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EUR/JPY's pullback from 177.91 extended lower last week but failed to sustain below 175.03 resistance turned support. Initial bias remains neutral this week and further rally is in favor. Above 176.44 minor resistance will turn bias back to the upside for retesting 177.91. However, decisive break of 175.03 will bring deeper decline back to 172.24 support instead.

In the bigger picture, up trend from 114.42 (2020 low) is in progress and should target 61.8% projection of 124.37 to 175.41 from 154.77 at 186.31. Firm break of 172.24 support will suggests that it has turned into consolidations again. But still, outlook will continue to stay bullish as long as 55 W EMA (now at 167.16) holds, even in case of deep pullback.

In the long term picture, up trend from 94.11 (2021 low) is in progress. Next target is 138.2% projection of 94.11 to 149.76 (2014 high) from 114.42 (2020 low) at 191.32. This will remain the favored case as long as 154.77 support holds.

EUR/GBP stayed in sideway trading last week and outlook is unchanged. Initial bias remains neutral this week first. On the downside, break of 0.8654 will resume the fall from 0.8750. Decisive break there will indicate bearish reversal and target 38.2% retracement of 0.8221 to 0.8750 at 0.8548. Nevertheless, on the upside, break of 0.8750/2 will resume the rise from 0.8221 towards 0.8867 fibonacci level.

In the bigger picture, rise from 0.8221 medium term bottom is seen as a corrective move. While further rally cannot be ruled out, upside should be limited by 61.8% retracement of 0.9267 to 0.8221 at 0.8867. Considering bearish divergence condition in D MACD, firm break of 0.8631 support will be the first sign that this corrective bounce has completed. Sustained trading below 55 W EMA (now at 0.8549) will confirm, and bring retest of 0.8221 low.

In the long term picture, price action from 0.9499 (2020 high) is seen as part of the long term range pattern from 0.9799 (2008 high). Range trading should continue between 0.8201 and 0.9499, until there is clear signal of imminent breakout.

EUR/AUD's strong rally last week suggests that corrective pattern from 1.8554 has completed with three waves to 1.7569. Nevertheless, since a temporary top was formed at 0.8160 after first rejection by 1.8155 resistance, initial bias is turned neutral this week first. On the upside, sustained break of 1.8155 will affirm this bullish case and bring retest of 1.8554 high next. However, break of 1.7818 will dampen this bullish view and turn focus back to 1.7569 support instead.

In the bigger picture, price actions from 1.8554 medium term top are seen as a corrective pattern, which might have completed already. Firm break of 1.8554 will resume larger up trend from 1.4281 (2022 low), and target 61.8% projection of 1.5963 to 1.8554 from 1.7569 at 1.9170. Nevertheless, break of 1.7569 support will delay the bullish case and extend the correction from 1.8554.

In the longer term picture, rise from 1.4281 is seen as the second leg of the pattern from 1.9799 (2020 high), which is part of the pattern from 2.1127 (2008 high). As long as 55 M EMA (now at 1.6506) holds, this second leg could still extend higher.

EUR/CHF's decline accelerated lower last week and the development indicates that consolidation pattern from 0.9218 has completed at 0.9452 already. Larger down trend should be ready to resume. Initial bias stays on the downside this week for 61.8% projection of 0.9660 to 0.9218 from 0.9452 at 0.9179. Firm break there will target 100% projection at 0.9010. Near term outlook will now stay bearish as long as 0.9311 support turned resistance holds, in case of recovery.

In the bigger picture, outlook remains bearish with EUR/CHF staying well inside long term falling channel after multiple rejection by 55 W EMA (now at 0.9395). Firm break of 0.9204 will resume the whole down trend from 1.2004 (2018 high). Next target is 61.8% projection of 1.1149 to 0.9407 from 0.9928 at 0.8851. Break of 0.9452 resistance is needed to be the first sign of medium term bottoming.

In the long term picture, overall long term down trend is still in progress in EUR/CHF. Outlook will continue to stay bearish as long as 55 M EMA (now at 0.9820) holds.

Week in review

Another week has passed by and the US government shutdown continues. Despite this the week was still full of volatility as markets grappled with the ongoing US-China stalemate as well as concerns around the US banking sector later in the week.

