Trade tensions between the US and China appear to be easing this morning after President Trump signalled openness to talks. There’s still plenty of turbulence there, however. Sterling remains on edge ahead of UK jobs data and November’s Autumn Statement, while in Europe, President Macron’s political gamble to reappoint Sébastien Lecornu is being closely watched by investors seeking signs of stability.
Along with our usual content below, we’re now bringing you points of view from our very own internal experts. Get essential perspectives from them below.
Current rates
| Currency pair | Rate |
|---|---|
| eur usd | 1.1595 |
| gbp eur | 1.1501 |
| gbp usd | 1.3335 |
Rates correct as of 10:15am on Monday 13 October but may now have changed.
The Big 3
Three stories covering the latest developments in economies, currencies and borders.
Trade tensions ease as Trump opens door to China deal
Global markets steadied after the Trump administration hinted at a possible deal to cool escalating trade tensions with China. President Trump softened his retaliatory stance on the new 100% tariffs he had threatened on Friday, saying both sides want to avoid further economic damage, while Vice President JD Vance urged Beijing to “choose the path of reason.” The comments helped reverse some of Friday’s sharp losses across stocks, oil and crypto, as investors welcomed signs of dialogue. Still, the November tariff deadline looms large, keeping trade uncertainty high.
View from our team:
“Some may see this as an attempt to calm markets, but any relief may be temporary if substantive policy changes don’t follow this action. It could also be feasibly viewed as a negotiation tactic only, or even US recognition that tariffs could be caustic to their own economy. In any case, there are likely to be credibility costs to the flip-flopping stance”.
Sterling under pressure ahead of jobs data and budget risks
Sterling traded cautiously ahead of UK labour market data due Tuesday, with investors wary of weak wage growth and a cooling jobs market. Expectations that Chancellor Rachel Reeves will raise taxes in November’s Autumn Statement are also weighing on sentiment. Retail footfall and spending remain subdued, while the latest surveys show pay growth at its slowest in four years. With consumer confidence low and rate-cut speculation building, the pound’s upside looks limited. Further losses toward 1.3200 can’t be ruled out.
View from our team:
“There are several ‘canary down the mine’ leading factors playing out here. Firstly, markets will be seeking signals that hint at tax or spending policy shifts – which is expected in this Autumn Statement. Labour data will feed directly into the MPC view of inflation and therefore interest rate trajectory, all the while observing gilt/yield spreads – where US yields rise/UK yields fall, the GBP would be under pressure. Finally, any comparative view of the labour data against the US and EU would provide a clear view of the relative economic strength of the UK versus other major central banks”.
Macron bets on stability with reappointed Lecornu
The euro edged higher against the pound as French President Emmanuel Macron reappointed Sébastien Lecornu as prime minister in a bid to restore political stability. Markets welcomed the move after weeks of turmoil, with Lecornu expected to present France’s new budget on Tuesday and rule out snap elections for now. Still, tensions in parliament remain high, and any renewed uncertainty could pressure French assets further. The widening gap between French and German bond yields highlights persistent investor caution toward the euro area’s second-largest economy.
[FXStreet]
View from our team:
“Reinstating Lecornu may do little to steady the ship where political risk premiums are already priced into the EUR. If this reappointment does stick and he is not displaced again, the three downstream aspects to look at would then be: what did this cost the economy/view of government stability, what are the underlying macros as we move forward and will this have any contagion impact on the single bloc?”.
Looking forward
- Monday: China trade data. Annual meetings of the IMF and World Bank begin.
- Tuesday: UK unemployment rate. Fed Chair speech.
- Wednesday: The Fed publishes its beige book. China reports inflation data; India reports trade data.
- Thursday: US retail sales scheduled, pending government reopening. UK GDP MoM
- Friday: Eurozone reports CPI. South Korea reports unemployment.
Here’s what we’re talking to our clients about
We’re always here to support. Here are some of the conversations we’re having:
- The UK labour market state, what that means to interest rates
- How the UK interest rate moves will affect their business
- Is Trump recognising the tariffs finally as being potentially dangerous for the US?
The contents of this article do not constitute financial advice and are provided for general information purposes only. While the content is based on information believed to be accurate at the time of publication, no guarantee is provided