Fed and IMF Warnings Shake Markets - Gold Jumps While Oil Keeps Falling - 20.10.2025

The live dollar index remains a key focus, with its recent weakness contributing to a surge in safe-haven assets like Gold. The outlook for Fed rate cuts and ongoing US government shutdown fears are major drivers.

• EURUSD: Trades around the 1.166 level. Eurozone specific data, flash PMIs and consumer confidence will be monitored next week, but the pair is largely driven by US Dollar dynamics and the Fed's monetary policy outlook.
• GBPUSD: Market movements are influenced by the broader USD trend and upcoming UK inflation data.
• USDJPY: Yen stability is reportedly hinged on the Bank of Japan maintaining its current monetary policy, according to the US Treasury Secretary. Yen saw a sharp decline earlier amidst expectations of fiscal stimulus following Japanese political negotiations. The pair is highly sensitive to the differential in interest rate policy between the US and Japan.
• AUDUSD: The pair's movement is generally tied to global risk sentiment and commodity prices, particularly in relation to China's economic data (Q3 GDP is due).

US Indices ended the week in positive territory, while Asian and European markets generally saw declines, reflecting divergent sentiment and local factors.

Dow Jones Index, Nasdaq Index, S&P 500 Index: US markets (Dow Jones Industrial Average, Nasdaq Composite Index, and S&P 500 Index) finished up, continuing to show resilience largely driven by the boom in AI-related companies. However, the IMF has warned of a possible "sudden, sharp correction" given the concentration risk in the S&P 500.

Nikkei Index: The Japanese index closed down, following a recent rally. Yen stability and the country's new political/economic direction remain key drivers.

Hang Seng Index: The index closed lower, reflecting global uncertainty and ongoing investor concerns about the Chinese economy.

Australian Stock Index (ASX200): The index closed down, with flash PMI data expected next week to provide further direction.

Brent Crude Oil and WTI Crude prices have been under bearish pressure, posting a third consecutive weekly loss amid rising oversupply concerns and mixed signals on demand.

Oversupply Worries: The International Energy Agency projects a growing global crude glut in 2026. US crude inventories rose sharply, and US production hit a record high.

Geopolitical Headwinds: News of potential talks between Presidents Trump and Putin to discuss the war in Ukraine and the controversy surrounding whether India would halt Russian oil imports have added volatility. Brent futures settled near a five-month low below $61.3 per barrel.

Cryptocurrency markets are experiencing a pullback: Major cryptocurrencies have shown mixed signals, with prices consolidating after a volatile period.

• Bitcoin has been trading around the $107,000 level.
• Ether has been struggling to hold above the $4,000 mark.

Huobi founder Li Lin is set to launch a $1 billion Ether accumulator, indicating institutional interest, while some analysts remain bullish, citing supply tightening and surging institutional demand, predicting a potential push toward $10,000. However, both BTC and ETH lagged behind a rally in some altcoins.