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(Reuters) -A group of U.S. banks, including JPMorgan Chase, Bank of America and Goldman Sachs, is hesitant to lend $20 billion to Argentina without guarantees or collateral, the Wall Street Journal reported on Monday. U.S. Treasury Secretary Scott Bessent said last week that the department was working with banks and investment funds to create a $20 billion facility to invest in the South American country's sovereign debt. Bankers are waiting on guidance from the Treasury Department on what collateral Argentina would be able to provide for them or if Washington would plan to backstop the facility on its own, the report said, citing people familiar with the matter. The loan facility has not been finalized and might not come together if the banks' collateral question is not resolved, the report said. "Discussions on this facility remain ongoing, and we look forward to sharing more details once these talks are complete," a U.S. Treasury spokesperson told Reuters. Goldman Sachs declined to comment, while JPMorgan Chase, Bank of America and Citigroup did not respond to Reuters' requests for comment. Argentina's central bank said on Monday it signed a $20 billion exchange rate stabilization agreement with the U.S. Treasury Department, providing a total of $40 billion in U.S. support for Latin America's third-largest economy. The Treasury has also bought Argentine pesos in the open market. The U.S. facilities are also raising the possibility of a conflict between the IMF and the Treasury Department, with officials from the fund concerned that the Trump administration could pressure Argentina to put the U.S. liabilities ahead of the IMF's sizable loans, the WSJ report said. The IMF did not immediately respond to a Reuters request for comment. (Reporting by Anusha Shah and Ruchika Khanna in Bengaluru; Editing by Maju Samuel, Subhranshu Sahu and Alan Barona)

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BEIJING/SINGAPORE (Reuters) -Chinese doctor Lisa Zhu took full advantage of consumer goods subsidies this year, buying three air conditioners and a washing machine – the big-ticket spending policymakers want to see from households as they target roughly 5% economic growth. But there is a catch. "I no longer need to purchase any home appliances," said the 36-year-old. "These should last for several years." FROM TAILWIND TO HEADWIND? China's 300 billion yuan ($42 billion) subsidies, equivalent to about 0.2% of gross domestic product, are punching above their weight this year, with analysts saying the spending they incentivised had a greater impact on growth than their size. But, into the final quarter of the scheme – which supports purchases of appliances, electronics and electric vehicles – that payoff is already fading. What's worse, this year's consumption growth is borrowed from the future, with sales of these durable goods likely to plunge in coming months as people like Zhu no longer need new ones. These subsidies were the most significant move that policymakers took this year to spur household demand – China's decades-old structural weakness. Their diminishing impact puts pressure on policymakers to introduce challenging and costly reforms to bring about more durable change and put the economy on a more sustainable footing. "Such policies don't boost residents' income to create sustainable consumption," said Hannah Liu, China economist at Nomura, referring to the subsidies. "Instead, they encourage people to advance their durable goods purchases through one-time price reductions. This design inevitably leads to a payback effect." China's finance ministry and the state planner – the National Development and Reform Commission – did not immediately respond to requests for comment. Finance Minister Lan Foan said in September the policy deployed "real money to stimulate consumer vitality." In the first nine months of the year, sales of refrigerators spiked 48.3% from the same 2024 period. They rose 34.9% for electric vehicles and 26.8% for audio-visual gadgets, state media reported last week. Larry Hu, chief China economist at Macquarie, says the subsidies have probably contributed some 0.5 percentage point to GDP this year. But Nomura expects home appliance sales to already drop in the fourth quarter by around 20% year-on-year, and auto sales by 2.0% due to the front-loaded buying and the base effect caused by a similar, but smaller subsidy scheme at the end of last year. This means that the "payback effect" is already in play, Liu said. SHOULD CHINA MASSAGE ITS CONSUMERS? Shi Xiaolan, a salesperson at