As a result safe havens continued to thrive with Gold prices soaring to near $4400/oz before falling around 2.7% on Friday. The drop in Gold came about as President Trump provided a sliver of hope on US-China relations saying "not sustainable" and that he would meet with Xi Jinping in South Korea in a few weeks.

US equities enjoyed a mixed week and struggled on Thursday weighed down by Banking Stocks. US banks borrowed nearly $15 billion from the Federal Reserve's Standing Repo Facility (SRF) on Wednesday and Thursday, the largest borrowing over a two-day period since the Covid-19 pandemic. Market participants were concerned about US credit markets as a result and whether that could affect valuations across markets.

The selloff on Thursday rippled through Asia overnight and weighed on European stocks on Friday wiping out weekly gains.

These concerns came about after major US banks reported stellar earnings earlier in the week.

Despite the mixed week for US and global equity markets, equity funds attracted inflows for a fourth straight week through October 15, as dovish comments from U.S. Federal Reserve Chair Jerome Powell reinforced expectations that the central bank will cut interest rates at its meeting later this month.

Across the globe, investors bought about $2.17 billion worth of stock funds this past week, a figure similar to the week before. This money mainly flowed into U.S. and Asian stock funds, which saw nearly $1 billion in inflows each.

Conversely, European stock funds saw a significant outflow of $1.62 billion, ending a ten-week period of continuous buying. Within the market, interest in funds focused on specific sectors surged by nearly 50%, with the Technology and Healthcare sectors leading all investments..

Source: LSEG

Next week the US reporting season heats up and could set the tone for global equity markets. After major banks reported this past week, next week will feature results from several major household names, including Tesla and Netflix which are among the most closely watched reports. We will also get reports from other big names like Procter & Gamble (P&G), Coca-Cola and aerospace giant RTX and tech veteran IBM.

How has the US Dollar Performed?

The U.S. dollar is finishing the week with losses against major global currencies.

The overall dollar index, which tracks the US currency's value, is on track for a 0.44% weekly slide, its largest drop since late July despite a small gain of 0.26% on Friday.

The dollar weakened against the safe-haven Swiss franc, falling 0.1% to its lowest level since mid-September.

Meanwhile, the euro was set for its best weekly gain against the dollar in nine weeks, even though it dipped slightly by 0.22% on Friday.

Finally, the dollar was flat against the Japanese yen, which is also on track to notch a weekly gain, and the British pound (sterling) was down slightly by 0.2% but still poised for a weekly gain.

This week also saw rate cut expectations rise with market participants now pricing in around 51 bps of rate cuts through December 2025, up from around 44 bps earlier in the week.This is based on the LSEG data.

The Week Ahead

Next week will definitely be a busier one as we did have a bit of a data break this week. Obviously the US Government shutdown has hampered US data releases but there was also a lack of high impact data from around the world. .

The week ahead brings a host of high impact data releases from around the globe including inflation data from the US, China and Canada. While we also have a host of Central Bank policymakers speaking.

Let us take a look at some of the key data releases which could shake markets next week.

Asia Pacific Markets

China is facing a pivotal week that will set its economic direction for the next five years, even as new data is expected to confirm a recent slowdown.

From Monday to Wednesday, the Fourth Plenum meetings will be held, with the main goal of discussing China's important 15th Five-Year Plan for the years 2026 to 2030. Key priorities that are expected to be highlighted include boosting consumer spending, driving technological innovation (especially in areas like AI and semiconductors to achieve self-reliance), and generally shifting toward "high-quality development" to secure long-term growth.

Separately, critical economic data is due on Monday:

Loan Prime Rates: The central bank is expected to keep these key interest rates unchanged.

GDP and Property: Official data is likely to show China's third-quarter economic growth slowed substantially to around 4.5% for the year. Key monthly data on retail sales and factory output are also expected to show a deceleration. Additionally, data on property prices is expected to confirm the market is still weak, as the government has not yet announced any major new stimulus to turn the sector around.

With the Bank of Japan's interest rate decision coming up on October 30th, two key pieces of economic data are highly important this week: trade and inflation figures.

