Daily Market Outlook, October 15, 2025
Patrick Munnelly, Partner: Market Strategy, Tickmill Group
Munnelly’s Macro Minute…
Stocks and futures made gains, while the Dollar took a hit, as growing optimism about a potential Fed rate cut fuelled risk-taking and overshadowed renewed tensions in US-China trade relations. Asian markets experienced a notable rally, jumping 1.5%—marking their first advance in four days. Meanwhile, futures for European and US stocks also climbed higher following remarks from Fed Chair Powell expressing concerns about a weakening job market, which bolstered expectations for a rate cut in October. The Dollar extended its decline for a second consecutive day, lifting Asian currencies in the process, while two-year Treasury yields hovered near their lowest levels since 2022. Gold, on the other hand, soared to a fresh record high. Global markets have staged an impressive rebound since the tariff-driven selloff in April, buoyed by hopes of further monetary easing after the Fed's September rate reduction and enthusiasm surrounding advancements in AI. However, this rally faces fresh challenges as US-China trade tensions resurface. Both nations have ramped up rhetoric and hinted at possible new restrictions targeting critical technologies, adding uncertainty to the outlook. Elsewhere, the European Union is reportedly weighing an aggressive new policy that could require Chinese companies to share their technology with European firms as a condition for operating within the bloc. This move aligns with the EU's broader push to strengthen industrial competitiveness.
On the political front, Japan’s opposition party leaders are set to meet on Wednesday to explore ways to bridge their policy differences and potentially unite behind a single candidate for the country’s top leadership position amidst growing political uncertainty.
Overnight, both Powell and Bailey made notable comments that caught attention. Fed Chair Powell hinted at an October rate adjustment, pointing to "rising downside risks to employment", even though some data was missing due to the government shutdown. Meanwhile, Governor Bailey remarked that the UK economy is operating "a bit under potential", indicating his pivotal vote on the Committee still leans toward further rate cuts. However, with high spot inflation and elevated expectations, any move would likely bypass the November meeting. While much of the buzz around Powell’s speech centres on its implications for near-term rates, the primary focus was on the Fed’s balance sheet. He suggested that "the coming months" might be the right time to "halt balance sheet runoff". There remains a lingering question about whether the Fed’s retained portfolio of US Treasuries is too skewed toward longer-term securities and underweight in shorter-term ones. However, there’s no doubt about the Fed’s commitment to maintaining a substantial portfolio dominated by Treasury securities over the long term. This contrasts sharply with the Bank of England’s approach, where offloading gilts from the balance sheet remains a key objective. These differing strategies on balance sheet policies between the Fed and the BoE could increasingly influence cross-market bond valuations in the future.
The IMF’s updated World Economic Outlook indicates its worst fears for 2025 have not materialized. Global trade has shown resilience despite US tariffs and policies, with a minor 0.1% hit to global growth projected for 2023 (3.2%) and 2024 (3.1%), primarily affecting China and the US. However, long-term risks remain, including potential harm from tariffs, US immigration restrictions, speculative financial conditions, and China’s property and manufacturing issues. Fiscal vulnerabilities persist globally, with limited decisive positives like EM growth from a weaker USD and fiscal expansion in Germany. If major economies falter, these offsets may prove insufficient.
On Tuesday, Bitcoin and Ether experienced significant declines due to escalating tensions between the U.S. and China, erasing a rally from the previous day that had been sparked by President Donald Trump's optimistic trade comments. During afternoon trading, Bitcoin dropped to a low of $110,000, reflecting a 2.3% decrease. It had recently reached a peak of over $126,000 on October 6. Similarly, Ether fell to $3,900, down 3.7%, after having dropped 12% last Friday from its daily high to a low of $3,400. Additionally, many altcoins, which are cryptocurrencies other than Bitcoin, suffered even greater losses, with some plummeting by as much as 80% on various exchanges.
Overnight Headlines
IMF: BoE Should Be ‘Very Cautious’ On Future Rate Cuts
ECB’s Lagarde Sees No Disorder In Bonds Despite French Crisis
Fed’s Collins: Prudent To Ease A Bit More In 2025
Trump Threatens To Disarm Hamas ‘Quickly’ As Ceasefire Wobbles
Trump Threatens China Cooking Oil Trade For Soybean Boycott
Bouygues, Free-Iliad, Orange Offer $20B For Altice French Assets
Fed’s Powell: Hiring Slowdown Supports Need For More Cuts
Jeep-Maker Stellantis Plans $13B US Investment; Jobs At Risk
Embraer CEO Pushes For US–Brazil Aircraft Tariff Deal
Oracle Co-CEOs Defend Massive AI-Focused Data Centre Expansion
Trump Floats ‘Trade Punishment’ For Spain Over Defence Spending
Japan To Ban Cryptocurrency Insider Trading With New Rules
China’s Consumer Prices Fall As Deflation Fears Loom
Grindr Confirms Buyout Interest From Top Investors
UK And Canada To Join EU Plan To Tap Frozen Russian Assets
FX Options Expiries For 10am New York Cut
(1BLN+ represents larger expiries, more magnetic when trading within daily ATR)
EUR/USD: 1.1525 (427M), 1.1540 (386M), 1.1550-60 (1BLN), 1.1600 (4.1BLN)
1.1670-80 (813M), 1.1700 (628M)
USD/CHF: 0.8030 (487M), 0.8050 (733M)
GBP/USD: 1.3255 (431M), 1.3300 (255M). EUR/GBP: 0.8665 (180M)
AUD/USD: 0.6540-50 (1.1BLN), 0.6555-60 (440M)
USD/CAD: 1.4050 (288M)
USD/JPY: 150.00 (1.2BLN), 151.00 (738M), 151.50 (1.2BLN)
151.95-152.00 (571M). EUR/JPY: 175.80 (250M)
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 Bearish
Weekly VWAP Bearish
Above 6440 Target 6800
Below 6700 Target 6400
EURUSD
Daily VWAP Bearish
Weekly VWAP Bearish
Below 1.17 Target 1.14
Above 1.1750 Target 1.1850
GBPUSD
Daily VWAP Bearish
Weekly VWAP Bearish
Below 1.34 Target 1.31
Above 1.35 Target 1.3580
USDJPY
Daily VWAP Bullish
Weekly VWAP Bullish
Below 150 Target 148.5
Above 151 Target 154
XAUUSD
Daily VWAP Bullish
Weekly VWAP Bullish
Above 4000 Target 4200
Below 3850 Target 3770
BTCUSD
Daily VWAP Bearish
Weekly VWAP Bearish
Above 106k Target 118k
Below 105k Target 100k
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Past performance is not indicative of future results.
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!