Markets navigated heightened volatility on Wednesday as traders weighed mixed signals from U.S.-China trade negotiations against persistent labor market concerns and inflation pressures, with gold breaking through $4,200 for the first time while equities posted modest gains despite intraday swings.
The session highlighted the complex policy challenges facing central banks, as the Federal Reserve’s latest Beige Book revealed ongoing hiring weakness alongside stubborn cost pressures, while the government shutdown delayed key economic data releases just days before the Fed’s October 29 policy decision.
Check out the forex news and economic updates you may have missed in the latest trading session!
Headlines & Data:
- Australia Westpac Leading Index for September 2025: 0.0% m/m (-0.1% m/m previous)
- China Consumer Price Index Growth Rate for September 2025: 0.1% m/m (0.1% m/m forecast; 0.0% m/m previous); -0.3% y/y (-0.2% y/y forecast; -0.4% y/y previous)
- China PPI for September 2025: -2.3% y/y (-2.4% y/y forecast; -2.9% y/y previous)
- Japan Industrial Production Final for August 2025: -1.6% y/y (-1.3% y/y forecast; -0.4% y/y previous); -1.5% m/m (-1.2% m/m forecast; -1.2% m/m previous)
- China New Loans for September 2025: 1,290.0B (1,250.0B forecast; 590.0B previous)
- China M2 Money Supply for September 2025: 8.4% (8.6% forecast; 8.8% previous)
- Euro area Industrial Production for August 2025: -1.2% m/m (-2.2% m/m forecast; 0.3% m/m previous); 1.1% y/y (-0.7% y/y forecast; 1.8% y/y previous)
- U.S. MBA 30-Year Mortgage Rate for October 10, 2025: 6.42% (6.43% previous)
- U.S. MBA Mortgage Applications for October 10, 2025: -1.8% (-4.7% previous)
- Canada Manufacturing Sales Final for August 2025: -1.0% m/m (-1.5% m/m forecast; 2.5% m/m previous)
- U.S. NY Empire State Manufacturing Index for October 2025: 10.7 (-5.0 forecast; -8.7 previous) – significantly better than expected
- Fed Governor Stephen Miran said trade tensions between China and the U.S. support the case for further rate cuts, noting increased downside risks to growth
- Federal Reserve’s October 2025 Beige Book report: U.S. economic activity little changed overall since early September, with labor market remaining largely stable but showing growing signs of weakness including increased layoffs and hiring freezes
- Bank of England Governor Andrew Bailey voiced concerns over the U.K.’s employment environment, with unemployment rate rising to 4.8% in the three months through August
- Treasury Secretary Scott Bessent proposed a longer pause on high U.S. tariffs on Chinese goods in return for Beijing putting off its plan to tighten limits on critical rare earths, with President Trump reportedly “a go” on meeting President Xi later this month
Broad Market Price Action:
Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView
Wednesday’s trading session saw divergent performance across major asset classes as markets processed mixed signals from economic data and ongoing trade negotiations.
Gold dominated market attention, surging 1.65% to break above $4,200 per ounce for the first time in history. The precious metal’s advance likely reflected a combination of safe-haven demand amid U.S.-China trade tensions, expectations for Federal Reserve rate cuts, and concerns about the prolonged government shutdown. Silver also posted strong gains of over 2%, attempting to reclaim the $53 level.
The S&P 500 showed resilience despite intraday volatility, gaining 0.48% to close near 6,670. The index rallied as much as 1.2% during the session before pulling back, then recovering into the close. Financial stocks provided support, with Morgan Stanley and Bank of America jumping on solid earnings results. Technology shares also contributed to gains, boosted by positive comments about artificial intelligence from ASML Holding.
WTI crude oil posted a modest gain to close around $58.70 per barrel, recovering from intraday lows near $58.20. While global oil demand reached record highs, prices remained subdued due to continued supply additions from OPEC+. The market likely found some support from Treasury Secretary Bessent’s comments about potential tariff pauses with China.
The 10-year Treasury yield held steady above 4.0%, showing little change on the day as bond markets balanced expectations for Fed rate cuts against persistent inflation pressures highlighted in the Beige Book. The stability in yields came despite ongoing uncertainty around the government shutdown’s impact on upcoming economic data releases.
