28 Oct 2025
This report provides an update on global market conditions, highlighting the start of new US-China trade negotiations aimed at de-escalating economic tensions. It also details the ongoing US government shutdown, challenges facing Congress, and the selection process for the next Federal Reserve chair.
A new round of negotiations has begun between the United States and China to reduce bilateral tensions ahead of a potential Trump-Xi Jinping meeting. These discussions, which started in Kuala Lumpur, aim to de-escalate the economic deadlock between the two major global economies. Key topics include rare earth elements, soybean purchases, China's acquisition of Russian oil, and tariffs, with the overarching goal of reducing aggressive actions. Lifeng, a close associate of Xi Jinping, is tasked with achieving common ground, though expectations for an immediate agreement remain low, as President Trump demands concessions such as renewed US soybean purchases, cooperation against fentanyl trafficking, and eased restrictions on rare earth exports. The current US-China trade ceasefire is set to expire on November 10th, and unresolved issues could sustain tensions, making this week's outcomes crucial for market stability and investor sentiment.
The US government shutdown has entered its 28th day, presenting significant challenges for the House Speaker, including controlling members within his own party. An Arizona Democrat, who won a recent midterm election, is delaying her oath-taking and has formally complained to Congress, potentially setting a record for the longest wait for an official position. No agreement has been reached between Democrats and Republicans due to substantial policy differences, with neither party willing to compromise. Recent Reuters polling indicates that 50% of Americans hold congressional Republicans responsible for the shutdown, while 43% blame Democrats, despite the Trump administration consistently labeling it a 'Democrat shutdown.' Public trust in the US government has plummeted to historical lows, and traditional legislative tactics are failing to pass budget bills, leaving the duration of the shutdown uncertain. Thousands of federal workers, including air traffic controllers and parts of the military, are continuing to work without pay, raising concerns about their tolerance and the potential for discontent and strikes, as observed in previous administrations where worker actions ultimately pressured lawmakers to reach an agreement.
Five final candidates have been confirmed for the succession of Federal Reserve Chair Jerome Powell, with a definitive decision expected by the end of the year. The confirmed nominees include current Fed Board members Waller and Bowman, former Fed Board member Kevin Warsh, National Economic Council Chairman Hasett, and BlackRock Executive Director Rick Rieder. The selection process involves another round of discussions after Thanksgiving, leading to a final list for President Trump, who will announce his choice before year-end. The next Fed Chair will likely be appointed for a 14-year term as a Board member, commencing February 1st, replacing Myron (who is on unpaid leave). The chosen candidate must undergo Senate confirmation, articulate their economic and monetary policy views, and affirm the Fed's independence to legislators. This individual will need to balance President Trump's preference for lower interest rates with investor expectations for central bank stability and independence. While Jerome Powell's chairmanship concludes in May, his Board membership extends until early 2028, and it remains unclear whether he will depart the Fed, potentially continuing as an influential voice within the FOMC.
Current economic data releases from the US are limited due to the government shutdown, but this week is critical for global markets due to scheduled central bank meetings. The Federal Reserve, Bank of Canada, and European Central Bank are all holding sessions that could significantly influence market direction. Additionally, ongoing international engagements involving President Trump, such as his current visit to Japan and meetings with figures like Ms. Takaichi, are being closely watched for any agreements or contract signings that could impact markets. A particularly important meeting scheduled for Thursday is also anticipated to be highly influential, keeping markets in a state of anticipation over the next three days.
Important news and central bank meetings scheduled for this week are anticipated to significantly impact global markets, with investors closely monitoring developments.
| Event | Status | Key Detail | Market Relevance |
|---|---|---|---|
| US-China Trade Negotiations | Ongoing (Started in Kuala Lumpur) | Aimed at reducing tensions over rare earths, soybeans, Russian oil, tariffs. Trump demands concessions; agreement not widely expected. | Crucial for global market stability, investors closely monitoring outcome by Nov 10 ceasefire deadline. |
| US Government Shutdown | Ongoing (28th day/5th week) | No agreement between parties; Republicans largely blamed by public (50%). Federal workers (e.g., air traffic controllers) working without pay. | Causes historical low public trust, uncertainty in budget approval, potential for worker unrest affecting operations. |
| Federal Reserve Chair Succession | Candidates Confirmed (Decision by year-end) | Five final candidates identified (Waller, Bowman, Warsh, Hasett, Rieder). New chair must balance Trump's rate desires with Fed independence. | Impacts future monetary policy and central bank credibility, influencing investor confidence. |
| Central Bank Meetings | Upcoming This Week | Fed, Bank of Canada, and ECB meetings scheduled. | Expected to be highly influential on market direction and global economic outlook. |
