General Market Analysis – 31/10/25

US Stocks Hit on Mixed Earnings and Fed – Nasdaq Down 1.57%

US stocks took a hit in trading yesterday as mixed earnings reports from big tech players increased concerns about AI spending, and the ‘hawkish cut’ from the Fed continued to weigh. The Dow fell 0.23% to 47,522, but the pain was more pronounced in the S&P, which lost 0.99% to 6,822, and the Nasdaq, which fell 1.57% to 23,581. FX markets continued to digest yesterday’s Fed cut and holds from both the Bank of Japan and the European Central Bank, with the DXY up 0.33% to 99.53. US yields also gained ground again, with the 2-year up 1.1 basis points to 3.609% and the 10-year up 2.1 basis points to 4.097%. Oil markets were relatively steady as traders digested the trade truce between China and the US, with Brent down 0.29% to $64.73 and WTI up 0.15% to $60.57, while gold took off again, jumping 2.4% on the day to close at $4,024.54 an ounce.

USDJPY Back in Focus for Longer-Term FX Players

It has been a busy week again for FX traders, with a raft of major central bank updates hitting the markets for players to digest. Rate moves all went in line with expectations, with both the Bank of Canada and the Fed cutting, and the Bank of Japan and the ECB keeping rates on hold. However, the surprises came in forward guidance from two major banks that now have longer-term interest rate differential players looking for bigger moves in the weeks ahead. The FOMC surprised the market with a much less dovish update on the back of continued inflation issues and a lack of data moving forward (due to the government shutdown), while the Bank of Japan held rates and pulled back on expectations for a rate hike in December, with Governor Kazuo Ueda indicating that he could wait out the impact of new government policy on data for a few months. USDJPY has risen nearly 3% from its low on Wednesday and is now trading near key technical resistance. A break above recent highs just under 154.50 could see the move extend over the next few days and weeks to challenge the annual high of 158.87 set in January this year.

Another Volatile Day Expected for Traders

Traders are expecting to see more moves in the sessions ahead today as the market continues to digest a raft of updates from the past couple of days, as well as some fresh data points. Major central bank moves, trade updates between the US and China, and some big company earnings reports will all be competing in investors’ analysis today, and they should keep traders busy up to the New York 5 p.m. bell. The Asian session sees some key data out of both Japan and China today, with the initial focus on the Tokyo Core CPI data (exp. +2.6% y/y) before focus switches to China for the Manufacturing PMI (exp. 49.6) and Non-Manufacturing PMI (exp. 50.1) numbers. The London session will see the release of the EU’s Flash CPI (exp. +2.1%) and Core Flash CPI (exp. +2.3%) data, with moves expected in the euro around the release. The New York session will see Canadian GDP (exp. 0.0% m/m) data released early in the day before updates from Fed members Logan, Bostic, and Hammack later in the session.

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