market outlook

Market Summary and Key Outlook (as of October 13, 2025)

Josh

— 2 min read

Global Financial Condition Highlights

  • The U.S. government shutdown extends into its fourth week, delaying key economic releases (CPI, NFP, unemployment) and clouding Fed policy guidance.
  • Geopolitical flashpoints (U.S.–China tariff threats, Middle East developments) drive frequent risk-on/risk-off swings.
  • Japan’s recent election has fueled JPY volatility, with carry-trade flows now reversing.

Currencies & Forex Markets

  • USD/JPY: Bearish near term. The post-election JPY sell-off has likely run its course, and softened U.S.–China rhetoric may spark a pullback. Medium-term direction hinges on BoJ intervention signals or renewed tariff threats.
  • AUD/JPY & NZD/JPY: Remain under pressure as China tensions keep risk sentiment subdued. Relief rallies on deescalation are likely temporary.
  • AUD/USD & EUR/USD: USD strength—driven by safe-haven demand amid the shutdown and political uncertainties in France—has capped further declines, but downside risks persist if U.S. data surprises.
  • USD/CHF: Short-term downtrend as CHF benefits from risk-off flows. A sustained risk-on environment would see USD/CHF recover.

Major Asset & Equity Outlooks

  • Gold: Bullish overall—with key psychological level at 4,000 serving as both profit-taking magnet and re-entry zone. While long-term drivers (central bank buying, ETF inflows) remain intact, sharp equity sell-offs will briefly drag gold lower before another leg up.
  • S&P 500: Tactical long opportunity in the strong mid-October to mid-November seasonal window. A short-term rebound is likely after Trump’s deescalation, but renewed tariff risks around the November 1 deadline warrant caution.
  • Bitcoin: Bullish seasonal setup—with spot BTC ETFs surpassing $1 billion in opening-hour volumes—offering a partial hedge against U.S. data blackouts and monetary policy uncertainty.
  • Silver: Mixed. A false break above $50/oz could trigger a counter-trend squeeze, but overall safe-haven bid supports higher levels over time.

Summary

  • Primary drivers: U.S. data blackout from the shutdown, evolving U.S.–China trade rhetoric, and Japan election flows.
  • Safe havens (JPY, CHF, Gold, Bitcoin) outperform during periods of heightened political risk.
  • Risk assets (AUD/JPY, NZD/JPY, equities) rally on temporary deescalations but remain vulnerable to headline shocks.

Overall: The market remains in a tug-of-war between intermittent risk-on moves (spurred by easing rhetoric) and entrenched safe-haven demand amid policy and geopolitical uncertainty. Tactical positioning should lean on clear technical triggers and pay close attention to headline catalysts—especially U.S. government funding developments and China tariff headlines.

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