Market Outlook
Last Updated: 10 Oct 25 5 min read
A relatively quiet macro news week this week, with the continued US government shutdown delaying data releases and postponing further analysis of the state of the US economy. Elsewhere we have had political turmoil continuing in France with the fastest resignation of the Premier in history and the surprise win of the first Japanese female leader, another fact for the history books.
Investors of French assets were jittery after Sebastian Lecornu resigned his premiership on Monday, after failing to get consensus from lawmakers on a new budget for 2026. Sticking points were the lack of progress on pushing through pension reforms, which make up a significant portion of current and planned government expenditure. The spread between French and German government yields remains at record wides, with 10-year French bond yields 0.8% higher than similar German maturities.
The Gaza conflict may have tentatively concluded after President Trump helped broker a ceasefire in exchange for a release of the remaining hostages. Crude oil didn’t move significantly on the news, after having already fallen significantly on the OPEC+ planned production increases. Another commodity – Gold - however has made history after reaching an all-time of 4,000 USD per ounce, doubling in less than two years. Diversification away from the US dollar, geopolitical uncertainty and fear of untamed fiscal spending being catalysts for the rise.
AI themed stocks have continued their bull run, with the announcement of the tie up between OpenAI and AMD, leading to a 35% increase in the share price of the chip maker post the news.
Markets remain reactive to a mix of economic and geopolitical signals, with recent moves reflecting uncertainty around inflation, growth, and policy direction. While corporate earnings have held up in many regions, investor sentiment has become more cautious. As inflation trends diverge and labour markets evolve, central banks may take increasingly different paths - raising the potential for greater dispersion across asset classes and regions in the period ahead.
Equities |
1 Week |
YTD |
1 Year |
|---|---|---|---|
S&P 500 |
0.30% |
15.66% |
18.03% |
FTSE 100 |
0.07% |
19.67% |
19.37% |
Euro Stoxx 50 |
-0.22% |
17.70% |
16.21% |
MSCI Asia Pacific ex Japan |
0.10% |
28.10% |
19.30% |
MSCI China |
-0.87% |
41.85% |
30.91% |
Source: Bloomberg as at 8.53am on 10.10.25
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