a home appliance store in the eastern Anhui province, says this is already visible on the ground. Her shop's sales fell to 3 million yuan in July from 13 million in June and haven't recovered since. "Customers made purchases in advance, which is why our outlook is not very good," Shi said. "Each month is harder than the last." Morgan Stanley's chief China economist Robin Xing says Beijing could focus on subsidising the service sector next year, by issuing vouchers for dining out, going to the cinema or spas, or travelling. "By subsidising services, Beijing can reduce the tendency for consumers to frontload their purchases, which often leads to a sharp slowdown after policy is phased out," Xing said. "The labour-intensive nature of services means this approach could be more effective in creating jobs and thus generating spillover effects." But, Xing added, China should also take structural measures that shift "the supply-centric business model in the last 20 years to one that places greater emphasis on household well-being with social welfare reform." CALLS GROW FOR WELFARE REFORM Data showed on Monday that retail sales growth is falling behind the overall economy, suggesting that cyclical consumption stimulus hasn't prevented China's structural supply-demand imbalance from worsening. China's household consumption lags the global average by some 20 percentage points of GDP, while its investments – mainly in infrastructure and manufacturing – are about 20 points ahead, making the economy too reliant on exports at a time when trade tensions with Washington and others are heating up. This is also fuelling deflation at home. Xing estimates that increasing the social welfare accounts of farmers and rural migrant workers to about 1,000 yuan per month from a minimum of 143 yuan currently, would lift Chinese consumption to 45% of GDP in five years from about 40% currently, surpassing $10 trillion. It's the "blue sky scenario," he says, but "this is the ideal way." "Otherwise, these consumer goods subsidies are cyclical, short-term measures. It's piecemeal and unlikely to reflate consumption in a sustainable way." In the central city of Jingzhou, Cheng Sha, who owns an air conditioner shop, feels the effects of an economy relying on external demand at the expense of consumers, who feel increasingly worried about their jobs and incomes. The 42-year-old worries that as the effect of subsidies fades into 2026 he won't be able to keep the shop open. He says two-thirds of the 15 merchants in the city of 5 million selling air conditioners are in a similar situation. "The entire city is poor," said Cheng. "Stores in various sectors are closing down one after another." "If people don't have money, those subsidies can't stimulate consumption." ($1 = 7.1241 Chinese yuan renminbi) (Reporting by Liangping Gao, Ellen Zhang and Kevin Yao in Beijing and Claire Fu in Singapore; additional reporting by Joe Cash in Beijing; Graphics by Sumanta Sen; Writing by Marius ZahariaEditing by Shri Navaratnam)

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By Rae Wee SINGAPORE (Reuters) -The yen slid after hardline conservative Sanae Takaichi was elected as Japan's first female prime minister, as investors bet that the move could bring about a muddied rate outlook and greater fiscal largesse. Takaichi, leader of Japan's ruling Liberal Democratic Party, won the lower house vote to choose the next prime minister on Tuesday, clearing the way for her inauguration later in the day. The move was widely expected by investors after she was backed by the right-wing opposition party Ishin, though the yen still fell in reaction to the outcome. The Japanese currency was last down 0.4% at 151.38 per dollar. "While fiscal stimulus is expected, it is unlikely to be bold given the difficulties of policy management," said Hirofumi Suzuki, chief FX strategist at SMBC. "A sharp depreciation of the yen is likely to be avoided, with gentle downward pressure on the yen expected to persist." Earlier on Tuesday, local media reported that Takaichi had finalised a plan to appoint Satsuki Katayama, a former regional revitalisation minister, as finance minister. During an interview with Reuters in March, Katayama signalled her preference for a stronger yen. Her appointment could give markets cause to rethink the idea of pushing the yen too low. Still, Takaichi's support for fiscal stimulus and looser monetary policy kept investors on edge and complicates the Bank of Japan's path for rate increases. "From a political perspective … there may be considerations to delay monetary tightening until fiscal easing