InvestMacro

On Tuesday, US stock indices continued their ascent. The Dow Jones (US30) Index rose by 0.34%. The S&P 500 (US500) gained 0.23%. The technology-heavy Nasdaq (US100) closed up by 0.74%. All three indices set new historical highs amid expectations that the Fed would cut its rate by 25 basis points (bps) on Wednesday, a move the markets have almost entirely priced in.

Nvidia climbed 8% after announcing a $1 billion strategic investment in Nokia, which reinforces expectations for continued demand for chips and network infrastructure. UPS rose 8.1% thanks to an earnings report that beat analysts’ expectations. Microsoft jumped 2.3% after securing a landmark agreement with OpenAI, strengthening its commercial position in the AI sector.

Today, the US Federal Reserve (Fed) will hold its monetary policy meeting. The market is almost certainly expecting a 25 bps cut to the key interest rate. However, this decision is already priced in, so the main focus for investors will be on Powell’s press conference and the updates to the dot plot. A downward shift in the median outlook for the year-end rate level would increase the probability of additional cuts.

The Canadian dollar strengthened above 1.40 CAD per USD, remaining near its monthly highs. Markets have already priced in a 25 bps rate cut from both the Fed and the Bank of Canada (BoC) this week. Despite the overall easing, Canada maintains an advantage in real yield. Analysts believe that today’s BoC cut could be the final one in the current cycle, and the regulator’s rhetoric is likely to be neutral or slightly “hawkish” to keep inflationary expectations under control and support confidence amid an unemployment rate of 7.1%.

European stock markets traded with mixed dynamics yesterday. Germany’s DAX (DE40) fell by 0.12%, France’s CAC 40 (FR40) closed down 0.27%, Spain’s IBEX35 (ES35) gained 0.54%, and the UK’s FTSE 100 (UK100) closed 0.44% higher. The FTSE 100 set a new record high on Tuesday, supported by a rally in the banking, commodity, and defence sectors. HSBC led the gains, adding over 4% following strong quarterly results and a raised profitability outlook.

WTI crude oil declined for a third straight day amid sanctions and supply concerns. Last week, Washington imposed sanctions on major Russian oil companies (Rosneft and Lukoil) which led traders to closely monitor for potential supply disruptions. Indian refiners temporarily paused new orders for Russian oil. However, doubts persist in the market that the restrictions will be able to offset the oil surplus, as OPEC+ is considering another production increase at its upcoming meeting.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) dropped 0.58%, China’s FTSE China A50 (CHA50) rose by 0.75%, Hong Kong’s Hang Seng (HK50) fell by 0.33%, and Australia’s ASX 200 (AU200) posted a negative result of 0.48%.

The Australian dollar strengthened, reaching a three-week high, after fresh inflation data came in noticeably higher than prognoses and reduced expectations for an imminent policy easing by the Reserve Bank of Australia (RBA). Annual inflation accelerated to 3.5% in September, up from 3% in August and above the consensus projection of 3.1%, marking the highest level since July 2024. Against this backdrop, traders sharply cut bets on interest rate cuts. Markets are now pricing in a 90% probability that the RBA will keep the key interest rate at 3.6% on November 4th.

The Dow Jones Index (US30) rose by 0.71% by the end of Monday. The S&P 500 Index (US500) gained 1.23%. The Technology Index Nasdaq (US100) closed higher by 1.86%. Major Wall Street indices finished Monday with sharp gains after US and Chinese officials reported reaching a preliminary trade agreement during talks held over the weekend in Malaysia. The final details of the deal are expected to be agreed upon on Thursday at a summit between Presidents Donald Trump and Xi Jinping during the ASEAN conference. The US Treasury Secretary stated that the agreement means removing the threat of introducing 100% tariffs on Chinese imports, which were supposed to take effect on November 1, from the agenda. In turn, China agreed to refrain from restricting the export of rare earth metals for at least one year.

