Attention To Trump’s Continuing Asian Tour but Also Upcoming Central Bank Decisions – Currency Thoughts

Attention To Trump’s Continuing Asian Tour but Also Upcoming Central Bank Decisions

October 28, 2025

U.S. President Trump and Japan’s new prime minister, Sanae Takaichi, apparently hit it off very well. After inking deals on trade and rare earths, President Trump proclaimed the United States to be “an ally at the strongest level” of Japan. The completion of a U.S. trade deal with China later this week also seems a go. Meanwhile, investors await interest rate decisions tomorrow and Thursday, with a consensus that rate levels will be left unchanged by the European Central Bank and Bank of Japan but cut by the Federal Reserve. Signals of future policy will be as important, if not more so, that whatever rate moves are made this week.

The dollar fell 0.5% overnight against the Japanese yen and 0.1% versus the Swiss franc and euro. It also rose 0.3% relative to the South Korean won, Turkish lira and Mexican peso and gained 0.2% against sterling.

Gold’s retreat extended another 2.0% overnight, bringing its move since recording a record high on October 20th to a corrective 10.1%. Bitcoin’s price firmed 0.4% so far today and is at a 2-week high. Oil slipped 1.1% on reports that OPEC+ is considering a further increase in production.

Ten-year sovereign debt yields Are unchanged in the United States and Germany, down three and one basis points in Japan and the U.K. and a basis point higher today in France and Italy.

Stock markets in the Pacific Rim slid back 0.8% in South Korea, 0.6% in Japan, 0.5% in Australia and 0.2% in China. Continental European equities are modestly lower, and so is the futures quote of the Russell 2000. But other key U.S. stock market indices have edged up, along with the British FTSE.

There’s been a 75-basis point increase in the National Bank of Kyrgyzstan’s policy interest rate to 10.0%. This move follows an initial 25-bp increase in July, and together these moves unwind one percentage point of the 500-basis point reduction implemented in three steps between November 2022 and May 2024. Consumer price inflation in the Kyrgyz Republic had receded from an early 2023 peak of 16.2% to 3.8% by August 2024 but then climbed anew back to a 23-month high of 9.5% this past August. Even at 8.4% last month, inflation remains above the central bank’s target of 5-7%, while the economy is continuing to expand very robustly.

Industrial production in India was 4.1% higher in the third quarter than a year earlier.

Irish GDP dipped 0.1% last quarter after a sharply reduced 0.2% quarterly uptick in the second quarter of this year. As a result, the year-on-year growth rate fell from 19.9% in the first quarter to a one-year low of 10.5% last quarter.

France has been the weakest link in the euro area economy lately, as attested by last Friday’s composite and service sector purchasing manager surveys that conveyed the fastest rates of contraction in eight months. Not surprisingly then, news today came that French unemployment had increased another 60k in September to its most elevated level in a half year.

In contrast, Italian consumer sentiment rose 0.8 index points in October to an 8-month high of 97.6 versus an 18-month trough of 92.7 as recently as April. Among Italian manufacturers, moreover, business confidence reached a 17-month high this month.

The latest reading for German consumer confidence of -24.1 was down from -22.5 in the prior month and at a 7-month low.

In Euroland, consumers’ expected inflation over the coming year of 2.7% was 0.1 percentage point lower than revealed a month ago but traces an essentially flat path since March and slightly above this indicator’s low point of 2.4% touched in September 2024. Expectations of inflation over the coming three years of 2.5% also exceeds the ECB target of 2% and justifies the the view expressed by central bank officials that an extended rate pause would now be appropriate.

British shop prices in October recorded a smaller-than-expected 1.0% rise from a year earlier.

In South Korea, real GDP growth of 1.2% in 3Q 2025 was the fastest pace in six quarters. Year-on-year growth nearly tripled to 1.7% from 0.6% in the second quarter. South Korean consumer sentiment slid 0.3 index points this month but, at 109.8, was still well above the 25-month low reading touched last December of 88.2.

Copyright 2025, Larry Greenberg. All rights reserved. 

Tags: German and Italian consumer confidence, National Bank of Krygyzstan, South Korean and Irish GDP growth

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on Tuesday, October 28th, 2025 at 6:22 am and is filed under New Overnight Developments Abroad – Daily Update.
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