gains traction. The BOJ is thus caught between a rock and a hard place," said HSBC chief Asia economist Fred Neumann. The yen struggled against its other peers, with the euro last up 0.33% at 176.06 yen, while sterling rose 0.28% to 202.55 yen. WAITING ON THE FED In the broader market, currencies were mostly rangebound on Tuesday, though the dollar reversed its losses from earlier in the session as it drew support from a weaker yen. Sterling was down 0.16% to $1.3383, while the euro fell 0.1% to $1.1630, little helped by easing political uncertainty in France. The U.S. dollar index was up 0.16% at 98.77, while the Australian dollar fell 0.21% to $0.6499. The overall market mood was largely upbeat after U.S. President Donald Trump said on Monday he expects to reach a trade deal with Chinese President Xi Jinping. And White House economic adviser Kevin Hassett said that the 20-day U.S. federal government shutdown was likely to end this week. Jitters over credit risks among U.S. banks also dissipated slightly. Yet the optimism failed to move currencies significantly, as investors stayed largely on guard ahead of a slew of risk events next week, headlined by the Federal Reserve's policy meeting. "My sense is that next week is probably a far more important week in terms of risk," said Ray Attrill, head of FX research at National Australia Bank. "Given where markets are priced … the risk is that the commentary surrounding a cut next week really sort of leads to some questioning of current confidence about a follow-up move in December," he said of the expectations for a Fed cut. In other currencies, the New Zealand dollar fell 0.3% to $0.5727, while the onshore yuan firmed slightly to 7.1183 per dollar, after China's central bank set the daily midpoint at its firmest level in a year. (Reporting by Rae Wee; Editing by Shri Navaratnam)

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By Ankur Banerjee SINGAPORE (Reuters) -Asian shares rose on Tuesday as the prospect of easing trade tensions between the world's top two economies boosted risk sentiment, while Sanae Takaichi was set be elected Japan's next prime minister, lifting the Nikkei and weighing on the yen. U.S. President Donald Trump said he expects to reach a fair trade deal with Chinese President Xi Jinping and downplayed risks of a clash over the issue of Taiwan. Trade tensions between the U.S. and China have weighed on the markets in recent weeks, with investor focus now on Trump's planned meeting with Xi on the sidelines of an economic conference in South Korea next week. The lingering hope that a resolution could be on the cards lifted investor sentiment. MSCI's broadest index of Asia-Pacific shares outside Japan hit an over four-and-half-year high and was last up 0.94%. China stocks rose 0.2% while Hong Kong's Hang Seng was 1% higher in early trading. Australian shares surged as investors snapped up rare earths and critical minerals stocks after the country signed a supply deal with the United States. Japan's Nikkei rose to a record peak and was on the cusp of hitting a landmark 50,000 points as the so-called 'Takaichi trade' showed no signs of stopping. A parliamentary vote confirmed Takaichi as the nation's next prime minister. INVESTORS BUY THE DIP Investor sentiment was also hit hard last week as a clutch of bad loans at U.S. regional banks spurred concerns over credit risks that threatened to spill into the broader markets. The prolonged U.S. government shutdown also weighed on risk assets. But investors so far this week have shrugged off those concerns and bought the dip, focusing on upcoming earnings from several large firms and betting that trade tensions would ease. "The market has hurdled the wall of worry with ease, with new capital injected into risk and fresh oxygen into the market’s lungs," said Chris Weston, head of research at Pepperstone. Market expectation of the Federal Reserve cutting interest rates in the next two meetings and comments from White House economic advisor Kevin Hassett that the federal government shutdown is likely to end this week also buoyed sentiment. A broad rally sent all three major U.S. stock indexes to a sharply higher close overnight with chip stocks hitting a record high. Analysts currently expect third-quarter S&P 500 earnings growth, on aggregate, of 9.3% year-on-year, marking an improvement over their 8.8% growth estimate as of October 1. "We're quite bullish on equities as an asset class globally," said Mixo Das, Asia Equity and Quant Strategist at J.P. Morgan. "I think the biggest driver of this is simply the sort of policy easing that we're seeing … the economy is not anywhere close to being in a recession, and policy is still easing very aggressively. TAKAICHI WINS LOWER HOUSE VOTE TO BECOME JAPAN'S PM Hardline conservative Sanae Takaichi was set to become Japan's first female prime minister after winning a critical vote in parliament's lower house. Analysts expect Takaichi to be pro-stimulus and against further hikes in interest rates, a negative for the yen and bonds but a plus for equities. The yen was last 0.4% weaker at 151.39 per dollar, while also struggling against the euro and sterling. [FRX/] The Bank of Japan is due to meet next week with traders pricing in 20% chance of a hike, although Governor Kazuo Ueda has so far left his options open by offering few clues on the timing of a rate hike. Gold prices slipped 0.8% on the day but were still near the record high it has been around in the recent weeks. [GOL/] (Reporting by Ankur Banerjee; Editing by Sam Holmes and Kim Coghill)

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By Francesco Guarascio, Phuong Nguyen and Daniel Leussink HANOI/TOKYO (Reuters) -The Japanese government and some of the nation's top manufacturers have warned Vietnam that a planned ban on petrol-powered motorbikes in Hanoi could spark job losses and disrupt a $4.6 billion market that is dominated by Honda, according to documents reviewed by Reuters and seven people familiar with the matter. In July, Vietnamese Prime Minister Pham Minh Chinh issued a directive prohibiting petrol motorbikes from entering the centre of the capital from the middle of 2026, as the country seeks to reduce high levels of air pollution. Broader restrictions are due in 2028 and bans are expected to spread to other parts of the country. In response, the Japanese embassy in Hanoi sent a letter to Vietnamese authorities saying a sudden ban could "affect employment in supporting industries" such as motorcycle dealers and parts suppliers, according to a statement from the embassy summarising its letter. The embassy declined to share the full contents of the letter, which is being reported for the first time.  The embassy also urged Vietnamese authorities to consider an "appropriate roadmap" for electrification that would include a preparation period and staged implementation of regulations. The embassy declined to say when the letter was sent, although one Japanese government official said it was relayed in September.  Vietnam's two-wheeler market is one of the world's largest – worth an estimated $4.6 billion this year, according to market research firm Mordor Intelligence – with the number of registered motorbikes last year approaching 80% of the country's population of 100 million, one of the highest ownership rates globally. MANUFACTURERS WARN OF POTENTIAL BANKRUPTCIES The main trade group for foreign motorcycle makers in Vietnam, which is led by Honda and includes Yamaha and Suzuki, sent its own letter to the government in July warning that the ban could result in "production interruptions and the risk of bankruptcy" for companies in the supply chain, according to a copy of the letter reviewed by Reuters. The manufacturers said the ban could have "spillover effects" on hundreds of thousands of workers and cited potential disruptions for nearly 2,000 dealers and some 200 component suppliers.  They urged the implementation of a transitional period "with a minimum preparation time of two to three years" to allow time for them to adjust production lines while a network of charging stations and safety standards are expanded.  Vietnamese officials have thus far declined to act on the requests from the Japanese government and manufacturers, according to three people familiar with the discussions. These people, like others who spoke to Reuters, declined to be identified because of the sensitivity of the issue.  Vietnam's government did not respond to a request for comment. The government has said the ban is necessary to tackle high air pollution levels in Hanoi. Authorities in Ho Chi Minh City, Vietnam's largest metropolis, have also signalled plans to restrict petrol-powered vehicles. Addressing concerns about the switch to electric power, Prime Minister Chinh told Japanese executives in August that reducing emissions is a global issue requiring joint efforts "to choose the most optimal solution with a suitable roadmap," according to the government's online portal.  