Mini Program: Daily Global FX Market News Express
Overseas
Morgan Stanley: USD positions turn positive, but medium-term outlook remains weak
Morgan Stanley strategists noted that the USD position has turned positive for the first time since the first quarter of 2025. “Investors seem to be gaining increasing confidence in the US outlook.” They pointed out that events outside the US have also reduced the attractiveness of non-USD assets, including political uncertainties in Japan and France. Additionally, skepticism is rising over whether investors will continue purchasing more downside risk hedges for the dollar. However, in the medium term, the USD still faces the risk of weakening again. If economic data fails to show meaningful signs of recovery, particularly in employment, markets may price in heightened expectations of US interest rate cuts. Meanwhile, pessimism about other regions globally may already be fully priced in by the market, or even potentially overestimated, while further foreign exchange hedging could still occur.
Morgan Stanley: The Fed is expected to cut rates significantly, and the USD may weaken over the next year
Morgan Stanley strategists stated that the USD could soften over the next year as the Fed’s rate cuts are expected to exceed those of the European Central Bank. They noted that a potential weakening of the US growth advantage is another factor pressuring the dollar. “The slowdown in US growth we anticipate reflects the lagged impact of tightening policies, a decline in net immigration inflows, relatively moderate fiscal support, and short-term drags from tariff policies.” Furthermore, ongoing US policy uncertainty surrounding trade and the independence of the Federal Reserve also points to a weaker USD. At the same time, concerns about fiscal sustainability outside the US are expected to ease.
Barclays: The Fed’s interest rate meeting may reveal policy divergence
Barclays expects the Federal Reserve to cut interest rates by 25 basis points this week, but there may be signs of divergence among policymakers. Governor Milan might advocate for a larger rate cut, while some other officials could prefer maintaining the current interest rate level. Additionally, Barclays also anticipates that the Fed may signal an end to its balance sheet reduction plan by December.
Goldman Sachs: As monetary policy gradually normalizes, the yen is expected to recover to 100 against the USD over the next decade
Goldman Sachs stated that as monetary policy gradually normalizes, the phenomenon of the yen being ‘undervalued’ will diminish over the next decade. ‘The yen’s return to 100 against the US dollar over the next decade (compared to the forward pricing of 115-120) is not as extreme as it might initially appear,’ strategists including Kamakshya Trivedi wrote in a report. Under the leadership of new Prime Minister Masako Kōchi, Japan’s renewed shift toward ‘Abenomics’ is likely to be much milder, as inflation remains politically unpopular. ‘Despite the significant deviation of the USD/JPY exchange rate from fair value for many years, it has always returned to the GSDEER fair value over time.’
Domestic
CICC: Vietnam’s classification as a secondary emerging market will trigger foreign capital inflows.
According to a CICC research report, Vietnam’s stock market is reaching a pivotal moment—FTSE Russell announced in October 2025 that it would reclassify Vietnam from a frontier market to a secondary emerging market, with the change set to take effect in September 2026. We anticipate that this market upgrade will trigger an inflow of foreign capital, with passive funds alone expected to reach $1-1.5 billion over the next 1-3 years. The financial sector (banks and brokerages), real estate, consumer goods, and some industrial sectors are likely to be the main beneficiaries. Market liquidity is expected to deepen, with average daily trading volume potentially increasing from the current level of approximately $1.4 billion toward $2 billion. The Vietnamese government has also clearly set a goal of being included in the MSCI Emerging Markets Index by 2030.
Huatai Securities: US proposal aims to accelerate the grid connection of large loads such as AI.
Huatai Securities noted that the US Secretary of Energy has issued a proposed rule aiming to expedite the grid connection approval process for large load projects, including data centers, while considering setting a time limit for such approvals (potentially within 60 days vs. the current three years or more). This could further drive the growth in electricity demand from large load projects, continuing the trend of increasing power shortages and grid expansion needs in the US due to the rapid rise of data centers. We believe that gas turbines and grid construction, as primary sources of power supply, will continue to benefit. On the other hand, traditional power sources are still unlikely to fully bridge the supply-demand gap expected between 2025 and 2027, creating growth opportunities for small gas turbines, solid oxide fuel cells (SOFC), and portable power solutions like solar-plus-storage systems.
