for the next decade.

(Reporting by Chuck Mikolajczak; Editing by Kirsten Donovan and Edmund Klamann)

Global equity funds draw fourth weekly inflow on hopes of Fed rate cut

Global equity funds attracted inflows for a fourth straight week through October 15, as dovish comments from U.S. Federal Reserve Chair Jerome Powell reinforced expectations that the central bank will cut interest rates at its meeting later this month.

Investor appetite, however, remained cautious amid renewed U.S.-China trade tensions after President Donald Trump indicated he may scale back certain trade ties with Beijing.

Investors bought a net USD 2.17 billion worth of global equity funds during the week in line with nearly USD 2 billion weekly net purchase the prior week, LSEG Lipper data showed.

The U.S. and Asian equity funds saw nearly USD 1 billion inflows each, while European funds had a net USD 1.62 billion weekly outflow, which ended a 10-week-long trend of net purchases.

Equity sectoral funds, meanwhile, saw an uptick in demand as they received USD 6.61 billion, nearly a 50% rise from the previous week’s USD 4.39 billion net purchases.

Tech and healthcare sectors led the sectoral net investments as they received about USD 1.91 billion and USD 1.38 billion, respectively in weekly inflows.

Inflows into global bond funds, meanwhile, eased to a 16-week low as investors poured just USD 7.97 billion into these funds.

Demand for government bond funds, however, jumped to the highest in five months with a net USD 3.22 billion in weekly inflows. Investors also bought short-term bond funds of USD 2 billion but shed a net USD 1.08 billion worth of loan participation funds.

Investors, meanwhile, divested USD 6.72 billion worth of money market funds, partly liquidating the prior week’s USD 64.46 billion net investments.

Gold and precious metals commodity funds drew USD 2.83 billion, the 20th weekly inflow in 21 weeks.

In emerging markets, investors ended their eight-week-long buying streak with a net USD 1.04 billion weekly divestment. Bond funds, meanwhile, saw a net USD 2.38 billion weekly inflow, data for a combined 29,687 funds showed.

(Reporting by Gaurav Dogra; Editing by Arun Koyyur)

Dollar set for weekly loss amid investor unease about trade

NEW YORK/LONDON – The US dollar was headed for a weekly loss against the Swiss franc and yen on Friday, amid concern about trade tensions and unease among some regional American banks.

The US federal government shutdown has also choked off the release of key macroeconomic data, leaving investors with less certainty than usual about what is happening in the economy.

US President Donald Trump said his proposed 100% tariff on goods from China would not be sustainable, but blamed Beijing for the latest impasse in trade talks that began with Chinese authorities tightening control over rare earth exports.

Trump also confirmed he would meet with Chinese President Xi Jinping in two weeks in South Korea in an attempt to ease trade tensions.

“There’s a bit of safe-haven selling of the dollar,” said Steve Englander, Standard Chartered’s global head of G10 FX research. “I think there’s the news on China, which has been partly but not fully walked back, and the news on regional banks and credit more broadly are sort of hurting the dollar.”

The US dollar fell to its weakest level against the Swiss franc in a month, while the yen erased earlier gains following Bank of Japan Governor Kazuo Ueda’s discussion of factors that could lead to a rate increase this month.

The dollar fell 0.08% to 0.7925 against the Swiss franc, dropping to its lowest level since mid-September and was set for the biggest weekly loss since June.

“The market is responding to a week where we are now 17 days into a US government shutdown and we’re missing initial claims and the jobs data – we are flying with limited visibility and the Fed also feels like that,” said Amo Sahota, director at Klarity FX in San Francisco.

“And then we had the trade tension that escalated, although Trump did try to calm things down . . . I believe this is all game theory and negotiating tactics,” Sahota added.

Fed Governor Christopher Waller said he is on board for another interest rate cut at the US central bank’s meeting later this month because of the mixed readings on the state of the job market.

The euro was down 0.17% at USD 1.16678. It was on course for its biggest weekly gain against the dollar in nine weeks.

The dollar index, which tracks the US currency against six of its counterparts, headed for a 0.43% slide this week, although it was up 0.17% on the day to 98.43.

Japan’s lower house scheduling committee board has agreed to hold a parliamentary vote to select the next prime minister on October 21.

The yen has been on the defensive since fiscal dove Sanae Takaichi was elected to head Japan’s ruling Liberal Democratic Party this month. But a vote to install her as prime minister was delayed after a split with the LDP’s coalition partner.

