US-China talks in focus: Daily Outlook

Key developments

Markets eye Trump-Xi summit: Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng met yesterday ahead of Thursday’s Trump-Xi summit, with Bessent calling the talks “very successful”. The US is reportedly holding back the announcement of proposed “excess capacity” tariffs. Asian equities and US futures rose in early trade.

US factory output disappoints: US factory output fell 0.3% month-on-month in August, its first decline since late 2025 and well below consensus expectations for a 0.3% gain. A wider measure of industrial production was flat, helped by stronger utility output as summer-cooling demand rose.

Houthi attacks broaden: Houthi forces targeted Riyadh and a Saudi Aramco facility in Yanbu over the weekend. Separately, US Central Command said that Hormuz oil shipments hit a six-month high over the past two weeks, with mine-clearance efforts "paying off".

Oil falls on diplomacy hopes: Brent fell in early trade today after US President Donald Trump signalled openness to meeting Iranian President Pezeshkian at this week’s UN General Assembly. It settled at $103.87/b on Friday, down almost 1%. 2yr and 10yr Treasury yields rose 8bps and 7bps, respectively.

Today's major data

No major data releases today. Beyond the Trump-Xi summit, the week ahead brings September flash PMI readings for the UK, the US and the Eurozone.