Bitcoin declined 1.75% to trade around $111,057, extending its retreat from the recent record high of $126,272 last week. The cryptocurrency has declined over six consecutive trading days, losing ground as risk appetite in traditional markets improved and some traders took profits after the sharp rally earlier in October.
FX Market Behavior: U.S. Dollar vs. Majors:
Overlay of USD vs. Majors Chart by TradingView
The U.S. dollar experienced a challenging session on Wednesday, declining against most major currencies to finish as the second-worst performer among the majors, with movements driven by shifting expectations around Federal Reserve policy and U.S.-China trade dynamics.
During the Asian session, the dollar fell against major currencies as traders reacted to China’s inflation data and monetary policy updates. The People’s Bank of China set the USD/CNY fixing below 7.10, a stronger-than-expected signal that triggered broad dollar selling across both G10 and Asian currencies.
The dollar’s trajectory shifted during the London session, where it traded mixed against major currencies as volatility declined with no fresh catalysts. The greenback possibly found some support as traders awaited the Federal Reserve’s Beige Book release and possibly some GBP weakness as traders processed comments from Bank of England Governor Bailey who shared concerns about U.K. employment.
The dollar’s weakness resumed during the U.S. session, possibly a reaction to Fed Governor Miran’s dovish remarks about trade tensions supporting the case for rate cuts also weighed on the currency. The dollar then stabilized after the London close as Treasury Secretary Bessent’s comments about potential tariff negotiations with China created cross-currents. Ahead of the the Wednesday’s close, the markets got the latest release of the Fed’s Beige Book to chew on, which highlighted persistent labor market softness and ongoing inflation pressures.
Upcoming Potential Catalysts on the Economic Calendar
- New Zealand Food Price Index for September 2025 at 9:45 pm GMT
- Australia RBA Kent Speech at 9:50 pm GMT
- Japan Machinery Orders for August 2025 at 11:50 pm GMT
- Australia Employment Change for September 2025 at 12:30 am GMT
- Australia Unemployment Rate for September 2025 at 12:30 am GMT
- Japan BoJ Tamura Speech at 1:30 am GMT
- U.K. Manufacturing & Industrial Production for August 2025 at 6:00 am GMT
- U.K. Goods Trade Balance for August 2025 at 6:00 am GMT
- U.K. GDP for August 2025 at 6:00 am GMT
- Swiss SECO Economic Forecasts at 7:00 am GMT
- Euro area Trade Balance for August 2025 at 9:00 am GMT
- Canada CFIB Business Barometer for October 2025 at 11:00 am GMT
- U.S. Fed Barkin Speech at 12:00 pm GMT
- Canada Housing Starts for September 2025 at 12:15 pm GMT
- U.S. Initial Jobless Claims for October 4 and October 11, 2025 (tentative)
- U.S. Philadelphia Fed Manufacturing Index for October 2025 at 12:30 pm GMT
- U.S. Retail Sales for September 2025 (tentative – delayed due to government shutdown)
- U.S. PPI for September 2025 (tentative – delayed due to government shutdown)
- U.K. BoE Mann Speech at 1:00 pm GMT
Thursday’s calendar features several potentially market-moving events, though the ongoing U.S. government shutdown means some key data releases remain tentative. Australia’s employment report will be closely watched for signs of labor market resilience in the face of global economic headwinds, with implications for Reserve Bank of Australia policy expectations.
U.K. GDP data for August could influence Bank of England rate cut timing, particularly after Governor Bailey’s recent concerns about employment weakness.
The tentative U.S. data releases – including retail sales, PPI, and jobless claims – would provide crucial insights into the economy if published, though their delayed status due to the shutdown means markets may need to continue relying on alternative indicators.
U.S.-China trade headlines remain a wildcard, with any developments on Treasury Secretary Bessent’s proposed tariff pause potentially driving significant market moves. Multiple Federal Reserve speakers throughout the day will be scrutinized for views on the appropriate pace of rate cuts amid conflicting signals on growth and inflation.
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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