European stock markets were mostly up yesterday. Germany’s DAX (DE40) rose by 0.28%, France’s CAC 40 (FR40) closed with a gain of 0.16%, Spain’s IBEX35 (ES35) climbed by 0.87%, and the UK’s FTSE 100 (UK100) closed up 0.09%. Negotiations between the European Union and a Chinese delegation regarding Beijing’s new restrictions on rare earth metal exports will take place in Brussels this week, as Europe seeks to protect its industrial base and reduce dependence on Chinese raw materials. European Commission President Ursula von der Leyen stated that the EU will accelerate efforts to diversify supplies and conclude new critical mineral supply agreements with partners, including Ukraine, to reduce dependence on China and protect strategic industries.

WTI crude oil prices fell on Tuesday, marking the third consecutive session of decline, as concerns about market oversupply intensified following signals that OPEC+ might consider increasing production as early as December. Saudi Arabia is leaning towards a moderate production increase, aiming to regain market share, while the group of oil producers is set to meet on Sunday.

Platinum prices pulled back slightly from the three-week high reached in mid-October. Pressure on the metal came from a decrease in demand for safe-haven assets, as signs of progress in US-China trade negotiations boosted investors’ risk appetite. Despite the correction, platinum has appreciated by nearly 50% since the start of the year, outperforming gold and silver, thanks to constrained supply, robust industrial demand, and growing interest from investors seeking diversification amid geopolitical uncertainty.

Asian markets traded with mixed dynamics yesterday. Japan’s Nikkei 225 (JP225) rose by 2.46%, China’s FTSE China A50 (CHA50) gained 1.10%, Hong Kong’s Hang Seng (HK50) was up 1.05%, while Australia’s ASX 200 (AU200) showed a negative result of 0.19%.

US President Donald Trump and Japanese Prime Minister Sanae Takaichi signed a framework agreement on securing the supply of critical minerals and rare earth elements, aimed at reducing dependence on China and strengthening strategic supply chains. The agreement is part of a broader Washington initiative to reduce reliance on China, which controls over 90% of global rare earth element processing. On Thursday, Donald Trump will meet with Chinese President Xi Jinping to discuss trade relations and strategic stability issues.

The Australian dollar reached its highest level in nearly three weeks on Tuesday, thanks to a weaker US dollar. The American currency declined as markets had almost fully priced in an expected 25 basis point rate cut by the Fed, while optimism surrounding a potential US-China trade deal reduced demand for safe-haven assets. Domestically, investors’ attention is focused on the upcoming release of third-quarter inflation data and the monthly Consumer Price Index for September, due out on Wednesday, which may provide new signals regarding future moves by the Reserve Bank of Australia (RBA). RBA Governor Michele Bullock warned that a sudden reversal of optimism in global financial markets could trigger financial instability and accelerate the process of cutting interest rates.

On Friday, the Dow Jones Index (US30) rose by 1.01% (for the week, +1.93%). The S&P 500 Index (US500) gained 0.79% (for the week, +1.52%). The Technology Index Nasdaq (US100) closed higher by 1.04% (for the week, +1.47%). All three stock indices closed at new record highs on Monday, after soft US inflation data fueled expectations for Federal Reserve interest rate cuts later in the year and injected optimism into investor sentiment. The US Consumer Price Index (CPI) report for September (+0.3% m/m and +3.0% y/y) was slightly weaker than market expectations (+0.4% m/m and +3.1% y/y). Furthermore, the core CPI report for September (+0.2% m/m and +3.0% y/y) was also weaker than market expectations (+0.3% m/m and +3.1% y/y). A decline in inflation “without sacrificing growth” is perceived as the ideal scenario for a bull market.

On the corporate front, shares of AMD and IBM jumped by 7.5% and 8.8% respectively, following the announcement of the successful launch of IBM’s quantum error correction algorithm on AMD chips, a major step for the development of quantum computing that sparked a positive reaction across the sector. Intel rose by 1.6% after returning to profitability and publishing an optimistic prognosis. The banking sector also strengthened amid expectations that monetary policy easing would stimulate lending activity.