Japan's exports are expected to rebound and grow by 4.0% compared to a year ago, mainly because shipments of goods like cars and chip-making machinery are returning to normal following the recent 15% tariff deal with the US At the same time, imports are likely to decrease slightly by 0.5%, largely because global commodity prices are lower. Analysts expect exports to continue normalizing in the coming months due to the September trade agreement.

The overall inflation rate is expected to rise to 2.9% for September, with core prices likely remaining above 3.0%. The main reason inflation has slowed down recently is due to temporary factors, specifically government subsidies for energy and social welfare programs.

Tariffs, Tariffs and More Tariffs

Due to the ongoing US government shutdown, there is a serious lack of clear information on how the economy is actually performing.

The government's statistical agencies are closed, meaning key reports are delayed, and even when the government reopens, it will take weeks to properly collect and process the missing data.

However, one important piece of information, the September inflation report (CPI) has been confirmed for release. This is not for the Federal Reserve's benefit (even though they need it for their October 29th meeting), but because the number is legally required to calculate the Social Security cost-of-living increase for 2026.

Experts still expect the report to show a small rise in overall prices (0.4% for the month) and a modest increase in core prices (0.3%). Even if tariffs start making inflation more obvious, the Fed's biggest concern right now is the weakening job market, meaning a small rise in inflation will not stop them from making a planned quarter-point interest rate cut later this month.

For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)

Chart of the Week - US Dollar Index

This week's Chart of the week is the US Dollar Index (DXY)

From a technical perspective, the DXY has broken a three-day losing streak finding support at the 100-day MA on Friday.

The daily candle closed as a hammer candle setting up the potential for further upside on Monday.

If this level holds on Monday the DXY could continue its rise in the early part of next week. This will also depend on US-China developments.

CPI data will be due on Friday though and market participants may be slightly hesitant to commit to any major moves ahead of the data release.

This could potentially lead to some choppy price action in the early part of the week, something to consider.

Immediate resistance rests at 99.57 before the psychological 100.00 handle comes into focus.

Looking at support and a break below the 100-day MA could lead to a retest of the 97.70 or 96.90 support levels.

US Dollar Index (DXY) Daily Chart - October 17, 2025

Source:TradingView.Com (click to enlarge)

Canadian Highlights

• Industries that are highly exposed to the U.S. continue to suffer, with manufacturing and wholesale sales volumes down in August.
• Housing market developments were mixed in September, with home sales declining but housing starts improving. However, performances for Q3 overall were as expected.
• Next week’s CPI inflation and BoC surveys loom large for the upcoming Bank of Canada interest rate decision.

U.S. Highlights

• Alternative data helped fill the void of official releases due to the ongoing government shutdown. The Cleveland Fed’s Inflation Nowcasting model estimated core inflation remained around 3% (y/y) in September.
• The Chicago Fed’s Advance Retail Trade Summary indicated retail & food services sales excluding autos were healthy in September.
• Fed Chair Powell signaled that the central bank could soon reach a point where it may stop reducing the size of its balance sheet, also known as quantitative tightening.

Canada – Soft Data, Subdued Economy

If not for equities, one could easily make the case that caution dominated the minds of investors this week. Oil prices continued their slide, with WTI dropping about $2/bbl on concerns of a global supply glut and rising trade tensions between the U.S. and China. This is bad news for Canadian oil exporters, although the upside is that inflation will be pressured lower in October, freeing up Canadians to spend elsewhere. Canadian bond yields were also lower during the week (10-year yield was down about 8 bps as of writing), echoing the trend in their U.S. counterparts and reinforcing the theme of cautiousness. However, stock markets ran somewhat against the grain this week, after a brief trip into the red the week prior. This time, its was mining companies (benefitting from record highs in gold, which itself is a classic sign of cautiousness) that helped the TSX edge higher (as of writing).

This week offered fresh evidence that industries tied to the U.S. continue to suffer. Canadian manufacturing sales volumes fell 1.5% month-on-month (m/m) in August, erasing gains made the prior two months (Chart 1). Sales were driven lower by tumbling shipments of transportation equipment (cars, aerospace products). Manufacturing was also dealt a fresh blow this week as Stellantis announced that it would be shifting production of the Jeep Compass originally planned for their currently idled plant in Brampton Ontario to the U.S. Meanwhile, wholesalers – also highly exposed to the U.S. market – had a rough August, with wholesale sales volumes down 2.7% m/m.