IN VIETNAM, HONDA IS SYNONYMOUS WITH MOTORBIKES Honda, which controls 80% of the two-wheeler market in Vietnam with 2.6 million vehicles sold last year, has led the charge to have authorities revise the directive, according to three of the people, all of whom attended or were briefed about meetings with the Vietnamese government and other officials in recent months. In private, one Honda representative raised the possibility that the company could consider scaling back its production in Vietnam in response, according to one of the people.  Honda said it was closely monitoring the situation, but had no plan to close factories. The Japanese manufacturer has four factories in Vietnam, where it is so dominant that its brand name has become a shorthand for "motorbike" in Vietnamese.  Almost all of the motorbikes it sells in Vietnam and elsewhere are powered by petrol. But it does also offer the CUV e: and ICON e: battery-powered models in the country. Honda's sales in Vietnam tumbled by almost 22% in August from July, the month the ban was unveiled, before recovering slightly in September. The company recorded double-digit sales declines from a year earlier in August and September. As Honda's automotive business has been squeezed by heightened competition due to a global shift to electric cars, it has become more reliant on its motorcycle business as a profit driver. VINFAST SALES ARE RISING – FAST Meanwhile, sales of electric motorbikes and e-bikes made by Nasdaq-listed Vietnamese firm VinFast rose 55% to nearly 70,000 in the second quarter of 2025 from the first quarter. They are expected to surge following the ban, according to a consumer survey conducted in September by market research firm Asia Plus. The proposed environmental measures have also had an impact on Vietnam's petrol car sales, which fell 18% in September from a year earlier for members of VAMA, the country's largest auto industry association, which includes several Japanese brands. Last month, VAMA said it did not expect a direct impact from the motorbike ban but acknowledged that "some customers are hesitant to buy new cars" following the government's announcements. Japanese carmaker Toyota is the market leader with more than a quarter of total car sales in September, according to data from VAMA. (Reporting by Francesco Guarascio and Phuong Nguyen in Hanoi, Daniel Leussink in Tokyo; Additional reporting by Maki Shiraki and Kentaro Okasaka in Tokyo, Khanh Vu in Hanoi; Editing by David Dolan and Thomas Derpinghaus.)

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By Anmol Choubey (Reuters) -Goldman Sachs flagged mounting risks to global supply chains of rare earths and other critical minerals, emphasising China's dominance in mining and refining, and outlining challenges for nations seeking to build independent supply chains. China expanded export curbs on rare earths on October 9, adding five new elements and extra scrutiny for semiconductor users ahead of an expected summit of leaders Donald Trump and Xi Jinping. CHINA'S SUPPLY CHAIN LEVERAGE In a note on Monday, Goldman Sachs said China controls 69% of global rare earth mining, 92% of refining, and 98% of magnet manufacturing. Rare earth elements (REEs) have become a flashpoint in geopolitics, as they are critical to high-tech industries and essential in uses from batteries to computer chips, artificial intelligence, and defence equipment. While the rare earth market was valued at $6 billion last year, just a fraction the size of the copper market, which is 33 times bigger, the bank warned that a disruption of 10% in industries reliant on REEs could result in $150 billion in lost economic output, besides inflationary pressures fed by the shortages. MINERALS COULD FACE EXPORT CURBS Goldman Sachs flagged samarium, graphite, lutetium, and terbium as particularly vulnerable to export curbs. Samarium, used in heat-resistant samarium-cobalt magnets, is key for aerospace and defense. Disruptions in supply of widely-used lutetium and terbium also pose risks of GDP losses. The bank highlighted light rare earths, such as cerium and lanthanum, as future targets for curbs, since China has a dominant role in refining and mining. Western producers like Lynas Rare Earths and Solvay could ease shortages, it added, but reliance on China remains substantial. CHALLENGES TO INDEPENDENT SUPPLY CHAINS Countries are scrambling to build independent REE and magnet supply chains, but Goldman Sachs saw barriers from geological scarcity to technological complexity and environmental challenges. It said heavy rare earth elements were particularly scarce outside China and Myanmar, with most known deposits being small, lower-grade, or radioactive, while developing new mines requires eight to 10 years. Refining REEs requires advanced expertise and infrastructure, with builds typically