Daily Market Outlook, October 27, 2025 

Patrick Munnelly, Partner: Market Strategy, Tickmill Group

Munnelly’s Macro Minute…

Global stocks continued their record setting rally, fuelled by growing optimism that the United States and China are edging closer to finalising a trade deal. This positive sentiment also drove sharp gains in copper and crude oil prices. Meanwhile, Treasuries saw a pullback across the board, and gold lost ground as demand for safe-haven assets waned. The MSCI World Index climbed 0.2% to hit yet another all-time high, bolstered by record-breaking performances in Japan, South Korea, and a broader index tracking Asian equities. Futures for the S&P 500 and Nasdaq 100 advanced after both benchmarks closed last week at historic highs. Copper, often seen as an indicator of global economic health, surged alongside oil, reflecting expectations that a US-China trade agreement could boost demand. European stock futures also hinted at a stronger opening. The Australian and New Zealand dollars, commonly viewed as proxies for exposure to China’s economy, strengthened amid the risk-on sentiment. As investor confidence soared, gold slid to approximately $4,080 per ounce, while the yield on the 10-year Treasury note rose four basis points to 4.04%. Soybean prices also rallied on hopes that agricultural trade between Washington and Beijing might soon resume. After months of uncertainty, easing trade tensions between the world’s two largest economies have reignited appetite for risk-taking and added fuel to the equity rally that began after April’s market slump. However, investors face a pivotal week ahead with the Federal Reserve’s upcoming policy decision and a wave of US tech earnings poised to reveal whether corporate profit growth can hold its momentum. Reports suggest that top negotiators from the US and China have reached consensus on several critical issues, clearing the path for Presidents Donald Trump and Xi Jinping to finalise a deal that could provide much-needed relief to global markets. Reflecting this optimism, China’s state-run media called on both nations to “jointly safeguard the hard-earned progress” achieved in recent negotiations ahead of the crucial Trump-Xi summit.

The US September CPI delivered a modest downside surprise, with both headline inflation (+0.31% m/m) and core inflation (+0.2% m/m) coming in a tenth below the median forecast. Year-over-year rates stood at 3.02% for headline and 3.01% for core, compared to 2.92% and 3.11% in August, respectively. While the survey projections appeared slightly elevated, as noted in our preview, the data still presents a positive outcome. Components expected to rise generally followed that trajectory, particularly in recreation, where the base effect was unfavourable. Airfares contributed modestly to the increase, while the rise in clothing prices reflected a seasonal trend rather than tariff-related factors, with the y/y rate slowing. Food price increases were somewhat milder, and shelter costs continued to show downward momentum, further aiding the inflation outlook. Overall, the underlying inflation picture showed broad improvement, with no clear evidence of tariff pressures affecting any measures. The longer this absence persists, the greater the likelihood it won’t materialise. The only notable point for hawks was the slightly sticky Supercore reading, though its recent trend remains flat rather than upward. This softer-than-expected report should enable the Federal Reserve to maintain its focus on risks stemming from weakening labour market data.

Despite the ongoing US government shutdown, it’s shaping up to be a busy week globally. In the Eurozone, the week kicks off with the German IFO survey and monetary & credit data on Monday. The ECB will release the Bank Lending Survey and negotiated wages data on Tuesday. Preliminary Q3 GDP figures begin rolling out, starting with Spain on Wednesday, followed by France, Italy, and Germany on Thursday. Flash October CPI figures will start trickling in on Thursday, culminating in the Eurozone-wide release on Friday. However, the highlight will be the ECB meeting on Thursday, where the deposit rate is expected to remain at 2%. Markets will focus on how recent weak activity data influences the Governing Council’s concerns regarding growth and inflation. In the US, it’s also FOMC week, with another 25bps rate cut anticipated. Chair Powell’s press conference will likely center on balancing September CPI data against labor market risks. Due to the shutdown, advanced Q3 GDP and the PCE report are unlikely to be released as planned. Meanwhile, Canada’s central bank will announce its rate decision on Wednesday, with a 25bps cut to 2.25% expected. On Thursday, the Bank of Japan is expected to hold its rate steady at 0.5%, given the heightened political uncertainty, despite inflation pressures suggesting a move might be warranted. In the UK, the key release will be money and credit data on Wednesday.

Overnight Headlines

  • German Business Confidence Set For Rebound Amid Berlin Bonanza

  • Euro Zone To Get Hard Data On Tariff Damage As ECB Sets Rates

  • Meloni’s €13.5B Bridge To Sicily Hits Resistance From Auditors Cour

  • US Govt Debt Burden On Track To Overtake Italy’s, IMF Figures Show

  • Chinese And US Officials Tentatively Agree To Avert 100% Tariffs

  • Japan's Leading Indicator Of Service Inflation Perks Up In Sept

  • Rate-Cut Bets Locked, Treasuries Traders Focus On Fed Signals

  • Fed’s Divisions Set To Deepen When Debate Turns To Further Cuts

  • Scope Downgrades US’s Credit Ratings To AA-, Outlooks To Stable

  • Moody’s Maintains France’s Rating, Revises Outlook To ‘Negative’

  • Novartis To Acquire Avidity Biosciences For About $12B

  • Workers Reject Boeing’s Latest Offer After Nearly Three Months On Strike

  • Toyota Posts Record First-Half Sales As US Offsets Japan, China

  • HSBC Sees $1.1B Hit On Madoff Fraud Case Litigation

  • Legal & General Agrees £4.6B UK Pensions Buyout Deal With Ford

  • BTC, ETH And XRP Extend Gains, Gear Up For Another Bullish Week

FX Options Expiries For 10am New York Cut 

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

  • EUR/USD: 1.1500 (750M), 1.1520 (460M), 1.1535 (1.1B), 1.1550 (525M)

  • EUR/USD: 1.1620 (830M), 1.1650 (630M), 1.1670-75 (505M)

  • EUR/USD: 1.1680-85 (550M), 1.1705 (1.1B)

  • GBP/USD: 1.3220 (440M), 1.3345-50 (520M) . EUR/GBP: 0.9300 (473M)

  • USD/CHF: 0.7845 (500M), 0.8075 (910M)

  • USD/CAD: 1.3720-25 (680M), 1.4100 (1.1B)

  • AUD/USD: 0.6490 (2.5B), 0.6575-80 (680M)

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 6674 Target 6896

  • Below 6674 Target 6409

EURUSD 

  • Daily VWAP Bearish

  • Weekly VWAP Bearish

  • Below 1.1668 Target 1.1526

  • Above 1.1668 Target 1.1739

GBPUSD 

  • Daily VWAP Bearish

  • Weekly VWAP Bearish

  • Below 1.3392 Target 1.3258

  • Above 1.3392 Target 1.3152

USDJPY 

  • Daily VWAP Bullish

  • Weekly VWAP Bullish

  • Below 150.50 Trgaet 147.78

  • Above 150.50 Target 154.48

XAUUSD

  • Daily VWAP Bearish

  • Weekly VWAP Bullish

  • Above 4046 Target 4345

  • Below 4046 Target 3684

BTCUSD 

  • Daily VWAP Bullish 

  • Weekly VWAP Bearish

  • Above 107k Target 116k

  • Below 106k Target 100k