Reuters: A high-risk week for global markets — Xi Jinping’s state visit to Washington and the UN General Assembly

Global markets are heading into a high-stakes week, with the summit between the US and Chinese presidents in Washington and the High-Level Week of the UN General Assembly, against a backdrop of multiplying global crises, Reuters writes in its weekly markets roundup.

The main event of next week will be Chinese president Xi Jinping’s three-day state visit to Washington to meet his American counterpart Donald Trump. The two last met in Beijing in May and relations have been largely stable since last October’s fragile trade truce, but markets will watch closely how things go after everything that has happened since, particularly regarding the war in Iran.

US allies in Asia worry Trump may soften support for Taiwan in exchange for an economic win ahead of the US midterm elections, while the fierce AI race between the US and China and the American military buildup in space will be other hot topics, given the depth of the rivalry between the two countries. Trump will also host a state dinner at the White House — only the second of his term — and the guest list is expected to be packed with tech executives, including Nvidia CEO Jensen Huang.

Preliminary US manufacturing purchasing managers’ index (PMI) data, published on Wednesday, will give global bond markets something to chew on. The yield on 10-year US Treasury bonds — a key driver of global borrowing costs and currencies — has just tested the psychologically important 5% threshold, and the Federal Reserve has just delivered its first interest rate hike in more than three years, so investors are waiting to see if something breaks.

The High-Level Week of the 81st Session of the UN General Assembly starts next week under the theme «Restoring trust, managing transformation», against a backdrop of deep multilateral paralysis and multiplying global crises. The main draw will be the deep fractures of a fragmenting world order, with the frozen conflicts in Ukraine and the Middle East deepening the divide between the West and the Global South.

Artificial intelligence development will remain in the spotlight, as companies, governments and investors grapple with increasingly apocalyptic warnings about the risks of the emerging technology. This month’s calls from the Anthropic CEO and other AI lab leaders to «slow down» development came amid bleak statements about potential threats to humanity itself. President Trump has called these warnings a hoax, signaling he won’t let developers put on the brakes, while European Commission president Ursula von der Leyen wants to bring the key AI players to Europe to discuss the risks.

Source: Reuters