This week also painted a mixed picture of Canada’s housing markets in September. Home sales declined last month, marking the first drop since April, after the market had bounced back from very early 2025 lows. Housing starts, meanwhile, increased 14% m/m in September after August’s large drop. For the third quarter overall, home sales were up 7% while starts dropped 3%. Both results were generally in line with our latest forecast, where rising sales activity would enable residential investment to make a positive contribution to Q3 GDP growth (Chart 2). However, September’s weak sales performance suggests some softening in momentum heading into Q4. Our current view is for a modest, gradual rise in home sales unfolding through next year, although housing starts are expected to trend lower amid slow population growth.

All in, data this week reinforces that Canada’s economy continues to suffer under the weight of the trade war. It’s not all bad news, as last week’s employment report was solid, but the overall picture is one of an economy that is muddling along at a well-below trend pace. For the Bank of Canada, these data probably didn’t move the dial much in terms of their thinking on rates. But, next week’s BoC Business Outlook Survey and CPI inflation report will be the key final pieces of puzzle before the next interest rate decision on October 29th. The Bank of Canada will be looking for confirmation that the inflation backdrop is benign to support a rate cut, while businesses’ outlook in the face of tariffs will play a key role in their thinking on future demand.

U.S. – Reading the Tea Leaves Amidst the Data Fog

This week’s U.S. economic landscape remained shrouded in fog due to the lack of official data amidst the ongoing government shutdown. If it continues until Monday, it will be the third longest in history. In the official data drought, focus has shifted to alternative indicators, particularly from the Federal Reserve, which is still operating during the shutdown. US-China trade tensions ebbed and flowed, while concerns surrounding regional banks made a comeback, weighing on equity markets. Still, equities managed to eke out some gains, with the S&P 500 up 1% from last Friday’s low. Bond yields declined amid uncertainty and expectations of further monetary easing. Notably, the 10-Year Treasury yield fell below 4% and is now hovering near last year’s level.

In the absence of the CPI report, alternative inflation indicators are sending conflicting signals. The Cleveland Fed’s Inflation Nowcasting model estimated core inflation at 0.26% month-over-month in September, suggesting year-on-year core inflation remained near 3%. The lack of acceleration would support another Fed rate cut amidst a deteriorating labor market. However, the Fed’s Beige Book reported further price increases, with several districts noting “faster input cost growth due to higher import prices and rising costs for services like insurance, health care, and technology”. The NFIB’s small business survey also showed moderate upticks in its price metrics (Chart 1). The CPI report is set to be released next week, which should help clear some of the fog.

The September retail sales report is also delayed, but the Chicago Fed’s Advance Retail Trade Summary (CARTS), which tracks weekly sales, offers some insight. CARTS indicates that retail & food services sales excluding autos rose by 0.5% in September, suggesting a solid finish to the third quarter (Chart 2). However, given ongoing uncertainty and other consumer challenges, momentum is expected to ease in the fourth quarter. The Beige Book echoed this, noting that overall consumer spending, especially on retail goods, trended down in recent weeks, with auto sales being the main exception.

On the employment front, the Beige Book described labor demand as “subdued” and employment levels as “largely unchanged”. More employers reported lowering headcount through layoffs and attrition, citing weak demand, high uncertainty, and, in some cases, increased investment in AI. Layoffs were mentioned 14 times, up from 6 previously. NFIB employment metrics also pointed to a weak hiring trend among small businesses in September.

Fed Chair Powell reiterated recent messaging and placed more emphasis on labor market risks in a speech this week, supporting additional easing. Powell also signaled the central bank could soon stop reducing the size of its balance sheet. While he provided no set timeline for the end of quantitative tightening (QT), he stated “we may approach that point in the coming months,” noting early signs that liquidity conditions are gradually tightening.

Reading the tea leaves, labor market risks remain the key focus. As such, the Fed is likely to deliver another rate cut at the end of this month. The signal that QT may soon end further reinforces the Fed’s dovish stance.

