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(Reuters) -Political turmoil in France and Japan looms large over markets as U.S. banks kick off the latest earnings season, while the government shutdown drags on and policymakers gather in Washington for the IMF and World Bank annual meetings.  Here's your week ahead from Rae Wee in Singapore, Lewis Krauskopf in New York, and Dhara Ranasinghe, Amanda Cooper and Karin Strohecker in London. 1/BANKS KICK OFF US EARNINGS SEASON  Major U.S. banks report financial results in the coming week as the third-quarter earnings season kicks into high gear with investors counting on solid profits to support record-high stock prices. JPMorgan Chase, Citigroup, Wells Fargo and Goldman Sachs  are due to report as well as asset manager BlackRock. Overall, S&P 500 companies are expected to post an 8.8% rise in third-quarter earnings year-on-year, according to LSEG IBES. Financial sector earnings are expected to increase almost 13%. With closely watched economic reports being delayed due to the government shutdown that started on October 1, corporate reports are taking on added significance. Reports on consumer and producer prices and retail sales are among those scheduled for the coming week that could be pushed out if the shutdown is still in effect.  2/ A NEW SICK MAN  The euro zone has a new 'sick man': France – hard to ignore being the bloc's second biggest economy, a key architect of the euro and home to three globally systemic banks.  It has one of the biggest budget deficits in Europe and a weak economy. A political crisis makes improvements impossible. Sebastien Lecornu, France's fifth prime minister in two years, resigned on Monday, and time is running out to get the 2026 budget through a fractured parliament. Latest developments are more positive: French President Emmanuel Macron is to appoint a new prime minister later on Friday, reducing the risk of fresh snap elections to break the impasse. French bonds and stocks have recovered slightly. Still, the prognosis remains grim. If the Socialists run the next government, a possibility, rolling back a key pension reform could be part of the deal.  This could swell the deficit by 3 billion euros ($3.5 billion) in 2027, say analysts. And, that won't sit well with Brussels, ratings agencies and bond vigilantes.      3/CHANGE OF GUARD Sanae Takaichi, leader of the Liberal Democratic Party, looked set to become Japan's first female premier in a parliament vote that was expected on October 15. But the date will be likely pushed back after junior coalition partner Komeito pulled its support, breaking their 26-year-old alliance.  Komeito has been at odds with the hardline conservative Takaichi, known for her expansionist fiscal and monetary agenda.  The uncertainty is set to stoke worries about the outlook for one of the world's most indebted countries. Japanese markets have already had a whirlwind few sessions, with stocks surging and the yen and long-dated government bonds sliding as investors bet on a revival in big spending and loose monetary policy. 4/LET'S GET TOGETHER Policymakers head to Washington for the annual International Monetary Fund and World Bank meeting featuring Group of Seven and G20 finance ministers and central bank governors gathering on the sidelines and the release of the Fund's World Economic Outlook on Tuesday, among other reports.  Away from the set pieces, there's no shortage of hot topics to discuss – where the fiscal-fuelled rally will leave government debt burdens, the economic effects from Trump's trade policy, the push to use Russian frozen assets to fund Ukraine, a Middle East in flux and the impact of stablecoins.   Meanwhile on the sidelines, Argentina's President Javier Milei will meet Trump in the Oval Office as final details of Washington's $20 billion lifeline for Buenos Aires are eagerly anticipated.      5/SILVER LININGS Gold has dominated the headlines, with its 50% annual gain to above a record $4,000 an ounce, beating even stellar performers like the S&P 500 and bitcoin.  Zoom in on the precious metals complex and gold is a laggard. Silver has risen 70% to a record $51 an ounce, beating its previous high in 1980, when a bid by the Hunt brothers – two Texan oil billionaires – to corner the market failed, causing the price to collapse.  Silver often enjoys something of a halo effect from gold, drawing in funds from investors that want an alternative to the dollar, or a real asset to hold.  But it also has industrial use and an anticipated deficit of physical metal has boosted the price. It has always been more volatile, outpacing gains in gold on the way up, only to fall faster and harder on the way down.  ($1 = 0.8638 euros) (Graphics by Pasit Kongkunakornkul, compiled by Karin Strohecker; Editing by Emelia Sithole-Matarise)

