Weekend round-up ahead of European trading today | investingLive

There was plenty of drama to end things last week and it carried through the weekend as well as the early stages today. It all mostly stemmed from Trump and his penchant for the theatrical, with the latest being stirring the pot with China again. The timing seems uncanny as it comes right after his bid for the Nobel peace prize ended in defeat.

In any case, here’s a summary of what we’re dealing with from Friday and the weekend ahead of European trading later.

France unveils new government despite political turmoil
Sebastien Lecornu was reinstated as French prime minister, just four days after resigning. He has also announced a new cabinet and must now present a 2026 draft budget before the deadline on Tuesday. That will give parliament the required 70 days to scrutinise the plan before year-end comes along. Don’t hold your breath though. As the saying goes, “insanity is doing the same thing over and over again and expecting different results”. 🤪

Japan political fracture finds no solution yet
The Komeito party’s decision to leave the ruling coalition is still sending shockwaves in the Japanese political circles. And that is frustrating Sanae Takaichi in her bid to become the next prime minister. The lack of solutions to resolve the situation is still making for a bout of political uncertainty, preventing much clarity on how things will shape up next. Pain. 😖

China defends its position to impose rare earth export controls
This is Beijing’s ace card and they are not shying away from using it once again in what was supposed to be the run up towards a meeting between Xi and Trump. All of the trade progress is now in jeopardy as both sides are still fighting fire with fire rather than actually striking any meaningful compromises. As mentioned before, the trade conflict is merely paused or put on ice rather than being resolved since April. And the latest developments here reaffirm that as China will not just sit back and let Trump push their buttons. ❌

Trump threatens tariffs but another TACO in the making?
He threatened fresh tariffs against China on Friday but there was some scope for optimism as the deadline given was for 1 November. Trump then said that there is still an “eternity” before the deadline hits, which suggests room for tensions to die down and both sides to find some agreement to press pause on the trade conflict again. While both sides do not want things to escalate further, it doesn’t mean we’re closer to an actual trade deal and for things to get better. Trump’s latest tweet here is also helping to lift the market mood a little as we look to the day ahead at least:

“Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it!!! President DJT”

Sure, it’s passive aggressive. However, that at least beats being all out aggressive I guess. And it does offer the potential for pulling back of his threats, at least that’s how markets are reading the subtext at the moment.

As such, risk trades are bouncing back with the dollar having to cancel out some of the price movements on Friday. AUD/USD is up 0.8% to 0.6523 with S&P 500 futures up 1.3% after the steep decline on Friday last week. 📈