Weekly Market Recap: OCT 13-17, 2025

The past week in global markets was relatively slow in terms of fresh fundamental catalysts, as most major economies continued to digest previous data and geopolitical developments.
However, investor sentiment showed signs of optimism, largely driven by easing trade war rhetoric from former U.S. President Donald Trump and shifting expectations across key central banks.

Below is a detailed breakdown of what shaped the markets this week and what to watch for in the days ahead.

Table of Contents

1. U.S.–China Trade War Relief and Market Sentiment
2. U.S. Government Shutdown and Data Delays
3. U.K. Labor Market Weakens Further
4. Powell’s Dovish Tone Lifts Gold and Risk Assets
5. Australia’s Labor Market Shows Mixed Signals
6. U.K. GDP and Manufacturing Stay Weak
7. U.S. Manufacturing Contracts Sharply
8. European Inflation Remains Stable
9. Gold’s Surge and Market Outlook Ahead
10. Key Events to Watch Next Week

U.S.–China Trade War Relief and Market Sentiment

After a weekend dominated by tariff-related fears, sentiment improved when Donald Trump clarified that his earlier aggressive stance toward China stemmed from Xi Jinping being “in a bad mood.” He assured that he and President Xi Jinping would work to resolve trade tensions. Later in the week, Trump also acknowledged that a 100% tariff rate was unsustainable, further boosting global risk appetite.

This narrative shift brought renewed optimism to equities and commodities, particularly gold, which had been highly sensitive to geopolitical tone shifts in recent weeks.

U.S. Government Shutdown and Data Delays

The ongoing U.S. government shutdown continued into this week, delaying critical economic data releases including Jobless Claims, Producer Price Index (PPI), and other key indicators.
The delay has left economists, investors and central bankers without a clear picture of the U.S. economy’s short-term trajectory, adding uncertainty to policy expectations.

At this stage, there is still no official timeline for when the government will reopen or when the backlog of delayed data will be released.

U.K. Labor Market Weakens Further

The U.K. labor market continued to soften, with the unemployment rate rising to 4.8% while employment change slowed to just 0.1K. Meanwhile, claimant count change jumped to 25.8K from 17.4K, and job vacancies fell to 717,000, marking the 39th consecutive monthly decline in recruitment activity.

This ongoing labor weakness raises the likelihood that the Bank of England (BoE) could continue cutting interest rates, as policymakers balance slowing growth and persistent inflationary pressures.

Powell’s Dovish Tone Lifts Gold and Risk Assets

Federal Reserve Chair Jerome Powell highlighted signs of a rapidly weakening labor market in his latest remarks, while also acknowledging that inflation remains above target.
Markets interpreted his overall tone as dovish, sparking rallies in gold and risk assets, while the U.S. dollar saw notable outflows.

This shift underscores a growing expectation that the Fed could soon pivot toward more accommodative policies if economic data continues to soften.

Australia’s Labor Market Shows Mixed Signals

In Australia, employment change rose to +14K following a previous decline of -11.8K. However, the unemployment rate increased to 4.5% from 4.3%, reflecting a broader trend of labor market weakness seen across major economies.

This aligns with global patterns, where strong job creation is failing to offset a rise in unemployment amid cooling economic momentum.

U.K. GDP and Manufacturing Stay Weak

The U.K. GDP (MoM) rose by 0.1%, in line with forecasts, suggesting only modest growth amid a high interest rate environment.
Industrial production fell -0.7%, while manufacturing output contracted -0.8%, slightly better than the forecast of -1.0% but still weaker than the previous reading of -0.2%.

These figures highlight that the lagging impact of tight monetary policy continues to weigh heavily on Britain’s industrial and manufacturing sectors.

U.S. Manufacturing Contracts Sharply

The Philadelphia Fed Manufacturing Index dropped sharply into negative territory at -12.8, down from 23.2 and far below expectations of 10, marking the lowest level since April.
The report showed declines in shipments and employment, while the prices paid index rose to 49.2, with nearly half of surveyed firms reporting higher input costs.

This combination of falling output and rising costs signals mounting pressure within the U.S. manufacturing sector.

European Inflation Remains Stable

Final data confirmed that Eurozone inflation held steady at 2.2%, matching the flash estimate and remaining near the ECB’s target range.
This stability supports the European Central Bank’s current stance that inflation is on track to gradually normalize, reducing the risk of any sharp policy reversals in the near term.

Gold’s Surge and Market Outlook Ahead

Gold was the standout performer of the week, surging to a new record high of $4,380 before profit-taking kicked in following improved U.S.–China trade sentiment.
Despite the pullback, gold’s 10% rally in just one week underscores the strength of underlying fundamentals, including dovish central bank tones, persistent inflation concerns, and global uncertainty.

While short-term corrections are likely, the long-term trend remains bullish, especially ahead of next week’s U.S. CPI release and the upcoming FOMC meeting.

Key Events to Watch Next Week

Next week features several high-impact economic releases that could shape global sentiment:

• U.K. Inflation Data: Critical for assessing BoE’s rate path.
• U.S. CPI (if released): Dependent on the end of the government shutdown.
• S&P Global PMI Data: Expected to provide valuable insights into U.S. and global economic activity amid limited official data.

Even in the absence of U.S. government data, private sector indicators like the S&P surveys will carry significant weight in influencing Federal Reserve expectations and broader market direction.

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