market outlook

Market Summary and Key Outlook (as of September 29, 2025)

Josh

29 Sep 2025 — 1 min read

Global Financial Condition Highlights

Fed remains dovish and focused on downside labor-market risks despite firm inflation prints; market still pricing in rate cuts beginning in October, with NFP as the key catalyst.
U.S. government shutdown risk is elevated—could delay data releases and force assumption of worse labor outcomes, reinforcing Fed easing bias.
Escalating geopolitics (Russia–Ukraine tensions, Baltic Sea tanker risks) and renewed U.S. tariff threats under Trump are feeding safe-haven flows.

Currencies & Forex Markets

USD (Broad Dollar): Underlying bearish trend intact—driven by dovish Fed tilt and risk of shutdown. Near-term quarter-end rebalancing flows have supported the greenback, but sustained weakness expected once flows subside and labor data disappoints.
EUR/USD: Bullish EUR bias remains in place. ECB hawkish tilt and EU fiscal/defense reforms have underpinned EUR, while Fed easing looms. NFP strength would dent the view, but long-term setup favors EUR appreciation.
USD/JPY: Tactical bounce on quarter-end flows, but long-term USD bearish outlook points to lower levels. Structural downtrend intact; look for moves toward prior lows ahead of renewed Fed cuts.
AUD/USD: Avoid on potential shutdown-induced risk-off; high-beta AUD would likely underperform if equities slide. RBA is data-driven but quarterly context matters more than recent upside surprise in monthly CPI.

Major Asset & Equity Outlooks

Gold (XAU/USD): Strongly bullish. Cleared 3,800 and carving a corrective bull flag—pending breakout target 3,850 into mid-week, with medium-term ambitions toward 4,000. Drivers: Fed independence threats, geopolitical escalation, and safe-haven demand ahead of U.S. labor data.
Oil (WTI/Brent): Near-term upside risk as Baltic Sea tanker chokepoints and sanctions talk revive supply-concerns.
Equities (S&P 500): Quarter-end flows supportive, but shutdown risk and renewed tariff volatility could trigger pullbacks.
Bitcoin & Solana: Long-term bullish positions intact; remain leveraged to broader risk-on recovery and institutional flows, but small sizing given near-term equity sentiment.

Summary

U.S. data calendar and government funding impasse will drive risk sentiment this week.
Fed easing expectations remain central; any data‐driven deviation will recalibrate USD positioning.
Gold stands out as the top directional play—bullish setup backed by fundamental and technical catalysts.

Overall: Dovish Fed + shutdown risk = softer USD; safe havens (gold, selected metals) preferred while event risk unfolds.

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