Markets Today: UK GDP Up 0.1% in August, Gold & Oil Advance, FTSE Breaks Below 100-Day MA. Fed Speakers In Focus

[Redator]

Asia Market Wrap - Asian Stocks Advance

Most Read: EUR/JPY Forecast: Support at 175.00 Holds the Key to Immediate Bullish Continuation

Stock markets were mostly up across Asia on Thursday, driven by a strong rebound in the chip sector and a good start to the US earnings season.

Japan’s Nikkei index climbed 1.2%, heavily boosted by chip and Artificial Intelligence (AI) related stocks. This momentum increased after Taiwanese chip giant TSMC announced record earnings, and also because political developments raised the chances that pro-stimulus lawmaker Sanae Takaichi would become Japan's next Prime Minister.

Even though the announcement came after its market closed, Taiwanese stocks finished the day up 1.4%, hitting a new record.

South Korea’s KOSPI index also surged, jumping 2.2% to a record peak, after a high-level official expressed optimism about ongoing talks to finalize a trade deal with the US Similarly, Australia’s main stock index added 0.9% and hit its own record high, a rise fueled by the hope that poor recent job data would encourage the central bank to cut interest rates soon.

However, the Chinese markets lagged behind: Hong Kong’s Hang Seng index fell 0.7%, and mainland Chinese stocks were flat, as investors remain cautious about the complicated and uncertain path of trade relations with the US.

UK Economy Shows Resilience, Bigger Picture Remains a Concern

The UK economy grew slightly in August 2025, expanding by 0.1%, which reversed a small decline in July and met market expectations, but the growth was narrowly focused.

The primary driver of this modest expansion was the production sector, which grew by 0.4%, bouncing back after shrinking the month before. This increase was led by strong growth in manufacturing (up 0.7%) and the energy/utilities sector.

However, the largest part of the economy, the services sector, showed zero overall growth for the second month in a row. While some areas like administrative support and healthcare saw strong growth, these were completely canceled out by significant drops in other consumer-facing industries like retail/wholesale trade, arts/entertainment, and transportation. Furthermore, the construction sector shrank by 0.3%, mainly because repair and maintenance work decreased.

This overall picture suggests the UK economy is struggling to gain solid, broad momentum. With that in mind the OBR is still likely to downgrade its economic assessment in the Autumn, blowing a £25bn hole in the budget relative to the Spring Statement in March.

European Session - Nestle Rallies 7.5%

European stock markets saw a marginal uptick on Thursday as market participants processed a mix of company earnings, following a week of volatility driven by tariff concerns.

The overall STOXX 600 index nudged up 0.06%. The day's movement was characterized by strong gains in the food and beverage sector being balanced out by losses in the travel and leisure sector.

The biggest winner was Nestle, the world’s largest packaged food company, whose stock climbed 7.59% after it reported sales growth that was better than expected and announced plans to cut 16,000 jobs.

However, not all companies shared this success. French spirits maker Pernod Ricard dipped 0.77% after confirming a previously warned-about 7.6% drop in sales, which it blamed on weak consumer demand and stores reducing inventory in China and the US.

In the UK, hotel operator Whitbread fell 7.1% after reporting a drop in half-year profit due to lower food and beverage sales. On the positive side, Franco-German lab equipment company Sartorius and its French unit both saw their shares jump over 9% after releasing positive quarterly results and forecasts.

On the FX front, the U.S. dollar weakened slightly on Thursday, continuing its recent slide, as concerns over the trade war between the US and China weighed on sentiment.

The dollar index, which tracks the dollar's value against other currencies, was down 0.16% and heading for a weekly loss.

In Europe, the euro climbed 0.12% to a one-week high as traders became confident that French Prime Minister Sebastien Lecornu would survive two no-confidence votes in parliament, which helps reduce political uncertainty for the currency.

Meanwhile, the Japanese yen briefly strengthened before leveling out, as the country's s ruling party began talks with a potential new partner (the Japan Innovation Party) that could help the pro-stimulus candidate Sanae Takaichi secure the Prime Minister position next week.

Separately, the Australian dollar slipped 0.36% after new data revealed that unemployment had hit a four-year high in September, increasing the likelihood that Australia's central bank might cut interest rates.

Currency Power Balance

zoom_out_map

Source: OANDA Labs

Oil prices increased by about 1% on Thursday, rebounding from earlier losses, after a statement from US President Donald Trump suggested that global supply could tighten.

Trump claimed that Indian Prime Minister Narendra Modi had promised India would stop buying oil from Russia. Since India and China are currently the two largest buyers of Russian crude, a halt by India would remove a significant amount of discounted oil from the market, potentially driving up prices elsewhere.

This news caused both Brent crude and U.S. West Texas Intermediate (WTI) futures to rise by around 1%, with Brent trading at $62.47 a barrel and WTI at $58.85 a barrel.

Gold prices soared to yet another record high on Thursday, marking the fifth day in a row of gains, as investors continue to rush toward the metal as a safe investment.

This sustained rally is being fueled by multiple sources of global and domestic uncertainty. Spot gold rose to $4,232.39 per ounce, after setting an all-time record of $4,241.77 in the Asian session..

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

The most important issue for financial markets right now is the unstable relationship between the US and China, particularly ahead of two critical dates.

Presidents Trump and Xi are scheduled to meet around October 29-31 at the APEC summit in Korea, just before the November 10th deadline when US tariffs on Chinese goods are set to jump significantly if no agreement is reached.

The big unknown is whether China's aggressive move to impose export controls on rare earth materials is a genuine, long-term threat or simply a powerful tactic to gain concessions in the upcoming talks.

This step by China has clearly alarmed G7 nations, who are preparing a rare joint statement of protest. While US Treasury Secretary Scott Bessent has hinted at a longer extension on existing tariffs if tensions ease, the failure to resolve these rare earth controls could lead to a very difficult and volatile few weeks for markets worldwide.

Due to the US government shutdown, no key economic data is being released today. Instead, attention will turn to speeches being given by two Federal Reserve officials, Christopher Waller and Stephen Miran, later this afternoon (around 3:00 PM CET).

Both of these officials are known for favoring a cautious approach, or even cuts, to interest rates, which could put slight downward pressure on the US dollar. As a result, the dollar index could remain close to the 98.50 level today.

zoom_out_map

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 has broken below the 100-day MA.

However the most recent four-hour candle has closed as an inverted hammer candlestick which does hint at further upside.

The period-14 RSI is trading below the 50 level hinting at bearish momentum. If this breaks back above the 50 mark, we could see the FTSE 100 rally back toward the Tuesday highs around the 9500 mark.

Meanwhile a rejection at current price levels could set the FTSE up to retest support at 9357 before the 200-day MA at 9326 comes into focus.

FTSE 100 Index Four-Hour Chart, October 16. 2025

zoom_out_map

Source: TradingView.com (click to enlarge)

Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

Opinions are the authors'; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. The provided publication is for informational and educational purposes only.
If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please refer to the MarketPulse Terms of Use.
Visit https://www.marketpulse.com/ to find out more about the beat of the global markets.
© 2025 OANDA Business Information & Services Inc.