U.S. Inflation Softens Ahead of Trump–Xi Talks (27 - 31 October)

The dollar index slipped to 98.8 after U.S. inflation data came in below expectations, reinforcing bets on Fed rate cuts next week and in December. Markets now price a 99% chance of a 25 bps cut.

Gold stayed below $4,120 as soft CPI data raised hopes for lower rates. Despite a 5% weekly drop, its sharpest in five years, gold remains up 55% this year, supported by trade and geopolitical risks.

The 10-year Treasury yield fell below 4% as weak inflation and trade uncertainty fueled rate-cut expectations.

The euro held above $1.16 after strong Eurozone PMI data, while the pound fell toward $1.33 on softer U.K. inflation and rising BoE cut expectations.

The yen weakened near 153 per dollar despite a 2.9% rise in Japan’s core inflation, and Brent crude rose to $66, its highest in two weeks, supported by renewed U.S. sanctions on Russian oil.

Currencies

Dollar Index: Fell to 98.8 after softer U.S. inflation data reinforced expectations of upcoming Fed cuts, though the index still rose 0.5% for the week.
Euro: Above $1.16 as strong Eurozone PMI and weaker U.S. data supported the currency. ECB easing not expected until mid-2026.
Pound: Weakened toward $1.33 after soft CPI and labor data increased expectations for early BoE cuts.
Yen: Around 153 per dollar, losing 1.5% for the week. Core inflation rose to 2.9%, but the BoJ expected to stay on hold until December or early next year.

Commodities

Gold: Below $4,120/oz after weaker U.S. inflation data lifted Fed cut expectations. Despite a 5% weekly drop, gold remains up 55% YTD, driven by safe-haven demand and trade risks.
Silver: Near $48.7/oz, down 0.5%, as profit-taking followed record highs. Still supported by industrial demand and tight inventories.
Brent Crude: Around $66/bbl, its best weekly gain since June, as U.S. sanctions on Rosneft and Lukoil raised supply concerns and prompted import cuts by China and India.

Fixed Income

The U.S. 10-year Treasury yield dipped below 4%, with markets pricing in another Fed rate cut following softer inflation data. The delayed CPI report confirmed easing price pressures, reinforcing bets for a 25 bps cut next week. Yields declined across maturities as U.S.–China trade tensions, government disruptions, and fragile banking data weighed on outlooks.
The U.K. 10-year gilt yield fell to around 4.4%, its lowest since mid-December, as weaker CPI data fueled speculation of early BoE cuts. Core inflation eased to 3.5%, and headline inflation stayed at 3.8%, below expectations. Markets now anticipate the first rate cut by February.
Japan’s 10-year government bond yield remained around 1.66%, steady despite inflation rising to 2.9% in September, led by energy costs. The BoJ is expected to hold rates steady next week, with the next hike likely in December or early next year.
Germany’s 10-year Bund yield rose above 2.6%, the highest since mid-October, after stronger PMI data signaled strong private-sector activity, led by services.

United States Inflation Rate, CPI (YoY, Sep)

Annual inflation rose to 3.0%, below the 3.1% forecast and the highest since January.
Energy prices climbed 2.8%, led by fuel oil and gasoline, while food and transportation slowed.
Core inflation eased to 3.0% from 3.1%, and monthly CPI rose 0.3%, mainly due to gasoline.

S&P Global Services PMI (Oct)

Increased to 55.2 from 54.2, beating expectations of 53.5.
Domestic demand and job creation strengthened, but business confidence weakened.
Input costs rose on wages and tariffs, while output prices increased at a slower pace.

China GDP Annual Growth Rate (Q3)

Economy grew 4.8% year-on-year, down from 5.2% in Q2—the slowest pace since Q3 2024.
Growth was held back by trade tensions, property sector weakness, and soft consumer demand.
Industrial output improved, and trade exceeded forecasts, keeping full-year growth near 5%.

United States Existing Home Sales (Sep)

Rose 1.5% to an annualized 4.06 million units, the highest in seven months.
Gains came from single-family homes (+1.7%), while condos were flat.
Median price climbed 2.1% YoY to $415,200 as lower mortgage rates supported demand.

United Kingdom Inflation Rate, CPI (YoY, Sep)

Annual inflation held at 3.8%, under the expected 4.0%.
Transportation costs rose 3.8%, while food and housing inflation eased.
Core CPI slowed to 3.5%, signaling moderate price pressures ahead of November’s budget.

Latest Analysis

Gold Rally Loses Steam (27 - 31 October)

Gold’s record-breaking rally paused as prices fell sharply below $4,000 per ounce, marking the steepest weekly drop since 2020. After ten weeks of inflows totaling $32.2 billion, institutional investors began taking profits and rotating toward equities as risk sentiment improved. The pullback followed easing geopolitical tensions and optimism over U.S.–China trade progress, which reduced safe-haven demand.

Detail

US-China Trade Deal Nears Completion (28.10.2025)

On Wall Street, momentum kept flowing after record highs on Monday.

Detail