Wealthion Macro Bites 10/20/25

Japan’s Liberal Democratic Party and the Japan Innovation Party are set to sign a coalition agreement paving the way for Sanae Takaichi to become Japan’s first female Prime Minister and implement her platform of aggressive fiscal spending in strategic sectors such as AI, semiconductors, energy and infrastructure; tax cuts; increased spending on defense and trade liberalization.  On the news, the yen weakened, JGB yields rose and the Nikkei 225 surged above 47,000 for the first time to a closing high of 49,185.

After contracting significantly on Thursday (1-month rate touched 7%), 1-month (19.9%), 3-month (13.9%) and 12-month (6.8%) silver lease rates are rising once again. 

Deutsche Bank estimates that at current (10/17) spot prices gold’s share of global F/X reserves has risen from 24% AT June month-end to 30%, while the total U.S. dollar share has dropped from 43% to 40% over the same span.  Deutsche Bank estimates the gold and USD percentages would match at 36% at spot $5,790 (all other things being equal).

Asian gold demand has remained strong despite record gold prices with Indian dealers charging $25 premiums over official domestic prices last week (highest in over a decade), and September Chinese imports of non-monetary gold (92.7t) +6% m/m and +60% y/y.

S&P downgraded France’s credit rating by a single notch to A+/A-1, warning that political instability put the country’s finances at risk.

Credit stress continues to mount as Americans struggle to service their car loans.  Fitch reports that 60-day delinquent subprime auto loans measured 6.43% (outside a 6.45% tick in January) the highest since Fitch records began in 1993 and far above the 5.04% GFC peak.

Euro Stoxx 50 +0.65%, S&P futures +0.25% and Nasdaq futures +0.35%.  DXY dollar index +0.15%, spot gold +0.3% and spot silver +0.1% (gold/silver ratio at 82.0).