The Morning Fill: Tuesday, October 21, 2025

Global Equity Rally Powers On as Trade Tensions Ease | Links: [1], [2], [3], [4]

Global markets extended their rally as Asian stocks hit new records and European shares recovered from recent banking concerns. The Nikkei closed at all-time highs while US markets ended sharply higher, driven by renewed optimism over US-China trade relations following Trump's expectations of progress in discussions with Xi Jinping. Trump indicated Taiwan would feature on the agenda for upcoming meetings and has suggested advancement on critical issues including rare earths access. The broad-based rally reflects improving risk appetite as investors position for possible trade resolution, with semiconductor stocks reaching new peaks and defensive sectors also participating in the advance.

Global Corporations Absorb $35 Billion Tariff Hit as Trade Outlook Stabilises | Links: [5], [6], [7]

Multinational enterprises have absorbed more than $35 billion in cumulative impact from US tariffs, yet corporate forecasts are stabilising as worst-case scenarios fade. The shift from catastrophic projections to more manageable expectations reflects companies' adaptation to the new trade environment through supply chain adjustments, pricing strategies, and operational restructuring. This stabilisation comes as the global economy demonstrates surprising resilience to both trade tensions and AI disruption fears, with major international financial institutions noting better-than-expected adaptation across sectors. The tariff burden, while substantial, has been partially offset by strategic repositioning and the emergence of alternative supply chains, particularly in critical sectors like technology and manufacturing.

Apple Approaches $4 Trillion Valuation on Strong iPhone 17 Demand | Links: [8], [9]

Apple shares surge toward a historic $4 trillion market capitalisation following reports of robust iPhone 17 demand in key markets including the US and China. The milestone reflects resilient consumer spending and Apple's continued dominance in premium smartphones despite broader economic uncertainties. The achievement comes as Apple demonstrates remarkable pricing power and market share expansion in China, a critical market that has shown renewed strength despite geopolitical tensions. This valuation milestone underscores the tech giant's ability to maintain premium positioning while expanding its services ecosystem, providing a positive signal for consumer discretionary spending and technology sector leadership that continues to drive broader market performance.

Japan Makes History with First Female Prime Minister as Markets Surge | Links: [10], [11], [12], [13]

Sanae Takaichi officially becomes Japan's first female prime minister, with markets celebrating expectations of continued fiscal stimulus and accommodative policy. The historic appointment comes alongside speculation that Satsuki Katayama will serve as finance minister, bringing extensive currency diplomacy experience and views that the yen's fair value lies at 120-130 per dollar versus current 151 levels. Japanese equities extended their rally to record highs as investors anticipate policy continuity with potentially more aggressive stimulus measures. The leadership transition signals potential shifts in Japan's approach to fiscal policy, monetary coordination, and currency management that could materially impact positioning in Japanese assets and continued yen weakness if stimulus expectations materialise.

US-Australia Forge $8.5 Billion Critical Minerals Alliance to Counter China Dominance | Links: [14], [15], [16], [17]

The United States and Australia signed a landmark $8.5 billion critical minerals agreement designed to break China's stranglehold on rare earths and other strategic materials. The deal includes $2.2 billion in US Export-Import Bank financing and targets development of lithium, rare earths, and other materials essential for defence and clean energy technologies. With China controlling 90% of rare earths processing and 70% of lithium refining globally, this partnership represents a fundamental shift toward supply chain diversification in critical sectors. Australian miners including Lynas and Pilbara Minerals surged on the announcement, while the agreement signals broader US strategy to reduce dependence on Chinese-controlled supply chains across multiple industries.

• CA Inflation Rate YoY at 13:30 BST - Previous: 1.9% - Key gauge of Canadian price pressures that will influence Bank of Canada policy decisions and CAD strength.

• JP Balance of Trade at 00:50 BST (Wednesday) - Previous: ¥-242.5B - Critical indicator of Japan's export competitiveness and trade health that impacts JPY and global supply chain sentiment.

• EU ECB President Lagarde Speech at 12:00 BST - Lagarde's remarks will provide crucial insights into ECB policy direction and eurozone monetary stance affecting EUR and bond markets.

• CA Core Inflation Rate YoY at 13:30 BST - Previous: 2.6% - Measures underlying price pressures excluding volatile items, essential for assessing persistent inflationary trends in Canada.

• CA Inflation Rate MoM at 13:30 BST - Forecast: -0.1% vs Previous: -0.1% - Monthly price change data that complements the annual inflation picture for comprehensive Canadian economic assessment.

• US Fed Waller Speech at 14:00 BST - Federal Reserve Governor's comments will offer clues on US monetary policy outlook and potential rate path affecting USD and global risk sentiment.

• Danaher Corporation (DHR) at 11:00 BST [Pre-Market] - Est: $1.72 vs Prev: $1.80 - Life sciences giant's results will signal demand trends across biotech and pharmaceutical sectors.

• Coca-Cola Company (The) (KO) at 11:55 BST [Pre-Market] - Est: $0.78 vs Prev: $0.87 - Consumer staples bellwether will reveal pricing power and volume trends amid inflationary pressures.

• Philip Morris International Inc (PM) at 12:00 BST [Pre-Market] - Est: $2.09 vs Prev: $1.91 - Tobacco giant's results will highlight international consumer spending and regulatory impact across emerging markets.

• Contemporary Amperex Technology Co., Limited Class A (300750) at 13:00 BST [Pre-Market] - Est: $0.57 vs Prev: $0.51 - World's largest battery maker will indicate EV supply chain health and Chinese manufacturing strength.

• GE Aerospace (GE) at 14:30 BST [During-Hours] - Est: $1.46 vs Prev: $1.66 - Aviation recovery bellwether will reveal commercial aircraft demand and aerospace supply chain dynamics.

• RTX Corporation (RTX) at 14:30 BST [During-Hours] - Est: $1.41 vs Prev: $1.56 - Defence contractor's results will signal government spending trends and aerospace sector momentum.

• Lockheed Martin Corporation (LMT) at 14:30 BST [During-Hours] - Est: $6.38 vs Prev: $1.46 - Defence spending outlook will impact broader military-industrial complex valuations.

• Netflix, Inc. (NFLX) at 21:01 BST [During-Hours] - Est: $6.96 vs Prev: $7.19 - Streaming giant's subscriber growth and content spending will set tone for media and technology sectors.

• Texas Instruments Incorporated (TXN) at 21:01 BST [During-Hours] - Est: $1.49 vs Prev: $1.41 - Semiconductor bellwether's guidance will indicate industrial demand and chip cycle recovery timing.

• Capital One Financial Corporation (COF) at 21:05 BST [During-Hours] - Est: $4.38 vs Prev: $5.48 - Credit card giant's loan loss provisions will reveal consumer credit health and banking sector outlook.

Gold led gains, climbing 1.43% as safe-haven demand intensified amid ongoing trade uncertainties and geopolitical tensions. China Equity also performed strongly, advancing 1.33% on fresh optimism over potential US-China trade progress following Trump's expectations of breakthrough discussions with Xi Jinping. Global Financials gained 0.83% as banking concerns eased and risk appetite improved across markets.

Conversely, Listed Infrastructure underperformed, dropping 0.27% as investors rotated away from defensive sectors into more cyclical plays. Silver also lagged, falling 0.08% despite its precious metals peer gold surging, highlighting divergent demand patterns within the commodities complex as investors favoured gold's traditional safe-haven properties over silver's industrial applications.

Supply chain diversification: Strategic restructuring of procurement and production networks to reduce dependency on single countries or regions, particularly critical following China's dominance in rare earths processing where alternative sourcing becomes essential for national security and economic resilience.