taking five years, the bank said. Additionally, magnet production outside China, though expanding in the U.S., Japan, and Germany, faces constraints because of China's control of critical inputs such as samarium. INVESTMENT AND COMMODITY RISKS Goldman Sachs suggested equities as a way for investors to manage rare earth disruption risks, citing Iluka Resources, Lynas Rare Earths, and MP Materials Corp as key players. The bank forecast a deficit in supplies of Neodymium-Praseodymium Oxide (NdPrO), critical for making magnets, Beyond rare earths, Goldman Sachs warned that commodities such as cobalt, oil, and natural gas faced rising risks of supply disruptions due to geopolitical tension. (Reporting by Anmol Choubey in Bengaluru; Editing by Clarence Fernandez)

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By Andrea Shalal and Jarrett Renshaw WASHINGTON (Reuters) -U.S. President Donald Trump said on Monday he expects to reach a fair trade deal with Chinese President Xi Jinping and downplayed risks of a clash over the issue of Taiwan, even as his top trade negotiator accused Beijing of engaging in "economic coercion." Trump suggested to reporters that China had no designs on invading Taiwan but acknowledged he expected the issue to be on the agenda at a planned meeting with Xi on the sidelines of an economic conference in South Korea next week. Trade tensions between the U.S. and China, the world's two biggest economies, have lingered. Disputes over tariffs, technology and market access remain unresolved days before the meeting. Trump spoke at the start of a meeting with Australian Prime Minister Anthony Albanese where the two signed a critical minerals agreement aimed at countering China. TRUMP SAYS CHINA DOESN'T WANT TO INVADE TAIWAN Trump's comments on Taiwan reflect one of the most sensitive issues in U.S.-China relations. Beijing has repeatedly pressed Washington to alter the language it uses when discussing its position on Taiwanese independence. Trump pledged to accelerate deliveries of nuclear submarines to Australia and was asked if U.S. actions in the waters of the Indo-Pacific were a sufficient deterrent to keep Xi from invading Taiwan. "China doesn't want to do that," Trump said, before boasting about the size and strength of the U.S. military.  He added: "We have the best of everything and nobody is going to mess with that … I think we'll end up with a very strong trade deal. Both of us will be happy." But U.S. Trade Representative Jamieson Greer took a tougher line later in the day, warning the U.S. would respond with unspecified action to what he called a "broader pattern of economic coercion" by Beijing against firms that make strategic investments in critical U.S. industries. Officials in South Korea said last week that China's sanctions on U.S.-linked units of shipbuilder Hanwha Ocean threatened to impact ambitious plans for shipbuilding cooperation between Seoul and Washington. "Attempts at intimidation will not stop the United States from rebuilding its shipbuilding base and responding appropriately to China's targeting of critical industrial sectors for dominance," Greer said in a statement. TRUMP SAYS TAIWAN COULD COME UP IN CHINA TALKS  Asked by a reporter whether the U.S. might adjust its position on Taiwan independence in order to reach a trade deal with China, Trump said, "We're going to be talking about a lot of things. I assume that will be one of them, but I’m not going to talk about it now." Speaking in Taipei, Wang Liang-yu, head of the Taiwan foreign ministry's North American Affairs Department, said Taiwan-U.S. communication is "quite smooth", and that since Trump took office, the U.S. has repeatedly reiterated its support for Taiwan. "The foreign ministry will continue to closely pay attention to relevant developments and will maintain communication with the U.S. side to ensure Taiwan-U.S. relations continue to deepen in a stable way and that our interests can really be guaranteed," she added. Beijing has ramped up a campaign of military and diplomatic pressure on democratically governed Taiwan, which it views as its own territory. China has never renounced the potential use of force to bring Taiwan under its control. The United States is Taiwan's most important international backer and arms supplier despite the lack of formal diplomatic ties. Beijing regularly denounces any shows of support for Taipei from Washington.      (Reporting by Andrea Shalal in Washington and Jarrett Renshaw in Philadelphia; Additional reporting by Ben Blanchard in Taipei; Editing by Trevor Hunnicutt, Matthew Lewis and Lincoln Feast.)

