A rollercoaster week draws to a close for Global Markets. US-China trade talks were driving volatility and the mixed messages from both parties kept things interesting. Markets also saw harsher sanctions on Russian which has renewed the geopolitical risk premium when factoring in the Russia/Ukraine situation.
President Trump went back and forth this week, keeping markets guessing as his rhetoric went from diplomatic to combative and back to diplomatic by the end of the week regarding China. A date has now officially been set for a Trump-Xi meeting which at this stage is set for October 30.
President Trump is heading on an Asia visit this weekend with a senior US official stating that President Trump will sign economic agreements, including trade and critical minerals, on his trip this weekend.
The news of a Trump-Xi meeting which markets had expected since the start of the week led to a rise in equities globally. European stocks closed at record highs.
The S&P 500 and the Nasdaq are set to have their best week in terms of percentage gain since August. Meanwhile, the Dow Jones Industrial Average is heading for its biggest weekly jump since June.
The moves in Global stocks were also helped by the cooler than expected US CPI data.as well as US earnings. For more on the CPI release read US Breaking News: Cool US CPI Print Weighs on the US Dollar, Dow Jones Index Eyes Higher Open
The current third-quarter earnings season is moving very fast, with 143 companies in the S&P 500 having already reported their results.
So far, 87% of those companies have surpassed Wall Street’s expectations.
Because of these strong results, analysts have raised their overall forecast for S&P 500 earnings growth for the quarter to 10.4% year-over-year, which is a solid improvement from the 8.8% growth that was expected at the beginning of October.
The US Dollar was nearly flat on Friday, steadying after a brief dip following the release of the inflation report, though it remained on track for a small gain for the week.
The euro rose slightly after a survey showed that business activity in the Eurozone, led by the services sector, grew faster than expected in October.
The Canadian dollar was slightly weaker but saw a minimal reaction overall.
Meanwhile, the Japanese yen fell to a two-week low despite data released earlier on Friday showing that Japan’s core consumer prices remained above the central bank’s 2% target, which kept alive expectations for an interest rate hike soon.
Taking a brief look at how commodities ended the week and Gold prices reduced their losses on Friday after a slightly cooler-than-expected US inflation report reinforced expectations that the Federal Reserve will cut interest rates next week.
Despite this recovery, gold was still set for its first weekly loss in ten weeks.
Meanwhile, oil prices fell slightly as investors grew skeptical about how strongly the Trump administration would enforce its new sanctions on Russia’s two largest oil companies.
Even though both oil benchmarks retreated near the end of trading, giving up some of the previous day’s large gains, they still finished the week more than 7% higher, marking their biggest weekly jump since mid-June.
Given that next week brings a host of central bank decisions, FX markets could have a busy week.
Beyond the data, markets will be focused on the Trump-Xi meeting, Russia-Ukraine developments as well as renewed tensions between the US and both Venezuela and Colombia. Any signs of US military intervention in Venezuela could add to the risk premium and affect overall market sentiment.
US earnings will also be key with a host of ‘magnificent 7’ companies all reporting Q3 earnings.
Let us take a look at some of the key data releases which could shake markets next week.
Asia Pacific Markets
In the coming week, all attention will be on the US-China trade talks.
The talks begin this weekend in Malaysia with top officials (led by China’s He Lifeng and US Treasury Secretary Scott Bessent) and are expected to lead to the long-awaited face-to-face meeting between President Xi Jinping and President Trump on October 30th in South Korea. This will be their first meeting since 2019, following months of increasing trade fights and threats.
Because the recent language has cooled, and President Trump has spoken optimistically about reaching a “fantastic deal” and even visiting China in 2026, we expect a positive outcome. This deal will likely at least continue the current uneasy trade truce.
However, Trump has kept his options open by suggesting the meeting might not happen. If the meeting does go ahead, it likely means the top officials (He and Bessent) have already agreed on the basic terms of a deal.
Regarding economic news, next week is quieter. The main data release will be China’s manufacturing report next Friday, which is expected to show that manufacturing activity is still shrinking.
The Bank of Japan (BoJ) is expected to keep its interest rate at 0.5% on October 30th.
Even though the BoJ’s board members still disagree on policy, the majority is not ready to change course yet. I believe that inflation has been firmly rising and the economy is holding up well despite challenges like US trade tariffs. These factors should support the BoJ’s policy of eventually raising interest rates.
However, because most board members are cautious about raising rates too soon, a rate increase might be delayed until December. Supporting this view, I expect key data next week, like the Tokyo consumer price index, to show a strong rise of 2.5%, and for economic activity (like factory output and retail sales) to recover.
Central Bank Decisions and US-China Talks in Focus
The Federal Reserve is widely expected to cut its interest rate by another 0.25% on October 29th, following a similar cut last month. While the US economy looks decent and inflation is still a bit high, the Fed is shifting its focus because the risks are changing.
Price increases due to tariffs haven’t been as severe as feared, giving time for factors like lower energy prices, slowing wage growth, and easing housing rents to help bring inflation down. At the same time, the job market is starting to look more concerning, with many indicators suggesting an increasing risk of job losses. Because this trend points to both weaker economic growth and lower inflation in the future, the Fed feels that moving interest rates closer to a neutral level is the sensible thing to do.
The report on third-quarter economic growth (3Q GDP) is unlikely to be released next week because of the ongoing government shutdown.
The upcoming European Central Bank (ECB) meeting should be uneventful. Since the last meeting, economic data for the Euro area has been mixed: some surveys improved, but August’s official data disappointed. While September inflation briefly went above 2%, the new, important figures such as the third-quarter GDP growth and the October inflation rate will both be released on the day of the meeting itself.
With political risks calming down and officials signaling no rush, the ECB is expected to reaffirm its current stable position, with any potential decision on an interest rate cut pushed to December.
My opinion is that the October inflation rate will remain around 2%, and third-quarter economic growth will be a muted 0.1%, showing the economy is avoiding a recession despite global problems but is nowhere near a strong rebound.
Essentially, these data releases are expected only to confirm that the Eurozone economy is holding steady at a slow pace, so the ECB is unlikely to react to them strongly.
The Bank of Canada is expected to cut interest rates by 0.25% this week, even though recent reports showed job growth and inflation were a bit stronger than expected.
The central bank is under pressure to help Canada’s economy, which has been severely damaged by US tariffs (since three-quarters of Canada’s exports go to the US).
Additionally, Canadian consumers have very high debt levels, so the Bank is likely stepping in to provide needed support.
US Dollar Index (DXY) Daily Chart – October 24, 2025
Key Levels to Consider:
Support
- 97.70
- 96.90
- 96.37
Resistance
- 99.57
- 100.00
- 100.61
Follow Zain on Twitter/X for Additional Market News and Insights @zvawda
Opinions are the authors’; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. The provided publication is for informational and educational purposes only.
If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please refer to the MarketPulse Terms of Use.
Visit https://www.marketpulse.com/ to find out more about the beat of the global markets.
© 2025 OANDA Business Information & Services Inc.
