Daily Market Outlook, October 21, 2025 

Patrick Munnelly, Partner: Market Strategy, Tickmill Group

Munnelly’s Macro Minute…

Global stocks continued their upward momentum, with Asian markets climbing to record levels. Easing trade tensions and growing optimism about potential interest rate cuts fuelled positive sentiment among investors. MSCI's regional stock index broke its previous record, while Chinese stocks extended their rally ahead of a potential trade deal with the U.S. Meanwhile, a global stock index appeared ready to hit a new peak. However, Japanese equities took a hit after pro-stimulus candidate Sanae Takaichi secured a key vote to become Prime Minister. Shares of rare-earth companies surged following a U.S.-Australia partnership, although gold prices remained near historic highs. Asian markets found renewed energy after the S&P 500 recorded its biggest two-day rally since June earlier this week, with over 85% of companies surpassing earnings expectations so far. Robust corporate profits are adding momentum to a tech-driven surge, bolstered by investor anticipation of a Federal Reserve interest rate cut later this month as U.S.-China trade relations show signs of improvement. On the inflation front, the Bureau of Labour Statistics is set to release September’s consumer price index this Friday, after a delay caused by the U.S. government shutdown. Originally scheduled for October 15th, the report will provide key inflation data for Federal Reserve officials ahead of their policy meeting on October 30th. In the bond market, the 10-year Treasury yield dipped below 4% as falling oil prices helped ease inflation concerns ahead of Friday’s data release. Brent crude oil hovered around $60 per barrel, nearing its lowest level since May.

China's Q3 GDP grew 4.8% y/y, exceeding expectations, with 1.1% q/q growth driven by strong industrial production and exports. Retail sales slowed to 3.0% y/y, and investment fell to -0.5% y/y. Despite hitting the 5.0% GDP target, growth remains unbalanced, with domestic pressures evident in deflation (+3.7% y/y nominal growth) and a struggling housing market. Property sales (-7.6% y/y), real estate investment (-13.9% y/y), and home prices declined, while unsold inventories surged. Beijing relies on export gains to sustain growth, contingent on global demand. Restrictions on rare earths may reflect a broader strategy to sustain the investment-driven model.

UK public sector net borrowing for September was reported at £20.2bn, slightly below the £20.8bn median expectation and broadly aligned with the OBR’s forecast for the month. The central government net cash requirement stood at a lower £15.9bn. This month’s data included corrections to previously reported VAT collection errors, resulting in a mild reprofiling of borrowing figures dating back to January. These adjustments reduced the cumulative PSNB overshoot to £7.2bn compared to the OBR’s profile. The total financial year-to-date deficit now stands at £99.8bn, higher than the £92.6bn forecast in March. The cash requirement performance showed further improvement, with the gap narrowing to £6.1bn from £10.2bn last month. While the deficit profile reflects a deterioration compared to last year, recent months indicate no significant worsening in the trend, as both revenue and spending align broadly with expectations. This provides some relief for Reeves, particularly due to the narrowing cash requirement—an essential metric for the Gilt market. However, the OBR’s assumptions for the later months of the year appear more optimistic and will likely hinge on post-budget developments, ensuring no immediate challenges for now.

Overnight Headlines

  • Japan’s Takaichi Set To Become First Female PM After Coalition Deal

  • Trump, Australia’s PM Sign Critical Minerals Agreement To Counter China

  • Trump-Putin Summit In Budapest Unsettles Europe

  • Supreme Court Told Trump Tariffs Are Illegal $3T Tax

  • Reeves Launches ‘Blitz’ On Red Tape To Save £6B Yearly For UK Firms

  • General Dynamics Gets $3.5B Scout Vehicle Contract From Germany

  • BofA Warns Of Forced Stocks Selling If Credit Problems Persist

  • Deutsche Bank Tries To Block Ardagh’s $10B Restructuring Deal

  • US Regional Banks’ Earnings Under Scrutiny With Jitters Over Credit Risks

  • US Banks Are Hunting For Collateral To Back $20B Argentina Bailout

  • Crown Holdings Boosts Outlook As European Beverage Volumes Jump

  • German, Norwegian Ministers Court Canadian Submarine Orders

  • Oil Steady As Traders Focus On Surplus And US-China Trade Talks

  • UK Readies $134M To Send Forces To Ukraine After Accord

FX Options Expiries For 10am New York Cut 

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


  • EUR/USD: 1.1555-60 (457M), 1.1570 (260M), 1.1580-85 (400M), 1.1600 (1.2BLN)

  • 1.1620-25 (356M), 1.1670 (295M), 1.1685-90 (635M), 1.1700 (1.3BLN)

  • USD/CHF: 0.7945 (200M),0.8000-15 (300M)

  • EUR/GBP: 0.8655 (300M), 0.8690 (508M)

  • GBP/USD: 1.3270 (1.2BLN), 1.3290-1.3300 (1.1BLN)

  • AUD/USD: 0.6495-0.6500 (1.1BLN)

  • NZD/USD: 0.5700 (225M), 0.5770 (225M)

  • USD/JPY: 150.85 (320M), 152.00 (1.3BLN)

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 6650 Target 6800

  • Below 6600 Target 6400

EURUSD 

  • Daily VWAP Bearish

  • Weekly VWAP Bearish

  • Below 1.16 Target 1.1450

  • Above 1.1650 Target 1.1850

GBPUSD 

  • Daily VWAP Bullish 

  • Weekly VWAP Bearish

  • Below 1.34 Target 1.31

  • Above 1.3450 Target 1.3530

USDJPY 

  • Daily VWAP Bearish 

  • Weekly VWAP Bullish

  • Below 150 Trgaet 148.5

  • Above 151 Target 154

XAUUSD

  • Daily VWAP Bullish 

  • Weekly VWAP Bullish

  • Above 4200 Target 4500

  • Below 4050 Target 3950

BTCUSD 

  • Daily VWAP Bullish 

  • Weekly VWAP Bearish

  • Above 107k Target 113k

  • Below 106k Target 100k