US President Donald Trump stated on Saturday that he is raising tariffs on goods from Canada by another 10%, over and above what they currently pay. The US Department of Commerce, the White House, and the Canadian Prime Minister’s Office have not yet commented on the situation. Experts note that this move could complicate bilateral trade relations, especially amidst existing disputes.

European equity markets were mostly up on Friday. Germany’s DAX (DE40) rose by 0.13% (for the week, +0.85%), France’s CAC 40 (FR40) closed down by 0.01% (for the week, +0.15%), Spain’s IBEX35 Index (ES35) gained 0.44% (for the week, +0.79%), and the UK’s FTSE 100 (UK100) closed 0.70% higher (for the week, +3.11%).

WTI crude oil prices reached their highest level in over two weeks on Monday, as an improved outlook for a US-China trade deal raised expectations for an increase in global energy demand. US Treasury Secretary Scott Bessent stated that negotiations with Chinese Vice Premier He Lifeng had led to “substantial progress,” which would be solidified at a meeting between Presidents Trump and Xi Jinping at the end of the week. Beijing confirmed that a preliminary consensus was reached on a number of key topics. Oil prices received additional support from supply concerns regarding Russia, following the sanctions imposed last week against Rosneft and Lukoil, which together account for about 50% of oil production in Russia and around 25% of its exports.

Asian markets traded with mixed dynamics last week. Japan’s Nikkei 225 (JP225) rose by 2.00%, China’s FTSE China A50 (CHA50) gained 3.23%, Hong Kong’s Hang Seng (HK50) was up by 1.07%, while Australia’s ASX 200 (AU200) showed a negative result of 0.07% for the past week. Asian stocks opened with solid gains on Monday. Negotiators from the US and China stated that they had reached a consensus on key issues, including export controls. Further support for the market came from data published on Monday showing that China’s industrial profits grew by 21.6% y/y in September, the fastest growth since November 2023, strengthening investor confidence in a sustained recovery of the industrial sector.

In Australia, investors focused on the anticipated Q3 inflation data and the monthly CPI for September, which could be pivotal for the Reserve Bank of Australia’s (RBA) next steps. Analysts estimate that the RBA is close to achieving its inflation and employment targets, but new data might reveal persistent price pressures. If the figures confirm sustained growth in consumer prices, it could lead the central bank to refrain from further policy easing at its meeting next week.

The Dow Jones Index (US30) rose by 0.31% by the end of Thursday. The S&P 500 Index (US500) gained 0.58%. The tech-heavy Nasdaq Index (US100) closed higher by 0.89%. US stock indices advanced on Thursday, bolstered by a rally in energy stocks after WTI crude oil prices jumped more than 5%. The sharp rise in oil quotes followed the US decision to blacklist Russia’s largest oil producers, raising fears about a reduction in global crude supply.

The US government shutdown continues into its fourth week. Due to the shutdown, the release of official reports is frozen, including weekly data on initial jobless claims for the past four weeks and the September employment report. The September consumer price report, which was scheduled for release last Wednesday, will only be published this Friday if the government resumes operations. Economists note that the prolonged shutdown could severely impact consumer spending and economic growth in Q4, increasing pressure on the Fed and the White House to quickly resolve the budget crisis.

According to preliminary data, Canadian retail sales in September 2025 fell by 0.7% compared to the previous month, marking the third-largest drop this year. This followed a 1% growth in August.

European stock markets rose on Thursday. The German DAX (DE40) advanced by 0.23%, the French CAC 40 (FR40) closed higher by 0.23%, the Spanish IBEX35 Index (ES35) gained 0.07%, and the British FTSE 100 (UK100) closed up by 0.67%.

Silver (XAG/USD) fell to $48.6 per ounce on Friday, losing more than 6% over the week. Investors were booking profits after the rapid rise in recent weeks. Earlier, silver prices had reached multi-year highs amid strong demand for safe-haven assets and optimism about long-term industrial use.

WTI crude oil prices hit a two-week high on Thursday. The increase was driven by the US and the European Union intensifying sanctions against Russian energy and infrastructure, which caused severe disruptions to Russia’s oil production and exports and fueled concerns about a potential reduction in global supply. The new restrictions limited Russia’s access to offshore drilling technology and equipment, which could lead to a long-term decline in production.