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By Nick Carey and Christina Amann LONDON/BERLIN (Reuters) -Global automakers are scouring the globe for crucial rare earths ahead of looming Chinese export controls, with executives worried they could lead to parts shortages and plant closures. Rare earth magnets power motors in car parts such as side mirrors, speakers, oil pumps, windshield wipers and fuel leakage and braking sensors. They play an even bigger role in EVs. While a U.S.-China deal diverted a supply threat, stockpiles were depleted by similar restrictions earlier this year, while Beijing has also made it harder to get export licenses. China has since dramatically expanded export curbs, with companies facing global supply shortages. Consultancy AlixPartners estimates China controls up to 70% of global rare-earths mining, 85% of refining capacity and about 90% of rare-earths metal alloy and magnet production.  The new Chinese export control list includes elements like ytterbium, holmium and europium, also used in making cars. "The situation is very tense," said Nadine Rajner, CEO of German metal-powder supplier NMD, adding customers want to source rare earths from anywhere but China. Rajner said that while there are plenty of rare earths available in countries like Sweden, they do not have the mines or refining capacity to make them usable. And for heavy rare earths, China controls 99.8% of global refining capacity, making alternative sources negligible. "We are pretty much sold out and have limited stocks," Rajner said.  Rare earths can be recycled from old cars, but that industry is in its infancy. Neutral, a Renault-backed company, currently recycles rare earths from 400,000 cars a year in France and has contracts with 15 brands in Europe. But "the challenge is scaling up these activities," said Neutral CEO Jean-Philippe Bahuaud.     'ALREADY BEEN DEPLETED' Even if Chinese suppliers can fulfil fresh orders before the November 8 export controls take effect, the journey by sea to Europe can take 45 days and the threat of a rare earth bottleneck is among several headaches facing the auto industry. China has also placed export restrictions on lithium-ion batteries and battery materials, triggering concerns over parts supplies for electric vehicles. And last week, an intellectual-property dispute between China and the Netherlands involving little-known Dutch chip-maker Nexperia, sparked fears of factory closures because it supplies a large amount of chips car parts and components. Automakers also face the challenge of U.S. tariffs and are expected to detail the costs in their third-quarter earnings.  But China's hold over the industry through its control of rare earths ranks among the thorniest problems. "They can shut us down in two months, the entire auto industry," said Ryan Grimm, Toyota Motor's North America group vice president of purchasing supplier development. Bruno Gahery, president for France, Benelux, West and South Europe at supplier Bosch, said he expected the autos industry to "overstock rare earths" ahead of the deadline. But an executive at a magnet supplier for Hyundai said that while it built inventories earlier this year, "most have already been depleted" and supplies are tight. Some Chinese rare earths exporters received a rush of orders from overseas clients immediately after new export controls were announced on October 9, three industry sources told Reuters. RARE EARTH FREE MOTORS  Automakers are taking steps to reduce their reliance. Some such as General Motors and major suppliers such as ZF and BorgWarner are developing EV motors with low-to-zero rare-earth content, while BMW and Renault have produced rare earth-free motors.  Monumo has used AI and deep-tech simulation to help clients cut rare earth content in motors already in production, which CEO Dominic Vergine said has led to an average reduction of 24% among the UK firm's customers, which include several of the world's top 10 carmakers, he said.  Automakers are also pushing hard to improve rare earth-free motors for the next generation of EVs. Yet most of those motors are years away, as are efforts to develop new rare earth mines and processing plants outside China, which Beijing can undermine by keeping prices low, industry experts say.  Experts say the U.S government is taking the threat far more seriously than Europe. Andy Leyland, co-founder of supply chain specialist SC Insights, said Beijing has focused on beating others on price and will continue to do so. "The Chinese can always undercut them," he said of efforts to develop rare-earth free motors, adding that faced with cheaper motors with rare earth magnets automakers may find it hard to justify more expensive components.  "So it's a really risky investment."  Meanwhile, China is expected to keep exerting its power over supplies of rare earths. "This is not the end of export controls," said Jan Giese, a senior manager at rare-earth trader Tradium.  (Reporting by Nick Carey and Christina Amann; additional reporting by Gilles Guillaume in Paris and Beijing Newsroom; editing by Mike Colias and Alexander Smith)

