Markets Today: China CPI Struggles, Gold Breached $4200/oz & FTSE 100 Retreats. US Earnings & Central Bank Speakers Ahead

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Asia Market Wrap - Nikkei Extends Recovery

Most Read: USD/CAD Price Outlook: Consolidation Above Key 1.4000 Handle. What Next for the Loonie?

Japanese stocks bounced back strongly on Wednesday, with the benchmark Nikkei index recovering from its biggest one-day loss since April, as investors bought back into the technology sector.

The Nikkei 225 Index surged 1.8% to close at 47,672.67, making up for a significant part of its 2.6% drop from the previous session. The broader Topix index also climbed 1.6%. Leading the recovery were major tech stocks that had been hit hard by worries over the China-U.S. trade dispute.

SoftBank Group, a key investor in chips and AI, rose 5.1%, while chip equipment maker Advantest gained 2.2%. In related news, the European Union is reportedly considering a bold plan to require Chinese companies to share their technology with European firms in exchange for local market access.

Domestically, there is ongoing political uncertainty in Japan, with leaders of the main opposition parties meeting on Wednesday to discuss uniting behind a single candidate for the position of Prime Minister.

Chinese CPI Underwhelms

China's consumer prices continued to fall in September 2025, recording a year-over-year drop of 0.3%, which was slightly less severe than the previous month but worse than what analysts had expected.

The main reason for the overall price decline was a steep drop in food prices, which fell at their fastest rate since January 2024. This was largely driven by an oversupply of pork, lower production costs, and weak consumer demand ahead of the Golden Week holidays.

In contrast to food, prices for goods and services excluding food and energy (known as core inflation) actually rose by 1.0% year-over-year. This was the highest core inflation reading in 19 months, suggesting that underlying consumer demand is slowly starting to pick up, possibly due to government incentives encouraging people to trade in old consumer goods. Categories like healthcare and clothing saw price increases, and the cost of transportation fell at a slower pace than before.

On a month-to-month basis, prices barely moved, increasing just 0.1%.

Even though the current economic data suggests the central bank of China (People's Bank of China) should lower interest rates or take other steps to boost the economy (monetary easing), it might decide to wait. The bank could be saving those options in case the planned meeting between President Xi and President Trump does not go well, allowing them to use the easing measures as an emergency economic boost afterward.

European Session - Luxury Sector Boosts European Stocks

European stock markets climbed on Wednesday, largely driven by a massive rally in luxury brands after French giant LVMH delivered surprisingly positive sales results, calming fears about the health of major companies amidst global trade and growth concerns.

Luxury group LVMH saw its shares soar over 12%, heading for their best daily performance in almost two years after reporting better-than-expected sales in the third quarter, fueled by stronger demand in China.

This good news immediately boosted other luxury stocks, with companies like Hermes and Richemont seeing gains between 2.7% and 7.2%. This surge caused the French stock index to jump 2.5%, while the broader STOXX 600 index for all of Europe rose 0.8%.

Adding to the positive mood, chip-equipment supplier ASML rose 3.5% after its forecasts for quarterly orders and sales beat market expectations.

However, not all stocks did well: German copper producer Aurubis fell 7.1% because its majority owner, Salzgitter, launched a large bond that can be exchanged for Aurubis shares, which often puts downward pressure on a stock's price.

On the FX front, The US dollar remained mostly unchanged early on Wednesday, stabilizing after a slight drop in the previous session.

The dollar was steady against the Japanese yen and the Swiss franc, holding its value after losing ground to both currencies on Tuesday.

The euro also held firm at 1.1606 following its own small gain yesterday.

Among commodity-linked currencies, the Australian dollar ticked up slightly by 0.1%, attempting to recover after hitting its lowest point since late August on Tuesday.

In contrast, the New Zealand dollar continued its slight decline, easing another 0.1% after falling to a six-month low yesterday.

Currency Power Balance

Source: OANDA Labs

Oil prices dropped slightly on Wednesday, continuing a downward trend, as worries about too much supply in the global market overshadowed demand concerns tied to the US-China trade conflict.

The main pressure came from a warning issued by the International Energy Agency (IEA). The IEA stated that the global oil market could see a large supply surplus—as much as 4 million bpd next year. This is a bigger excess than previously expected, caused by oil-producing nations (OPEC+ and rivals) increasing their output while global demand remains slow.

Both major oil benchmarks, Brent crude and US West Texas Intermediate (WTI), saw small dips, with Brent trading at $62.30 per barrel. Both contracts had already hit five-month lows in the previous trading session.

Gold prices surged again on Wednesday, climbing to a new all-time high just above the $4,200 per ounce mark.

Renewed concerns about the trade conflict between the U.S. and China has given haven demand a fresh boost.

For more on the movement of Gold prices, read Gold (XAU/USD) Price Eyes Acceptance Above $4100/oz on US-China Trade War Fears, Up 2% on the Day

Economic Calendar and Final Thoughts

Looking at the economic calendar, the European session will be quiet before market participants' attention turns to US Earnings data and a host of Central Bank speakers who will take the spotlight.

Lastly, attention will be on the Federal Reserve's "Beige Book," a key report that gathers informal information on the US economy across its regions, because it strongly influences the Fed's decisions on interest rates.

The Beige Book may carry more weight at the moment given the US government shutdown and lack of data available, especially labor data.

For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)

Chart of the Day - FTSE 100 Index

From a technical standpoint, the FTSE 100 did rise toward the resistance level around 9500.

However, the index failed to break higher and is experiencing a pullback this morning.

The bullish structure will remain intact as long as the FTSE 100 is able to hold above the swing low at 9412 and the 100-day MA resting at 9406.

A hold above this key confluence zone could be the start of the next leg higher.

A break of this zone though open up the Index to further downside.

Immediate resistance rests around the 9500 handle before the swing high at 9590 comes into focus.

On the downside, support rests at 9406 before the 9357 and 9311 handles become areas of interest.

FTSE 100 Index Four-Hour Chart, October 15. 2025

Source: TradingView.com (click to enlarge)

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