October 16th, London Update: Global Markets and Geopolitical Briefing

Show Notes — October 16, 2025


Focus: FX, commodities, trade/tariffs, and geopolitics (no equities, fixed income, or crypto).


Today’s Briefing (summary)

• Dollar softer on cautious Fed tone; euro steadier, sterling firmer; yen supported by BoJ hawkish hints before easing back.
• Gold holds above record territory; oil capped by U.S. stock builds despite supply-risk headlines; copper subdued.
• Washington–Beijing trade rhetoric heats up again; selective signs of pragmatism from USTR; ancillary talks with South Korea and Mexico progress.
• Middle East ceasefire remains fragile; stabilization planning advances; Ukraine war headlines keep energy/grain routes in focus.

FX

• USD (DXY): Pressured after Fed commentary highlighted rising risks to jobs and the endgame for balance-sheet runoff, keeping further easing in play.
• EUR: Gradual grind higher above 1.16, helped by calmer French political optics and Eurozone industrial production resilience.
• GBP: Back above 1.34 as the Chancellor signals higher taxes for the wealthy in the upcoming budget, while BoE notes a softening labor market.
• JPY: Brief haven bid and a nudge from BoJ’s Tamura (arguing rates should move closer to neutral) before retracing on broader dollar flows.
• AUD/NZD: Mixed; AUD softer after weaker jobs data (higher unemployment), NZD steadier alongside a firmer yuan fix from the PBoC.

Commodities

• Gold: Holds above USD 4,200/oz on softer USD and expectations of additional Fed easing.
• Crude: Early lift faded after private data showed larger-than-expected U.S. crude and gasoline builds; Saudi Aramco warns of future shortages without investment; reports that India may gradually trim Russian oil imports add to flow uncertainty.
• Copper: Rangebound-to-soft as U.S.–China tension and weak Chinese CPI/PPI temper risk appetite.

Trade & Tariffs

• U.S.–China: President Trump characterizes tariffs as a national-security tool and says the U.S. is “in a trade war”; USTR hints Chinese export curbs may not be implemented but keeps tariff timing open.
• South Korea: Signals optimism on landing a tariff understanding with the U.S.; large U.S. investment pledge referenced in talks.
• Mexico: Negotiating discounted tariffs on heavy truck parts with the U.S.
• Appliance probe: U.S. officials report no evidence of widespread undervaluation/tariff evasion in recent corporate allegations.
• Shutdown overhang: Senate set to leave town without a deal; continued data delays and macro drag are in focus.

Geopolitics

• Middle East: Ceasefire framework persists but is fragile. Israel orders plans ready if fighting resumes; Hamas says it has transferred all recoverable hostages/remains so far; U.S. says aid coordination improving and a multinational stabilization force is forming.
• Russia–Ukraine: U.S. comments float potential settlement space while Kyiv signals offensive ambitions; markets watching for implications to energy/grain corridors.
• Venezuela: U.S. confirms authorizing CIA operations; Caracas condemns as a breach of international law—adds a regional flashpoint.

What to Watch Next

• Data & Fed/ECB/BoE speak: UK monthly GDP/output, Eurozone trade balance, Philly Fed, and a heavy slate of central-bank remarks amid U.S. shutdown-thinned releases.
• USD path: Whether cautious Fed tones keep the dollar offered into delayed inflation prints.
• Oil & gold: Follow-through after U.S. inventory surprises; sensitivity to ceasefire headlines and investment rhetoric.
• Tariff tape: Any concrete U.S.–China enforcement steps vs. renewed talks—and progress on Korea/Mexico tracks.