Markets Weekly Outlook – Geopolitical peace and turmoil ; Third week of shutdown

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Week in review – Equities flashing red, peace in the Middle East and key milestones in Metals

It has been a tense week for global markets as the US government shutdown enters its second week.

What had initially seemed like a non-event is now beginning to rattle investors.

The growing uncertainty around the absence of economic data and a huge US Dollar rally has started to weigh on sentiment, breaking the market’s steady bullish rhythm since late September.

Risk assets are blinking. Equities and cryptocurrencies are showing cracks after a relentless climb to new records since September 23.

The Dow Jones reached a record 47,000 last Friday and has since rolled over and failed to reclaim those highs. The S&P 500 and Nasdaq followed during today’s action, retreating toward four-week lows as profit-taking intensified.

Bitcoin, which had just set new all-time highs to $125,700 on Monday, also faced sharp outflows. The ongoing steep selloff is dragging the total crypto market cap back below $4 trillion.

Cryptocurrency total Market cap – October 10, 2025 – Source: TradingView

Some geopolitical tensions have added fuel to the volatility. This morning, President Trump reignited his long-standing trade feud with China, accusing President Xi Jinping of “manipulating global trade for unfair advantage.”

His comments — delivered through a series of pointed remarks on Truth Social — sent an uneasy tone across markets. The much-anticipated meeting between the two leaders at the APEC summit in South Korea in November should see further delay.

Meanwhile, metals continued to shine in the chaos.

Silver extended its rally, surging another 4% and breaking above $50 for the first time on record. Gold broke $4,000, marking another milestone, but some waves of volatility are seen at the highs. Will the precious metal close above the milestone at the end of the week?

Most Read: Silver On The Highest Price Since 1980. Is History About to Repeat Itself?

But not all headlines were grim. For good geopolitical news, the Gaza war seems to be approaching its end with Israel and Hamas both agreeing to the Trump 20-point Plan.

Israeli soldiers officially retracted behind the yellow line, which should lead to the return of all the hostages in the next 72 hours, with US forces starting to enter Gaza to begin the transition period.

Let’s look at what’s coming up for next week.

Weekly performance from different asset classes

Weekly Asset Performance, October 10, 2025 – Source: TradingView

The weekly performance is extremely volatile across all types of asset-classes but I want to point your attention to the immense risk-off flows that have started around 10:00 this morning.

Ethereum yet again led the action by being the first one to move – Keep an eye on it for the time to come.

Read More:

• US Stock Market outlook – S&P 500 breaks channel, Equities in the red to close the week
• Canadian employment makes a comeback – USD/CAD reverses

Let’s dive into next week’s action. Expect A LOT of volatility.

The Week Ahead – Still no BLS data but key speeches expected

Asia Pacific Markets - Focus on China and Australia

Asia-Pacific traders face a relatively busy week, dominated by Chinese trade and inflation figures, Australia’s employment data, and ongoing political strains in Japan.

The week starts quietly on Sunday with New Zealand’s Business NZ PSI for September, before turning to China’s trade balance later in the evening.

Exports and imports will be closely scrutinized to confirm that last month’s modest rebound in external demand is holding. Consensus looks for exports to rise 6% YoY and imports to climb 1.5%, suggesting steady but uneven momentum.

The Reserve Bank of Australia’s Meeting Minutes will be released on Monday. The AUD has been holding strong against most majors and particularly against its neighbor, the NZD, with Chinese stimulus providing a better outlook for Australia.

Asia traders will also look into Chinese inflation data on Tuesday to monitor whether the ongoing deflation (currently -2.3% y/y) will continue, which should prompt or stop further stimulus from the PBoC.

Wednesday is the busiest session for AUD traders, with a comprehensive Australian labor market update due at 20:30 ET.

Employment change is expected to rise by 17K after last month’s decline of -5.4K, taking the unemployment rate to 4.3%.

Beyond the data, Japan remains in the spotlight following Sanae Takaichi's election as head of the LDP.

While the Nikkei celebrated the appointment of the first woman in power in Japan, the yen weakened sharply amid mounting fiscal concerns and a coalition deadlock with Komeito.

The coming week will be crucial to see whether progress is made on forming a government and whether the JPY continues to bleed.

US, Europe and UK Markets - key speeches from Powell, Lagarde and Macklem

Turning back to the Occident:

Key data watchers center their attention on the UK labor data (Tuesday) and industrial production (Wednesday), both crucial for gauging whether the Bank of England’s projections are well priced.

Cuts have been priced out for the BoE with still crippling inflation, particularly food inflation, which starts to hurt British citizens – Tough repercussions of Brexit.

Meanwhile, Europe will see its EU Zone Inflation data on Friday, but all eyes are on the ECB President Lagarde’s speech on Thursday (12:00 ET), where she’s expected to address recent market turbulence and risks to growth.

France is expected to announce a new government and Prime Minister soon, possibly restoring short-term confidence in the Euro after a rough week of political weakness.

Across the Atlantic, the US calendar is stacked with high-profile speeches from Fed Chair Powell, Bowman, Waller, and Barr. U.S. retail Sales, PPI, and Jobless Claims are usually released but are still delayed because the BLS and Census Bureau are not open during the shutdown.

Finally, BoC Governor Macklem joins the global central bank chorus on Thursday 13:30 after stressing trade and investment weakness in recent remarks. During that speech, markets might also look to learn more about the US-Canada trade deal developments.

For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (High-tier data only)

Safe Trades and enjoy your weekend!

Follow Elior on Twitter/X for additional Market News, Insights and Interactions @EliorManier

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