Against the Japanese yen, the US dollar was flat at 150.49, on track to notch a weekly loss.

Meanwhile, BOJ Governor Ueda said in Washington on Thursday that the central bank remains ready to increase its key policy rate if the likelihood of its growth and price forecasts materializing increases.

Sterling was down 0.02% at USD 1.3433, heading for a weekly gain.

(Reporting by Chibuike Oguh in New York; Additional reporting by Rocky Swift in Tokyo; Editing by Shri Navaratnam, Kim Coghill, Timothy Heritage, and Deepa Babington)

Oil set for weekly loss as Trump-Putin summit looms

Oil prices edged lower in early trade on Friday, heading for a weekly loss, with uncertainty over global energy supplies after US President Donald Trump and Russian President Vladimir Putin agreed to meet in Hungary to discuss ending the war in Ukraine.

Brent crude futures fell 8 cents, or 0.13%, lower at USD 60.98 a barrel at 0030 GMT, while US West Texas Intermediate futures were down 9 cents, or 0.16%, at USD 57.37.

On a weekly basis, both benchmarks were down nearly 3%, partly due to the International Energy Agency’s outlook for a growing supply glut in 2026.

Trump and Putin agreed on Thursday to another summit on the war in Ukraine, a surprise move that came as Moscow feared fresh US military support for Kyiv. The meeting may be held within the next two weeks in Budapest.

The development came as Ukrainian President Volodymyr Zelenskiy was headed to the White House on Friday to push for more military support, including US-made long-range Tomahawk missiles, while Washington pressured India and China to stop buying Russian oil.

“Concerns of tighter supplies were eased after it was announced that Trump would be meeting with Putin to discuss ending the war in Ukraine,” Daniel Hynes, an analyst at ANZ, said in a note.

Also weighing on prices, the Energy Information Administration said on Thursday US crude inventories increased by 3.5 million barrels to 423.8 million barrels last week, compared with analysts’ expectations in a Reuters poll for a 288,000-barrel rise.

The bigger-than-expected build in crude inventory was largely due to lower refining utilization as refineries go into fall turnarounds.

The data also showed a rise in US production to 13.636 million barrels per day, the highest on record.

In the previous session, Brent settled 1.37% lower, and US WTI closed down 1.39%, their lowest since May 5.

(Reporting by Nicole Jao in New York; Editing by Sonali Paul)

US yields little changed as investors eye trade, weigh Fed comments

NEW YORK – US 10-year Treasury yields were little changed on the session, bouncing off earlier lows as investors awaited developments on the trade situation between the US and China and digested comments from several Federal Reserve officials.

Yields have moved sharply lower since Friday, when US President Donald Trump threatened to raise tariffs on Chinese goods to triple digits, followed this week by both countries charging additional port fees on ocean shipping firms and criticism by US officials of China’s expanded rare earth export controls.

Investors have also been grappling with a lack of economic data due to the ongoing government shutdown.

“Until last Friday, the market seemed to have moved on from trading the potential fallout from the trade war and did instead prefer to focus on the implications from the government shutdown, but now I think that’s what the market’s reacting more to is the escalation in the trade war once again when that wasn’t expected,” said JoAnne Bianco, partner and senior investment strategist at BondBloxx Investment Management in Chicago.

The yield on the benchmark US 10-year Treasury note fell 0.1 basis point to 4.044% after hitting a session low of 4.009%.

Yields pared declines after Federal Reserve Governor Christopher Waller said he would like a 25 basis point cut at the central bank’s October meeting due to the mixed labor market readings but sees a slower path of cuts should the job market speed up or GDP holds up.

Markets are currently pricing in a 95.7% chance for a 25 basis point cut at the Fed meeting later this month, according to CME’s FedWatch Tool.

“The movement that we’ve seen in Treasury yields has certainly factored in a couple more rate cuts,” said Bianco.

The yield on the 30-year bond shed 0.2 basis point to 4.637%.

Despite the government shutdown, some economic data was still being released. The Philadelphia Federal Reserve Bank said its business activity index dropped to -12.8 this month from 23.2 in September and below the 8.5 estimate of economists polled by Reuters. A reading below zero indicated contraction.

In addition, The National Association of Home Builders/Wells Fargo Housing Market index showed homebuilder sentiment jumped to a six-month high in October amid hopes that declining mortgage rates would stimulate demand for housing.

