Daily Market Outlook, October 24, 2025 

Patrick Munnelly, Partner: Market Strategy, Tickmill Group

Munnelly’s Macro Minute…

Asian stock markets saw a spirited rally on Friday, driven by a surge in technology shares after a meeting between Donald Trump and Xi Jinping eased fears of a potential trade war. The MSCI index tracking Asian markets climbed about 0.5%, continuing its impressive run this year that has propelled it to record highs. Among the standout performers were tech stocks, with South Korean chipmaker SK Hynix soaring by as much as 6.9%.Optimism extended beyond Asia, as U.S. and European equity futures also posted gains. Intel shares jumped during post-market trading on Thursday in New York, buoyed by an upbeat revenue forecast. In China, semiconductor stocks spearheaded the rally, reflecting the nation’s growing focus on technological independence. The STAR 50 Index, heavily weighted toward tech companies, surged over 3%.  Japan's primary inflation gauge has climbed, driven by soaring energy prices. This development sets the Bank of Japan (BoJ) on a path toward further interest rate hikes while also presenting a significant challenge for newly appointed Prime Minister Takaichi. Meanwhile, French President Emmanuel Macron has urged EU leaders to consider deploying the bloc’s most powerful trade measures against China. This comes as tensions rise over Beijing's proposed export restrictions on vital raw materials, with negotiations at a standstill.

In the United States, the number of applications for unemployment benefits saw an uptick last week, according to an analysis of unadjusted state-level data released amidst the ongoing federal government shutdown. Oil prices edged lower ahead of U.S. inflation data, while the Dollar index ticked upward and gold prices retreated. The Canadian Dollar took a sharp hit after Trump announced an end to trade negotiations with Canada, citing an anti-tariff campaign funded by Ontario's government.

UK retail sales showed strong performance in September, with headline sales up 0.5% m/m and ex-fuels rising 0.6%, both outperforming forecasts of -0.4% and -0.6%. This marked a fourth consecutive monthly gain, supported by mild upward revisions, pushing y/y growth to 1.5% (from 0.7%) and ex-fuels to 2.3% (from 1.3%). The rise in volumes occurred despite price increases, with deflators at 1.6% and 1.7% y/y. Food volumes rose 0.5% m/m, and discretionary goods saw strong demand, with notable interest in gold aiding non-store retailers. These solid figures suggest consumers are adapting pragmatically, and once budget uncertainties ease, further improvement is possible.

The release of September's CPI data by the BLS is a rare exception, as all other reports remain on hold until regular US government operations resume. Staff were specifically recalled to ensure this report met "statutory deadlines necessary to guarantee accurate and timely payment of government benefits." Despite the limited context, the data remains highly relevant for both the markets and the Federal Reserve. Following August's unexpected inflation uptick, analysts have adjusted their forecasts slightly higher. Headline inflation is now expected to rise by 0.4% month-over-month, with core inflation projected to increase by 0.3% month-over-month. This would elevate the annual CPI to 3.1% from 2.9%, while the core rate would remain steady at 3.1%. Base effects, particularly for gasoline, aren't offering much relief this time. Additionally, the recreation and shelter categories are likely to show some strengthening. However, these factors seem to be largely accounted for in the current median estimates. The real potential for surprises lies in food prices (downside risk) and tariff-sensitive components (upside risk). With the market lacking the September payrolls report, any unexpected inflation data could trigger significant reactions. Still, even an upside surprise is unlikely to derail expectations for another Fed rate cut next week. Prior to the blackout period, FOMC officials consistently emphasized labor market risks over inflation concerns.

