October 15th, London Update: Global Markets and Geopolitical Briefing

Show Notes — October 15, 2025


Focus: FX, Commodities, Trade & Geopolitics


FX

• USD softened after Fed Chair Powell said downside risks to jobs had increased, noting those risks justified September’s rate cut and that balance-sheet runoff may soon end.
• EUR/USD steady near 1.16 as French political uncertainty eased when the Socialist Party confirmed it will not back a no-confidence vote after pension reform was suspended.
• GBP recovered from Tuesday’s jobs-driven losses after BoE’s Bailey reiterated that labour-market data support his view of cooling employment.
• JPY strengthened amid safe-haven demand, with USD/JPY testing the 151.00 level as the dollar lost momentum.
• AUD/NZD firmer on better risk tone and CNH support; RBA officials highlighted upside inflation risks in Q3, keeping policy data-dependent.
• MAS held policy settings unchanged, forecasting core inflation to trough soon before rising through 2026.

Commodities

• Oil prices traded subdued after the IEA cut its 2025 global demand forecast to +710k bpd and flagged a possible 4mln bpd surplus next year as supply rises against weak consumption.
• Gold extended record highs, driven by expectations of Fed easing and U.S.–China trade friction.
• Copper stayed rangebound following prior declines, weighed by mixed global trade signals and a firmer USD earlier in the week.

Tariffs & Trade

• U.S.–China relations remained tense: President Trump said he’s considering ending trade in cooking oil with China, citing failure to buy U.S. soybeans.
• USTR noted six months of constructive dialogue but described China’s rare-earth export measures as disproportionate, warning that the planned 100% tariffs could take effect earlier if progress stalls.
• China’s MOFCOM responded that its rare-earth controls are licensing, not a ban, and accused Washington of intimidation while imposing special port fees on U.S.-linked ships and launching a probe into Section 301 tariffs’ impact on Chinese shipping.

Europe & Policy Signals

• ECB’s Villeroy said the next policy move is more likely a rate cut than a hike and that U.S. tariffs will have negligible effects on Eurozone inflation.
• ECB’s Makhlouf described inflation as near target levels.
• UK Chancellor Rachel Reeves is reviewing ISA reforms and a mix of tax rises and spending cuts ahead of the November Budget to bolster fiscal headroom.

Geopolitics

• Middle East:
• U.S. President Trump declared “phase two” in the Israel–Hamas peace process and reaffirmed that “the job is not done,” while Israel confirmed sporadic breaches of the ceasefire line in Gaza.
• The rhetoric helped unwind part of the geopolitical risk premium embedded in crude prices.
• Russia–Ukraine:
• President Zelensky will visit Washington on Friday to discuss air defence support and potential delivery of Tomahawk missiles.
• EU Commission confirmed new funding for a special tribunal to prosecute Russian aggression.
• Other Regions:
• The U.S. struck a narcotrafficking vessel linked to a designated terrorist organisation near Venezuela.
• Japan’s political impasse persisted after its parliamentary committee failed to set a date for the next leadership vote.

What to Watch Next

• Upcoming Fed commentary (Powell, Waller, Bostic) for clarity on the easing path.
• Eurozone Industrial Production and German fiscal developments for near-term EUR sentiment.
• China’s trade retaliation follow-through and potential U.S. tariff timing.
• IEA/OPEC updates for confirmation of oil surplus expectations.
• Zelensky–Trump meeting on October 17 for any geopolitical or energy-market implications.