The Thursday session was dominated by credit quality worries after two regional lenders disclosed problematic loans, triggering widespread risk aversion despite earlier optimism from strong bank earnings and continued AI investment momentum. Turns out investors aren’t fond of words like “fraud” and “charge-off” appearing in the same sentence as “regional bank.” Meanwhile, gold shrugged off the drama to party like it’s 1979, blasting past $4,300 to fresh record highs.
Check out the forex news and economic updates you may have missed in the latest trading session!
Headlines & Data:
Asia-Pacific Data:
- New Zealand Food Price Index for September 2025: 4.1% (4.7% forecast; 5.0% previous)
- Japan Machinery Orders for August 2025: -0.9% m/m (0.5% m/m forecast; -4.6% m/m previous); 1.6% y/y (4.7% y/y forecast; 4.9% y/y previous)
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Australia Employment Change for September 2025: 14.9k (19.0k forecast; -5.4k previous)
- Australia Unemployment Rate for September 2025: 4.5% (4.3% forecast; 4.2% previous)
European Data:
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U.K. GDP for August 2025: 0.1% m/m (0.1% m/m forecast; 0.0% m/m previous); 1.3% y/y (1.4% y/y forecast; 1.4% y/y previous)
- U.K. Industrial Production for August 2025: 0.4% m/m (0.5% m/m forecast; -0.9% m/m previous); -0.7% y/y (-0.2% y/y forecast; 0.1% y/y previous)
- U.K. Manufacturing Production for August 2025: 0.7% m/m (0.7% m/m forecast; -1.3% m/m previous); -0.8% y/y (-0.1% y/y forecast; 0.2% y/m previous)
- U.K. Balance of Trade for August 2025: -3.39B (-5.1B forecast; -5.26B previous)
- Euro area Trade Balance for August 2025: 1.0B (9.1B forecast; 12.4B previous)
U.K. NIESR Monthly GDP Tracker for September 2025: 0.3% (0.2% forecast; 0.3% previous)
North American Data:
- Canada CFIB Business Barometer for October 2025: 46.3 (50.7 forecast; 50.2 previous)
- Canada Housing Starts for September 2025: 279.2k (230.0k forecast; 245.8k previous)
- U.S. Philadelphia Fed Manufacturing Index for October 2025: -12.8 (4.0 forecast; 23.2 previous)
- U.S. NAHB Housing Market Index for October 2025: 37.0 (34.0 forecast; 32.0 previous)
Other News:
- Zions Bancorp fell 13% after disclosing a $50 million charge-off for a loan involving allegations of fraud, while Western Alliance Bancorp dropped 11% on exposure to the same borrowers
- President Trump announced a productive phone call with Russian President Putin, with both leaders agreeing to meet in Budapest to discuss ending the Russia-Ukraine war
- French Prime Minister Sebastien Lecornu survived two no-confidence votes in parliament after suspending pension reforms
- Bank of England Mann indicated evidence that inflation is sticking above the 2% target
- Richmond Fed President Thomas Barkin observed that consumers are still spending but more constrained than during pandemic years
Broad Market Price Action:
Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView
Thursday’s session evolved from cautious optimism into pronounced risk aversion as credit concerns overshadowed positive earnings momentum and continued strength in AI-related sectors.
Gold dominated once again, surging to new all-time highs above $4,300 per ounce. The precious metal gained nearly 8% for the week, arguably supported by U.S.-China trade tensions, expectations for further rate cuts, and growing political uncertainty in the U.S. With the government shutdown now in its fifteenth day, markets have lost reliable guidance from economic releases and are instead anchoring on trade flows and risk sentiment. Silver also advanced over 2% to reclaim the $53 level.
WTI crude oil declined 2.39% to close near $56.70, likely pressured by concerns over the U.S.-China trade dispute theme and prospects of an impending oversupply after the IEA raised its surplus estimates earlier in the week.
Equity markets experienced notable volatility through the U.S. trading session. The S&P 500 initially gained slight ground through Asia and London trade, likely on positive bank earnings expectations, later confirmed by positive results from major banks including Bank of America and Morgan Stanley. However, the index ultimately fell 0.6% as concerns about regional bank credit quality and loan losses triggered broad selling pressure.
Treasury yields declined sharply as investors sought safe-haven assets. The 10-year Treasury yield fell to 3.976%, its lowest end-of-day level in just over a year, down from 4.045% the previous session. The two-year yield finished at 3.426%, down from 3.503%. Markets almost fully priced in a 25-basis-point rate cut at the October meeting, with a marginal 2% likelihood of unchanged rates.
Bitcoin fell 2.95% to $107,878.80, remaining well below last week’s record high of $126,223 as renewed trade tensions and regional banking concerns weighed on risk appetite across crypto markets.
FX Market Behavior: U.S. Dollar vs. Majors:
Overlay of USD vs. Majors Chart by TradingView
The U.S. dollar traded mixed throughout Thursday’s session, showing resilience during Asian and early European hours before weakening during the U.S. afternoon as soft economic data and banking sector concerns undermined sentiment.
During the Asian session, the dollar initially declined before rebounding against major currencies through the morning London session. There were no major USD catalysts to point to, so an argument could be made that traders were awaiting fresh trade and government shutdown news, and/or trading mainly as a counter currency.
The U.S. session brought heightened volatility following weak economic data. The Philadelphia Fed Manufacturing Index plunged to -12.8 from 23.2 previously, far below the 4.0 forecast, signaling a sharp deterioration in manufacturing conditions. The dollar traded mixed against major currencies during the afternoon, arguably closing with a slightly net bearish tone as it gained only against the New Zealand dollar and Australian dollar while declining versus most other majors.
Upcoming Potential Catalysts on the Economic Calendar
- Japan BoJ Uchida Speech at 6:35 am GMT
- Euro area Consumer Price Index Growth Rate Final for September 2025 at 9:00 am GMT
- U.K. BoE Pill Speech at 9:35 am GMT
- Euro area ECB Donnery Speech at 11:00 am GMT
- Canada Foreign Securities Purchases for August 2025 at 12:30 pm GMT
- U.S. Housing Starts for September 2025 at 12:30 pm GMT
- U.S. Building Permits Prel for September 2025 at 12:30 pm GMT
- U.S. Import & Export Prices for September 2025 at 12:30 pm GMT
- Germany Bundesbank Mauderer Speech at 12:45 pm GMT
- Germany Bundesbank Nagel Speech at 12:45 pm GMT
- U.S. Fed Musalem Speech at 4:15 pm GMT
- U.K. BoE Breeden Speech at 4:30 pm GMT
- U.S. Overall Net Capital Flows for August 2025 at 8:00 pm GMT
Friday’s session will likely be dominated by three key themes. First, U.S.-China trade developments remain critical after President Trump’s announcement of a planned meeting with Chinese President Xi Jinping and Russian President Putin in Budapest, with markets watching for any signs of de-escalation or further deterioration.
Second, speeches from Bank of Japan, Federal Reserve, and Bank of England officials will be scrutinized for policy guidance, particularly given recent mixed economic signals and ongoing rate cut expectations.
Third, any fresh developments regarding the U.S. government shutdown—now in its fifteenth day—could significantly impact market sentiment, as the absence of reliable economic data releases has left investors particularly sensitive to unexpected information.
Stay frosty out there forex friends and don’t forget to check out our Forex Correlation Calculator when taking any trades!
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