Weekly Market Recap: OCT 19-24, 2025

The past week was packed with major inflation releases and PMI readings that gave fresh insight into how the global economy is evolving. From New Zealand’s steady price growth to the U.S. inflation surprise and Japan’s continued progress toward policy normalization, each region offered its own narrative — painting a complex but fascinating picture of where central banks may head next.

Table of Contents

1. New Zealand: Inflation Rises to 3%
2. Canada: CPI Accelerates to 2.4%
3. United Kingdom: Inflation Holds, Retail Sales Strengthen
4. Australia: Mixed PMI Signals
5. Japan: Inflation Climbs, Rate Hike Odds Increase
6. Eurozone: PMI Data Returns to Expansion
7. United States: Inflation Eases, PMI Stays Strong
8. Trade Tensions Rise as Trump Proposes New Tariffs
9. Market Outlook

1. New Zealand: Inflation Rises to 3%

New Zealand’s Consumer Price Index (CPI) increased to 3.0%, up from 2.7% previously, aligning with forecasts.
The main contributors were housing and household utilities, which continue to pressure living costs.
This rise may push the Reserve Bank of New Zealand (RBNZ) to remain cautious as it evaluates the pace of policy normalization.

2. Canada: CPI Accelerates to 2.4%

Canada’s inflation rate climbed to 2.4% from 1.9%, surpassing expectations of 2.3%.
Price growth was driven by food purchased from stores, shelter, and rent, highlighting persistent inflationary pressure in key household categories.
The Bank of Canada is likely to stay patient with rate adjustments as it gauges whether this rebound is temporary or structural.

3. United Kingdom: Inflation Holds, Retail Sales Strengthen

UK inflation held steady at 3.8%, matching the previous reading and staying below market forecasts.
The persistence of elevated housing and transport costs continues to underpin price pressures, though headline inflation remains contained.

Meanwhile, retail sales rose 1.5% from 0.6%, marking the eighth consecutive monthly gain — driven mainly by non-store retailing.
This resilience in consumer spending suggests underlying demand remains robust despite high living costs.

4. Australia: Mixed PMI Signals

Australia’s S&P Global Manufacturing PMI slipped to 49.7, signaling contraction and marking its weakest level in months.
However, the Services PMI climbed to 53.1, showing that the services sector continues to drive overall economic growth.
The mixed results indicate a balanced but slightly slowing economic environment, with manufacturing lagging behind broader activity.

5. Japan: Inflation Climbs, Rate Hike Odds Increase

Japan’s national CPI rose to 2.9% from 2.7%, reinforcing the Bank of Japan’s (BoJ) confidence in gradually normalizing policy.
This uptick increases the chances of a 0.25 bps rate hike in the near term.

The Manufacturing PMI slipped to 48.3 (from 48.6), while the Services PMI remained solid at 52.4, signaling continued expansion in services.
Manufacturing remains pressured by the ongoing tariff situation, but the BoJ’s accommodative stance is expected to support recovery in the sector.

6. Eurozone: PMI Data Returns to Expansion

The Eurozone Manufacturing PMI improved to 50.0, marking a return to expansion territory.
At the same time, the Services PMI rose to 52.6 from 51.1, underscoring stronger business activity across the bloc.
This renewed momentum suggests the European Central Bank (ECB) is in no rush to cut rates, as the region’s growth appears to be stabilizing.

7. United States: Inflation Eases, PMI Stays Strong

U.S. inflation came in at 3.0%, slightly below the expected 3.1%, hinting that price pressures are gradually easing.
The softer figure encouraged markets to maintain expectations of a rate cut in 2025, which boosted both gold and risk assets after the release.
Notably, MRKT AI’s predictive model had accurately forecasted the 3.0% reading.

On the activity side, the S&P Global Manufacturing PMI edged up to 52.2, while the Services PMI climbed sharply to 55.2 — both pointing to strong economic performance.
This combination supports the idea that the Federal Reserve can remain patient before initiating rate cuts.

8. Trade Tensions Rise as Trump Proposes New Tariffs

Toward the end of the week, Donald Trump plans to raise tariffs on Canadian goods by an additional 10%, further escalating concerns about renewed trade friction between the two countries.
The move could heighten North American trade war fears, potentially impacting manufacturing supply chains and investor sentiment across both markets.

9. Market Outlook

Across major economies, the past week’s data reaffirmed divergent policy paths:

• New Zealand and Japan lean toward gradual tightening.
• The U.S. and Canada maintain a data-driven approach.
• The Eurozone and UK show resilience but face mixed growth signals.
• Australia balances between manufacturing weakness and service-sector strength.

Meanwhile, the renewed tariff situation adds a layer of geopolitical risk that markets will closely monitor.
Overall, inflation remains sticky but controlled, while business activity continues to expand in most regions — a combination that keeps global markets cautiously optimistic heading into year-end.