China’s trade engine continues to defy global headwinds, posting a record USD 1 trillion surplus even as geopolitical tensions and a years-long trade war weigh on demand. The figure underscores the resilience of China’s export machine and its deep integration into global supply chains, despite growing efforts by the US and Europe to diversify sourcing.
Consumer prices in China rose 0.7%, the fastest pace since February 2014, signaling tentative traction in Beijing’s efforts to revive domestic demand. The combination of firmer inflation and a blockbuster trade surplus adds momentum to recent optimism around the Chinese economy.
That optimism was reflected in markets: Chinese property developers jumped 4%, buoyed by fresh stimulus speculation and progress in Vanke Co.’s debt-restructuring negotiations, a key sector barometer following years of financial stress among major builders.
Globally, bond markets remained under pressure. Sovereign yields climbed to their highest levels since 2009 as investors pared back expectations for aggressive monetary easing. Markets are now pricing in a slower cutting cycle amid sticky inflation and resilient growth across major economies.
In France, political tensions eased after the National Assembly approved a social-security financing bill, averting a potential government crisis and clearing a path for smoother negotiations over the 2026 budget.
The spotlight now shifts to the Federal Reserve, where traders widely expect a 25-basis-point rate cut today, followed by a pause as policymakers assess the trajectory of inflation through 2025 and into 2026.
Global equity moves were muted. European stocks slipped about 25 basis points, while Asian markets gained by a similar margin. US equity futures edged slightly lower, with investors beginning to price the Fed’s longer-term policy outlook and its implications for next year’s growth and earnings.
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