EM LATAM CREDIT: Falabella: Q3 2025 Earnings - Positive

• Block, 8,000 SFRH6 97.12/97.25 call spds, 1.0 vs. 96.565/0.04% at 0839:12ET

Chinese exports to the EU rose 14.2% Y/Y in USD terms in September, an acceleration from 10.4% in August for the highest rate since July 2022. On a 3mma basis, exports to the EU are up 11.3% (vs 9.1% in August). While a slow-moving process, the EU’s share of total Chinese exports (12m rolling sum) appears to have bottomed out and is starting to rise again, currently at 14.7% after plateauing at 14.4% last year. 

• While some ECB officials have downplayed the impact of tariff-related Chinese trade diversion on the near-term inflation outlook in recent months, increased Chinese penetration in Eurozone/EU markets remains a longer-running disinflationary force.
• This medium-term theme may factor into discussions at the ECB’s December decision, where an updated set of macroeconomic projections incorporating 2028 will be provided. In September, ECB President Lagarde sought to downplay the relevance of the 2027 headline HICP projection undershooting the 2% target by tenth. Should this gap-to-target widen, it will provide doves with stronger arguments to deliver one more rate cut to 1.75%.
• Chinese export growth to the US remains sharply negative, falling 27.3% on a 3mma Y/Y basis in September (vs -23.6% in August). While some of this decline can be explained by increased transhipments via ASEAN countries (e.g. Vietnam), this year’s increase in effective tariff rates is still unsurprisingly suppressing trade flows. Chinese import growth from the US is also deeply negative (-16.8% 3mma Y/Y in September). The renewal of Trump administration tariff threats against China in recent days has reminder markets that trade policy uncertainty remains a key theme. 

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• President Donald Trump arrived in Israel this morning for a whistlestop one-day regional tour to tout the first phase of the US-brokered Gaza peace deal.
• Day 13 of the US government shutdown, and the impasse continues without signs of an offramp. The White House had begun laying off more than 4,000 federal workers, with Treasury and HHS accounting for more than half of the layoffs.
• Trump dialled down tensions with China after roiling markets with a statement threatening a new 100% tariff on Chinese goods and to cancel a planned meeting with Chinese President Xi Jinping.
• Treasury Secretary Scott Bessent said he is “confident this can be de-escalated,” as lines of communication have been opened, noting that “tariffs don't have to happen”.
• An Indian delegation will travel to the US this week for talks aimed at striking a trade deal.
• Trump's deal with AstraZeneca signals the White House has paused plans for pharma tariffs.
• Secretary of State Marco Rubio reassured Republicans that AUKUS will survive a Pentagon review.
• National Guard troops are awaiting deployment to Chicago and Portland pending federal appeals court rulings.
• Trump is weighing up using Tomahawks as leverage with Russian President Vladimir Putin.
• Defense Secretary Pete Hegseth is setting up a new counter-narcotics Joint Task Force. Trump has a new plan to pressure Venezuelan President Nicolas Maduro.
• Poll of the Day: The shutdown might hurt Republicans more than Democrats

Full Article: US DAILY BRIEF