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By Ashitha Shivaprasad and Sam Li (Reuters) -Oil prices fell for a second day on Tuesday as concerns about excess supply and risks to demand stemming from tensions between the U.S. and China, the world's top two oil consumers, weigh on the market. Brent crude futures fell 17 cents, or 0.28%, at $60.84 a barrel at 0343 GMT. The U.S. West Texas Intermediate crude (WTI) contract for November delivery, set to expire on Tuesday, eased 0.52% to $57.22. The more active December contract was down 19 cents, or 0.33%, at $56.83. Prices declined to their lowest since early May in Monday's session on the concerns about slowing economic growth from the recent escalations in the U.S.-China trade dispute. Both WTI and Brent have shifted to contango market structures, where prices for immediate supply are lower than for later delivery and which typically indicates that near-term supply is abundant and demand weakening. Prices have slumped as the Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia, known as OPEC+, have pushed ahead with plans to add more oil to the market. This has led analysts to predict a surplus of crude this year and next, with the International Energy Agency last week projecting a global surplus of nearly 4 million barrels per day in 2026. "The continued weakening of Brent's monthly spread structure indicates that the pressure from oversupply in the crude oil market is gradually materializing," analysts from China's Haitong Securities said in a note on Tuesday. "This will dampen market expectations and curb investors' willingness to chase gains, limiting the potential for oil prices to rebound." The current pessimistic outlook for oil is likely to extend into 2026, with analysts at Goldman Sachs saying on Tuesday they forecast Brent prices may drop to $52 a barrel by the fourth quarter of next year. The Goldman analysts attributed the past week's slump in Brent prices to indications "the long-anticipated global surplus has started to show" in satellite data on global oil stockpiles and inventory data from the IEA and the Energy Information Administration in the U.S. Expectations are that U.S. crude oil stockpiles likely rose last week, a preliminary Reuters poll on Monday showed, ahead of weekly reports from the American Petroleum Institute and the EIA. [EIA/S] (Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Sonali Paul and Christian Schmollinger)

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A look at the day ahead in European and global markets from Ankur Banerjee And just like that, worries about credit risks are in the rear view. Investors are feeling perky, betting that tensions between the U.S. and China will ease, the Fed will cut rates next week and the earnings season will be strong. That – let's call it optimism – has pushed stocks across Asia-Pacific to record peaks, with Japan's Nikkei just shy of a landmark 50,000 points. Tech-heavy Taiwan and South Korea stocks have also hit record highs after strong overnight gains from U.S. tech shares led by Apple. Hardline conservative Sanae Takaichi is set to be voted in as Japan's first female prime minister later on Tuesday and her appointment continues to push Japanese shares higher on hopes that her pro-stimulus plans will be good for equities. An acolyte of former Prime Minister Shinzo Abe, Takaichi is expected to appoint another Abe protege, Satsuki Katayama, to the post of finance chief, local media reported. That may be bad news for yen bears as Katayama has suggested the yen's real value is closer to 120-130 per dollar. The yen was last at 151.07. Over in Europe, the economic calendar is pretty bare and that could be a good thing for risk assets as they take cues from the prospect of the Federal Reserve lowering rates. Traders are ascribing a 98.3% chance of a 25 basis point cut next week. Meanwhile, investors are also taking comfort from the latest comments from U.S. President Donald Trump on China. Trump said he expects to reach a fair trade deal with Chinese President Xi Jinping as he gears up for a planned meeting with Xi on the sidelines of an economic conference in South Korea next week. Next week is shaping up to be news heavy with the spotlight on central bank meetings in the U.S. and Japan as well as the meeting between Trump and Xi. With earnings season in full stride, traders will not only keep an eye on big bellwethers but also parse through reports from regional banks after a turbulent last week where worries over rising credit risk hit sentiment. Some of the firms reported earnings on Monday with investors relatively comforted by the results. Key developments that could influence markets on Tuesday: Earnings: Unicredit, L'Oreal (By Ankur Banerjee in Singapore; Editing by Sam Holmes)

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