The two-year US Treasury yield, which typically moves in step with interest rate expectations for the Fed, edged up 0.4 basis points to 3.51% after falling to 3.483% on the session.

Aside from Waller, Richmond Fed president Thomas Barkin said consumers continue to spend given low unemployment and wage gains, but are more constrained than during the pandemic years while Fed Governor Stephen Miran said that cuts of 25 basis points are too slow of a pace.

The breakeven rate on five-year US Treasury Inflation-Protected Securities (TIPS) was last at 2.353% after closing at 2.351% on Wednesday, its lowest since July 2.

The 10-year TIPS breakeven rate was last at 2.302%, indicating the market sees inflation averaging about 2.3% a year for the next decade.

(Reporting by Chuck Mikolajczak, Editing by Nick Zieminski)

Safe-haven surge, Fed rate-cut bets drive gold beyond USD 4,300/oz

Gold hit a record high for the fourth straight session on Thursday and soared past USD 4,300 an ounce as investors flocked to the safe-haven metal on brewing US-China trade tensions and the US government shutdown, with rate cut bets fueling the momentum.

Spot gold was up 2.6% at USD 4,316.99 per ounce as of 4:07 p.m. ET (2007 GMT) after bullion touched a record high of USD 4,318.75 earlier.

US gold futures for December delivery settled 2.5% higher at USD 4,304.60, after touching a record high of USD 4,335/oz.

The yellow metal has gained over 60% year-to-date, driven by geopolitical tensions, aggressive rate-cut bets, central bank buying, de-dollarization, and robust ETF inflows.

“Gold’s trajectory will hinge on the rate-cut picture heading into 2026 as well as the developments around US-China. If no deal is reached between the US and China and the relationship continues to deteriorate, that could be the spark gold needs to cross the USD 5,000/oz barrier,” said Zain Vawda, analyst at MarketPulse by OANDA.

Investors this week have stayed focused on the simmering US-China trade spat, with Washington on Wednesday criticizing China’s expanded rare earth export controls as a threat to global supply chains.

Meanwhile, Donald Trump said he and Russian President Vladimir Putin agreed on Thursday to another summit to discuss ending the war in Ukraine, one day before the US president was due to speak with Ukrainian leader Volodymyr Zelenskiy.

Traders are pricing in a 25 basis-point US Federal Reserve rate cut in October, and another in December, with probabilities of 98% and 95%, respectively.

Non-yielding gold typically performs well in a low-interest-rate environment.

Short-term pullbacks in gold are likely to be temporary, as bullish investors tend to use dips to re-enter positions, Vawda said.

HSBC raised its 2025 average gold price forecast to USD 3,355 an ounce on Wednesday, citing safe-haven demand from geopolitical tensions, economic uncertainty, and a weaker US dollar.

Meanwhile, the ongoing US government shutdown has halted scheduled economic data, with a Treasury official warning it could cost the economy up to USD 15 billion a week in lost output.

Spot silver rose 1.8% to USD 54.04 per ounce, after hitting a record high of USD 54.15 earlier in the session, tracking gold’s rally and supported by tightness in the spot market.

Platinum rose 3.2% to USD 1,706.65 and palladium climbed 4.6% to USD 1,606.00.

(Reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Vijay Kishore and Shailesh Kuber)

Dollar soft as Sino-US trade tension weighs

SINGAPORE – The US dollar slipped on Thursday as the Sino-US trade war sapped investor sentiment, while growing confidence of the US Federal Reserve cutting its policy interest rate this year also weighed on the greenback.

The euro rose 0.14% to USD 1.1664 in early trade, hitting a one-week high. The yen also firmed to a one-week high of 150.52 per dollar.

The dollar index, which measures the greenback against six other currencies, was down 0.16% at 98.512, headed for a weekly decline of 0.33%.

Investor focus has been on the trade spat between the world’s biggest economies, with US officials blasting China’s expansion of rare earth export controls as a threat to global supply chains.

China’s commerce ministry defended the controls, pointing to US measures on Chinese goods and companies and calling US criticism hypocritical.

TRUMP-XI MEETING

Amid the tit-for-tat action, US President Donald Trump still expects to meet Chinese President Xi Jinping in South Korea this month, US Treasury Secretary Scott Bessent said.

Vasu Menon, managing director of investment strategy at OCBC, noted the latest trade measures take effect in November after Trump and Xi meet.