US natural gas prices (XNG/USD) fell below $3.4 per MMBtu on Thursday amid EIA data pointing to excess supply. For the week ending October 17, the storage injection volume was 87 billion cubic feet (bcf), significantly exceeding market expectations (83 bcf). As a result, total inventories are now substantially above normal (4.5% above the five-year average), creating a bearish sentiment in the market.

Asian markets were mostly higher yesterday. Japan’s Nikkei 225 (JP225) fell by 1.35%, China’s FTSE China A50 (CHA50) rose by 0.24%, Hong Kong’s Hang Seng (HK50) gained 0.72%, and Australia’s ASX 200 (AU200) showed a positive result of 0.03%. Investor sentiment improved after the White House confirmed that US President Donald Trump would meet with Chinese leader Xi Jinping on October 30. On the mainland market, stocks rose for a second consecutive session after the Chinese Communist Party pledged to step up measures to stimulate domestic demand, improve living standards, and support the country’s technological independence. In Hong Kong, data showed that annual inflation remained at 1.1% in September, with authorities noting stable prices and a moderate inflation outlook.

The International Monetary Fund (IMF) on Friday urged Asian countries to reduce non-tariff barriers and strengthen regional trade integration to boost the region’s resilience to US tariffs. The report stated that trade remains a key driver of the region’s economic growth, and China plays a central role in global manufacturing supply chains, which, however, makes Asia vulnerable to geopolitical and trade risks.

The Dow Jones Index (US30) fell by 0.71% by the end of Wednesday. The S&P 500 Index (US500) declined by 0.53%. The tech-heavy Nasdaq Index (US100) closed lower by 0.93%. Investors evaluated mixed corporate earnings reports and new trade risks following reports that the White House is considering restricting the export of American software to China.

Among corporate results: Netflix (NFLX) lost 10% after publishing results that were pressured by a tax dispute in Brazil. Tesla (TSLA) fell by 1.4% ahead of its earnings report following reports that some new models might suddenly lose battery charge.

The Mexican peso (MXN) continues to be in demand among investors, despite a slowdown in economic activity. Even after the latest key rate cut, the country continues to offer one of the highest real yields among emerging markets, which supports the carry trade and stimulates the inflow of foreign portfolio investments.

European stock markets traded mixed on Wednesday. The German DAX (DE40) dropped by 0.74%, the French CAC 40 (FR40) closed lower by 0.63%, the Spanish IBEX35 Index (ES35) rose by 0.09%, and the British FTSE 100 (UK100) closed up by 0.93%. The EU is preparing to approve the 19th package of sanctions against Russia, while the US is also preparing to strengthen sanctions due to Russia’s unwillingness to enter into peace negotiations.

WTI crude oil prices rose by more than 2% on Wednesday and gained another 3% on Thursday following reports of new US sanctions against Russian oil companies. Washington imposed a ban on cooperation with Rosneft and Lukoil, increasing pressure on Moscow for refusing to participate in peace negotiations on Ukraine. These companies account for about half of Russia’s oil exports, and energy export revenues form about a quarter of Russia’s federal budget.

Asian markets declined yesterday. Japan’s Nikkei 225 (JP225) fell by 0.02%, China’s FTSE China A50 (CHA50) rose by 0.01%, Hong Kong’s Hang Seng (HK50) fell by 0.94%, and Australia’s ASX 200 (AU200) showed a negative result of 0.70%.

Bank Indonesia (BI) unexpectedly left its benchmark interest rate unchanged at 4.75% after its October 2025 meeting, following three consecutive cuts. The decision reflects the central bank’s confidence that inflation in 2025-2026 will remain within the target range of 1.5-3%, supported by a stable Rupiah exchange rate. According to the latest data, Indonesia’s GDP grew to 5.12% y/y in Q2, the fastest pace in two years, while annual inflation accelerated to 2.65% in September, the highest since May 2024.