Despite the ongoing US government shutdown, the week ahead promises plenty of action. In the Eurozone, things kick off with Germany's IFO survey and the region's money and credit data on Monday. On Tuesday, the ECB releases its Bank Lending Survey alongside negotiated wage data. Midweek, the focus shifts to preliminary Q3 GDP figures, starting with Spain on Wednesday, followed by France, Italy, and Germany on Thursday. Flash October inflation data will begin to trickle in from Thursday, culminating in the Eurozone-wide release on Friday. However, the highlight of the week will be Thursday’s ECB meeting, where the deposit rate is expected to remain at 2%. The spotlight will be on how recent weak economic activity is influencing the Governing Council’s views on growth and inflation. Across the Atlantic, it’s also an important week with the FOMC meeting. A 25 basis point rate cut is anticipated, but all eyes will be on Powell’s press conference, where he’ll weigh inflation concerns—armed with September CPI data—against labor market risks. Without the shutdown, we might have seen the advanced Q3 GDP and PCE reports, but those now appear unlikely. Elsewhere, the Bank of Canada announces its rate decision on Wednesday, with markets expecting a 25 basis point cut to 2.25%. Over in Japan, the Bank of Japan is likely to hold rates at 0.5% on Thursday, as political uncertainty remains too high for any changes, despite inflationary pressures suggesting otherwise. For the UK, key data includes Wednesday’s money and credit figures, with the week wrapping up on a business sentiment note via the Lloyds Business Barometer.

Overnight Headlines

  • Chinese Stocks Climb On Policy Readout, Xi-Trump Meeting

  • Trump To Meet With Xi Next Week Thursday

  • Trump Says All Trade Talks With Canada Are Terminated

  • Ultralong JGB Yields Cool As Takaichi Allays Investors’ Fiscal Fears

  • Japan’s Takaichi Expected To Bolster Inflation Response, Defense

  • Japan CPI Edges Higher, Matching Forecasts As ‘Core-Core’ Gauge Eases

  • Bank Reserves Fall Second Week, Extend Drop Below $3 Trillion

  • UK Govt Considers Watering Down Late Payment Rules For Big Firms

  • EU Takes Small Step Towards Using Russian Assets For Ukraine

  • Oil Supply Glut Paves Way For Trump To Tighten Screws On Russia

  • Intel Shows Progress In First Earnings Report Since US Investment

  • Ford Cuts Guidance, Warns Of $2B Profit Blow From Supplier’s Plant Fire

  • GSK’s Blood Cancer Drug Blenrep Wins US Regulatory Approval

  • Applied Materials To Cut 4% Of Global Workforce

  • Target Cuts 1,800 Corporate Jobs In Its First Major Layoffs In A Decade

  • Anthropic Expands Google Cloud Partnership To Access 1M Chips

  • Trump Pardons Convicted Binance Founder ‘CZ’ Zhao

FX Options Expiries For 10am New York Cut 

(1BLN+ represents larger expiries, more magnetic when trading within daily ATR)

  • EUR/USD: 1.1500-05 (936M), 1.1520-30 (1.3BLN), 1.1550 (442M)

  • 1.1645-50 (1.1BLN), 1.1665-70 (750M), 1.1680 (477M), 1.1700 (782M)

  • 1.1720-25 (720M)

  • EUR/CHF: 0.9300 (350M). GBP/USD: 1.3250 (210M)

  • AUD/USD: 0.6450 (1.8BLN). AUD/NZD: 1.1325 (375M)

  • USD/JPY: 151.75-85 (402M), 152.00 (493M), 152.50 (484M), 153.80 (276M)

CFTC Positions as of the Week Ending 9/10/25 

  • October 1, 2025: During the shutdown of the federal government, Commitments of Traders Reports will not be published

Technical & Trade Views

SP500

  • Daily VWAP Bullish

  • Weekly VWAP Bullish

  • Above 6650 Target 6800

  • Below 6600 Target 6400

EURUSD 

  • Daily VWAP Bearish

  • Weekly VWAP Bearish

  • Below 1.16 Target 1.1450

  • Above 1.1650 Target 1.18

GBPUSD 

  • Daily VWAP Bearish

  • Weekly VWAP Bearish

  • Below 1.34 Target 1.31

  • Above 1.3450 Target 1.3530

USDJPY 

  • Daily VWAP Bullish

  • Weekly VWAP Bullish

  • Below 150 Trgaet 148.5

  • Above 151 Target 154

XAUUSD

  • Daily VWAP Bearish

  • Weekly VWAP Bullish

  • Above 4200 Target 4500

  • Below 4050 Target 3950

BTCUSD 

  • Daily VWAP Bullish 

  • Weekly VWAP Bearish

  • Above 107k Target 116k

  • Below 106k Target 100k