Trump–Xi Truce Signals No Further Escalation

• Markets welcomed confirmation from Presidents Trump and Xi of a pause in further trade escalation, giving a lift to global risk sentiment.
• The US will halve fentanyl-related tariffs to 10%, while China will resume soybean and other US agricultural imports and suspend restrictions on rare earth magnets.
• US Treasury yields held steady, maintaining post-FOMC gains, with the 10-year closing near 4.09%, up 1bp, as investors balanced improved trade tone with uncertainty on the Fed’s next move.
• In Australia, markets now see just a 5% chance of a 25bp cut next Tuesday, with only one reduction expected for the rest of this easing cycle, likely mid-2026.
• On the data front, attention turns to September private sector credit and Q3 PPI at 11:30am today.