“If the meeting goes ahead, some of last week’s measures could be toned down or even unwound and presented as successful deliverables.”

The sides have maintained lower tariffs and continued rare earth flows under a six-month trade truce that has been repeatedly extended for 90-day periods. Bessent has suggested a longer extension was possible.

“An extension, rather than a grand bargain that settles all trade issues, is probably the most realistic second-best outcome compared to the alternative of escalation of retaliation,” said Joseph Capurso, head of foreign exchange at Commonwealth Bank of Australia.

The Australian dollar slipped 0.4% to USD 0.6485 after data showed unemployment hit a near four-year high in September, adding to the case for interest rate cuts.

The Aussie, often considered a proxy for risk appetite, has been volatile this week due to the trade tension as traditional havens including the Swiss franc gained. The franc was last firmer at 0.7952 per US dollar.

FED CUT WAGERS

With the US government shutdown entering third week, investors have focused on policymakers’ comments for a sense of the Fed’s near-term path.

Traders have priced in 48 basis points of easing this year, indicating increasing confidence for cuts at the Fed’s two remaining policy meetings this year.

US economic activity was little changed and employment largely stable in recent weeks, the Fed said on Wednesday, though there were signs of labour market weakness and a slight pullback in spending.

Meanwhile, attention will also be on Japanese political developments after parliament failed to set a date for its vote on a new prime minister.

The ruling Liberal Democratic Party chose Sanae Takaichi as its chief this month but her path to becoming Japan’s first female prime minister has become trickier after the Komeito party chose to end their coalition last week.

The uncertainty could be an overhang for the yen though external factors have aided flows to such havens, analysts said.

“The cost of becoming prime minister is likely to be looser budget settings,” CBA’s Capurso said. “There is unlikely to be much, if any, political support for policy tightening by the Bank of Japan.”

(Reporting by Ankur Banerjee in Singapore; Editing by Christopher Cushing)

Oil prices up 1% after Trump says India promised to stop buying Russian oil

TOKYO – Oil prices rose by around 1% in early trade on Thursday after US President Donald Trump said Indian Prime Minister Narendra Modi had pledged his country would stop buying oil from Russia, which supplies about one-third of its imports.

Brent crude futures rose 57 cents, or 0.9%, to USD 62.48 a barrel at 0046 GMT. US West Texas Intermediate (WTI) futures CLc1 also added 0.9%, or 54 cents, to trade at USD 58.81.

Both contracts touched their lowest since early May in the previous session on US-China trade tensions and after the International Energy Agency warned of a big surplus next year as OPEC+ producers and rivals lift output amid weak demand.

Trump said on Wednesday that India would halt oil purchases from its top supplier Russia, and the US would next try to get China to do the same as Washington intensifies efforts to cut off Moscow’s energy revenues and pressure it to negotiate a peace deal in Ukraine.

India and China are the two top buyers of Russian seaborne crude exports, which are sanctioned by the US and European Union. For months, Modi resisted US pressure to stop buying Russian oil, with Indian officials defending the purchases as vital to national energy security.

“At the margin, this is a positive development for the crude oil price as it would remove a big buyer (India) of Russian oil,” said Tony Sycamore, a market analyst at IG.

Later on Thursday, investors will be watching for the weekly US inventory statistics release from the US Energy Information Administration (EIA) after mixed data from the American Petroleum Institute (API) trade group.

US crude and gasoline stocks rose while distillate inventories fell last week, market sources said, citing API figures on Wednesday.

Crude stocks rose by 7.36 million barrels in the week ended October 10 and gasoline inventories increased by 2.99 million barrels, while distillate inventories fell by 4.79 million barrels from a week earlier, the sources said.

While lower distillate inventories point to stronger demand for diesel, a buildup in crude oil and gasoline stocks suggests demand in the US, the world’s top oil consumer, remains sluggish.

Analysts forecast that US crude stockpiles rose by about 0.3 million barrels last week.

(Reporting by Katya Golubkova in Tokyo; Editing by Jacqueline Wong and Jamie Freed)

Gold extends record run past USD 4,200 on rate-cut hopes, safe-haven fervor

Gold prices breached USD 4,200 per ounce for the first time on Wednesday, extending a record rally as rising interest rate cut bets and geopolitical jitters send investors flocking to the safe-haven metal.

Spot gold rose 1.3% to USD 4,195.35 per ounce as of 1:57 p.m. ET (1757 GMT), after hitting an all-time high of USD 4,217.95 earlier.

