Rare Earth Exports: A Key Factor in Trade
China's rare earth export controls have become a crucial determinant of risk appetite in the FX markets over the next four weeks.
The decision to impose export controls on rare earths has sparked concern in the US and across G7 nations, making it a highly debated topic in financial markets.
The ability or failure to negotiate those controls away will be one of the hottest topics for financial markets over the next four weeks.
The dollar has weakened slightly, with short-dated US rates at their lowest for the year. The Fed's Beige Book suggests a potential rate cut at the end of the month, despite suspended official data releases due to the government shutdown.
- US-China relations are currently the hottest topic in financial markets, with key dates approaching.
- Betting markets expect the government shutdown to continue into November.
Author's summary: Rare earth exports impact US-China trade relations.