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By Tom Sims HANAU, Germany (Reuters) -Germany's savings banks are turning to a leading U.S. financial firm to help customers with international payments, a move aimed at fending off upstart low-cost competitors that has raised concerns over the sovereignty of Europe's financial services. The banks, or Sparkassen, are teaming up with BNY, formally The Bank of New York Mellon, to process customer transfers of up to 3,000 euros ($3,475.50) to recipients outside the European Union, four bankers told Reuters. The effort is in the test phase at two smaller German savings banks and will be rolled out more broadly in the coming months, they said. EMPOWERING GERMAN BANKS TO COMPETE WITH FINTECH CHALLENGERS By lowering the fees they charge by as much as 75% in some cases, the savings banks hope to win back business lost to the likes of Revolut, Wise and others. They also aim to capture a growing segment of German residents: migrants who make low-value transfers abroad. Savings banks are a major force in Europe's largest economy, collectively holding 1.5 trillion euros in assets and more than 36 million bank accounts for individuals and 4.6 million for businesses. A BNY document seen by Reuters describes the joint project, called Crossmo. "It empowers the German savings banks to compete effectively with fintech challengers," it said. The savings bank in Hanau, close to Germany's financial capital, Frankfurt, is currently testing the new system after a banker there, Jan Miska, read an article that described many people making transfers abroad to support their families. "But it wasn't something we were seeing at our bank. We wondered why are there so few transactions. Why are people not doing it here? So we looked into it," Miska said. Customers, the savings banks found, were turned off by their high fees and were instead withdrawing money and using cheaper alternatives to send it. They fear those customers may be lost for good if they then open accounts with those competitors. Miska showed how the new initiative allows his customers to make a transfer to a recipient at a bank outside the EU using the Sparkasse website or app for a fee of 5.50 euros, compared with a previous charge of 22 euros. CRITICISM AND A CALL FOR EUROPEAN ALTERNATIVES But the effort comes amid criticism of Europe's heavy reliance on U.S. finance infrastructure, ranging from Visa to PayPal, at a time of heightened geopolitical tensions.  "The time has actually come to think about purely European alternatives or projects … That should be the top priority," said Carolina Melches, a finance expert at the Berlin-based advocacy group Finanzwende. But Axel Weiss, who oversees payments at the savings banks' national umbrella association DSGV, addressed criticism of partnering with a non-European institution, saying the issue of sovereignty does play a role. "However, we believe that we need good strong partners who have a global network with extensive country coverage and who, of course, also offer secure and cost-effective transaction processing," he said. ($1 = 0.8632 euros) (Reporting by Tom Sims; Editing by Joe Bavier)

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By Anna Hirtenstein LONDON (Reuters) -Oil prices declined on Friday, after settling around 1.6% lower in the previous session, as the market's risk premium faded after Israel and Hamas agreed to the first phase of a plan to end the war in Gaza. Brent crude futures were down 16 cents, or 0.25%, at $65.06 a barrel at 0819 GMT. U.S. West Texas Intermediate crude was down 7 cents, or 0.11%, to $61.44. "Finally having some kind of peace process in the Middle East is lowering the shoulders a little bit," said Bjarne Schieldrop, chief commodities analyst at SEB. This could ease fears about crude carriers passing through the Suez Canal and the Red Sea, he said. BOTH BENCHMARKS ON TRACK FOR WEEKLY GAINS Israel and the Palestinian militant group Hamas signed a ceasefire agreement on Thursday in the first phase of U.S. President Donald Trump's initiative to end the war in Gaza. Under the deal, which Israel's government ratified on Friday, fighting will cease, Israel will partially withdraw from Gaza, and Hamas will free all remaining hostages it captured in the attack that precipitated the war, in exchange for hundreds of prisoners held by Israel. Numerous vessels have been attacked by the Iran-aligned Houthis in Yemen since 2023, targeting ships they deem linked to Israel in what they described as solidarity with Palestinians over the war in Gaza. On a weekly basis, both crude benchmarks were on track to close in positive territory. Brent is up around 1% and WTI about 0.6% so far, after falling steeply last week. Prices climbed about 1% on Wednesday to a one-week high because of stalled progress on a Ukraine peace deal, a sign that sanctions against Russia, the world's second-largest oil exporter, could continue. The Gaza ceasefire deal means the focus can move back to the impending oil surplus, as OPEC proceeds with the unwinding of production cuts, said Daniel Hynes, an analyst at ANZ. A smaller-than-expected November hike in output agreed by the Organization of the Petroleum Exporting Countries and allies (OPEC+) on Sunday eased some of those oversupply concerns. "Markets’ expectations for a sharp ramp up in crude supply have not manifested themselves in substantially lower prices," BMI analysts said in a note on Friday. "The most recent rise in production is lower than previously feared, contributing to a slight rise in prices for the week," they said. Investors are also worried that a prolonged U.S. government shutdown could dampen the American economy and hurt oil demand in the world's largest crude consumer. (Reporting by Anna Hirtenstein. Additional reporting by Sudarshan Varadhan. Editing by Christian Schmollinger and Mark Potter)

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