US gold futures for December delivery settled up 0.9% to USD 4,201.60.

“The metal has been on a tear, and it doesn’t look like it wants to stop … With US-China trade tensions being reignited in the last few days, investors have even more reason to hedge their long equity bets by diversifying into gold,” said Fawad Razaqzada, market analyst at City Index and FOREX.com.

Gold has surged over 60% this year, driven by a confluence of factors including geopolitical tensions, rate-cut bets, central bank buying, de-dollarisation and strong ETF inflows.

“With the USD 5,000 handle now just USD 800 away, I wouldn’t bet against gold getting there eventually,” Razaqzada said, adding that a short-term correction is likely to shake out weaker hands and attract fresh dip buyers.

The dollar slipped against a basket of peers after Federal Reserve Chair Jerome Powell struck a dovish tone on Tuesday, saying the US labour market remained mired in “low-hiring, low-firing doldrums.”

Gold is considered a traditional hedge against uncertainty and inflation, and also thrives in low-rate environments as it is a non-yielding asset.

Traders are pricing in a 25-basis-point rate cut in October, with a 98% probability, followed by another cut in December, which is fully priced in at 100%.

Adding to the safe-haven bid, US President Donald Trump said Washington was considering cutting some trade ties with China after both sides imposed tit-for-tat port fees this week.

Markets are also watching the US government shutdown, which has halted official data and may cloud policymakers’ outlook abroad.

Silver climbed 2.3% to USD 52.64, following Tuesday’s record high of USD 53.60.

Silver’s surge is driven by a tight London supply, marked by extreme backwardation and record lease rates, but it could reverse quickly if shortages ease, said Michael Brown, senior strategist at Pepperstone.

Elsewhere, platinum climbed 0.6% to USD 1,647.55, while palladium fell 0.2% to USD 1,523.66.

(Reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Mrigank Dhaniwala, Alan Barona, and Shreya Biswas)

Oil settles higher as US, China try to de-escalate trade tensions

NEW YORK – Oil prices rose on Monday after assurances that US President Donald Trump will meet his Chinese counterpart Xi Jinping later in October, easing a flare-up in trade tensions between the world’s top two economies that had pushed crude benchmarks to five-month lows on Friday.

Brent crude futures settled 59 cents higher, or 0.9%, at USD 63.32 a barrel, and US West Texas Intermediate crude futures also closed up 59 cents, or 1%, at USD 59.49 a barrel.

Both contracts fell around 4% on Friday to settle at their lowest since May, after Trump threatened to cancel the meeting with Xi and to impose steep new tariffs on imports from China.

However, US Treasury Scott Bessent said on Monday that the meeting between the US and Chinese leaders remains on track to be held in South Korea in late October, and noted substantial communications between the two sides over the weekend.

“We have substantially de-escalated,” Bessent said in an interview with Fox Business Network.

The selloff in markets now looked to be capped by Washington and Beijing’s willingness to negotiate, DBS analyst Suvro Sarkar said, adding the near-term outlook hinged on the eventual outcome of the trade talks.

Oil prices tumbled in March and April at the height of trade tensions between the two countries.

“Any reduction in international trade can only be bearish for oil,” PVM energy analysts said in a note to clients.

On the demand side, China’s crude imports in September rose 3.9% from a year earlier to 11.5 million barrels per day, customs data showed.

Meanwhile, the Organization of the Petroleum Exporting Countries kept its relatively high global oil demand growth forecasts unchanged for this year and next.

In a monthly report on Monday, OPEC implied that the oil market will see a much smaller supply deficit in 2026 as the wider OPEC+ group pushes ahead with output increases.

Meanwhile, prospects of peace in the Middle East limited gains in oil prices. Palestinian militant group Hamas freed the last 20 surviving Israeli hostages on Monday under a US-brokered ceasefire deal.

Trump proclaimed the “historic dawn of a new Middle East” after two years of war in Gaza. Still, traders want to see the peace hold before factoring it into their bets on oil prices, PVM analysts noted.

“(Oil) market has been skeptical by voting with price as to any bullish influence on the recent outbreak of violence, it likewise too will wait for proof of a ceasefire that holds for more than just a couple of days,” the PVM analysts said.

(Reporting by Shariq Khan, Enes Tunagur, Ahmad Ghaddar, and Florence Tan; Editing by Susan Fenton, Bernadette Baum, Frances Kerry, and David Gregorio)

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