Huatai Securities: Global LME aluminum prices are expected to rise above USD 3,200 per ton next year.
Huatai Securities pointed out that the global supply growth rate of electrolytic aluminum may only be 1.9% next year, significantly slowing down compared to the supply-side growth rates in 2024 and 2025. On the demand side, under the backdrop of a global manufacturing recovery, quantitative methods estimate that global demand growth may reach approximately 2.3% next year. The overall supply-demand gap is expected to widen further to 800,000 tons, and global LME aluminum prices are projected to rise above USD 3,200 per ton next year.
Guotai Haitong: The cyclical bottom for the coal sector has been confirmed in the second quarter.
According to a research report by Guotai Haitong, the cyclical bottom of the coal sector was confirmed in the second quarter of 2025. A reversal inflection point in the supply-demand dynamics has emerged, with downside risks fully released. Since the price increase began on September 15, coal prices have exceeded RMB 770 per ton as of last Friday. This round of coal price increases has shown an unexpectedly strong upward trend, driven by multiple favorable factors. From a short-term perspective, the current coal price is nearing its short-term peak. After entering winter, coal prices may experience a slight decline, but the overall downward adjustment will be limited. It should be noted that the specific trajectory of coal prices during the winter still requires continuous monitoring of this year’s weather conditions, as the intensity of weather patterns will directly impact short-term price fluctuations. From a long-term perspective, the core reason for this round of coal price increases lies in the fundamental reversal of the supply-demand structure of the coal industry since May. Based on this pivotal shift, the medium-term upward trend in coal prices is expected to remain unchanged.
Galaxy Securities: Increased losses in October may accelerate the destocking of hog farming production capacity.
According to a research report by China Galaxy Securities, increased losses in October may accelerate the destocking of hog farming capacity. In September, pet food exports increased in volume but decreased in price, with the total export value remaining under pressure. China Galaxy Securities continues to emphasize the dual offensive and defensive investment opportunities in the hog farming industry. Considering the impact of breeding sow efficiency and farming productivity, hog prices are expected to decline year-on-year by 2025. Taking into account both policy-driven and industry-loss-induced destocking, investors should focus on high-quality hog enterprises with significant marginal cost changes and strong financial positions. 2) The pet food industry is in a growth phase, with market shares of quality companies showing an upward trend. 3) Attention can be paid to the post-cycle of the farming chain; leading feed provider Haid Group and animal vaccine-related companies are recommended. 4) Given the relatively low supply of yellow-feathered chickens and the upcoming peak season, prices may remain high.
CITIC Securities: Market sentiment remains in high volatility; it is recommended to focus on four key thematic directions—anti-involution, AI computing power, semiconductors, and short-form dramas.
CITIC Securities believes that market sentiment continues to experience high volatility, with trading still centered around the technology theme. The AI computing power sector has seen a surge in trading enthusiasm. From the perspective of catalysts and timing, the current period coincides with the intensive release of Q3 earnings reports. Based on an analysis of market conditions, catalytic factors, and comprehensive quantitative indicators, it is recommended to focus on four key thematic directions—anti-involution, AI computing power, semiconductors, and short-form dramas. (Jinshi Data APP)
CITIC Securities: The current level of term spread in the bond market has adjusted relatively sufficiently, and further upside potential at this point may be fairly limited.
CITIC Securities believes that PBOC Governor Pan Gongsheng’s keynote speech at the 2025 Financial Street Forum Annual Meeting, announcing the resumption of government bond trading, likely stems from intentions to support fiscal policy, ensure ample liquidity for financial institutions at year-end, and strengthen the central bank’s ability to manage yield curve dynamics, reaffirming an accommodative monetary stance. A short-term decline in the bond market is expected, but the medium- to long-term operating logic remains largely unchanged. Referring to Q3, when the bond market faced overall pressure, the yield on 10-year government bonds trended upward with volatility, during which the bond curve steepened into a bearish pattern, and the term spread of government bonds continued to widen, especially with the 30Y-10Y spread reaching a two-year high. Recently, the widening of the term spread, amid generally stable short-term rates, can mainly be attributed to a decline in institutional trading preferences and marginal shifts in future growth expectations. In the long term, considering the impact of reduced liquidity premiums, we believe the current level of the term spread has adjusted sufficiently, and the room for further upside at this point may be relatively limited.
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