Summary

United States: Put on Pause

• As the federal government shutdown approaches its third full week, no end appears to be in sight. While the economic and financial market impact of the shutdown has been muted so far, it is not costless, and there is not much precedent for such a full shutdown lasting longer than a few weeks.
• Next week: Existing Home Sales (Thu.), CPI (Fri.)

International: Soft Signals in a Shifting Landscape

• In a relatively light week for international economic data, UK monthly GDP grew modestly, but last month’s figure was revised into contraction, offsetting recent gains. Wage and labor market data painted a mixed picture of the British economy. Australia’s employment report disappointed, while inflation in India fell below the central bank’s target.
• Next week: China GDP (Mon.), Canada CPI (Tue.), Eurozone PMIs (Fri.)

Topic of the Week: Tensions Rising in U.S.-China Trade Relations

• We unpack the rising tensions brewing in the U.S.-China trade spat this week following export curbs out of China on rare earth minerals and magnets and the U.S. threatening an additional 100% tariff on imports from the country. The 90-day pause on higher reciprocal rates also ends mid-November, though Trump has said these high rates are unsustainable and a fair deal must be met.

Full report here. 

Gold’s rally to record highs above $4,300 per ounce resulted from a debasement trade. Governments cannot cope with budget deficits, are accumulating debt and demanding that central banks cut interest rates, as in the US, or keep them low, as in Japan. As a result, investors are losing confidence in government bonds and currencies. They are looking for alternatives and turning their attention to precious metals.

As a result, gold has been gaining for the last nine weeks, the fifth time in the history of free currency conversion since the 1970s. However, there has never been a 10-week consecutive growth period. The gap from the 200-week moving average also shows the excessiveness of the rally. The spot price at its peak exceeded this line by 90%. There has only been one larger gap once before, in 1980. At the very least, the market needs a technical respite. But historically, its beginning could be the start of a significant multi-year reversal. Now, we are on the side of the bears, but at the same time, we understand that the bulls simply have no choice but to push the price further up, as stopping would ruin the whole game.

Each time, gold finds a new driver of growth. In the summer, there were expectations of a resumption of the Fed’s easing cycle; during September and so far in October, there were political crises in Japan and France, the US shutdown, and the renewed US-China trade war. In November, it will be the turn of the British budget and the court case over Donald Trump’s tariffs. Against this background, Societe Générale’s forecast of precious metal growth to $5,000 per ounce by the end of 2026 seems justified. The company is betting on a consistently high capital inflow into ETFs, a strong appetite for bullion among central banks, and a loosening of the Fed’s monetary policy.

Monday, Oct 20, 2025

Tuesday, Oct 21, 2025

Wednesday, Oct 22, 2025

Thursday, Oct 23, 2025

Friday, Oct 24, 2025

• US CPI and PMI data to test dovish Fed cut bets.
• UK inflation figures may impact chances of another BoE cut in 2025.
• Canadian and Japanese CPI numbers are also due out.
• Eurozone flash PMIs could revive ECB rate cut expectations.

Investors maintain dovish Fed cut bets

The dollar began the week on a strong footing, buoyed initially by US President Trump’s weekend remarks aimed at tempering concerns over a potential escalation in US-China trade tensions. However, the greenback quickly relinquished its gains after Fed Chair Jerome Powell struck a dovish tone, reinforcing investors’ expectations of aggressive rate cuts down the road.

The Fed Chief observed that the labor market remained subdued, adding that the assessment was based on private-sector data in light of the ongoing government shutdown and the resulting lack of official releases. While he suggested that sufficient information may still be available to support an informed policy decision at the upcoming meeting, he cautioned that a prolonged shutdown could further obscure the economic outlook.

His comments allowed market participants to maintain expectations of two additional quarter-point rate cuts this year, while nearly fully factoring in another three in 2026. This stands in sharp contrast to the Fed’s latest dot plot, which indicated only a single cut next year, and underscores the potential for heightened volatility should forthcoming data tilt sentiment in either direction.

In addition to acknowledging labor market weakness, Powell noted that the economy appears to be “on a somewhat firmer trajectory than expected”, implying that they may not proceed as forcefully as markets anticipate, particularly if data continues to indicate economic resilience and the government reopens.

US CPI and PMI data enter the spotlight

With this context in mind, dollar traders may turn their attention to next Friday’s US CPI data for September – set to be released on Friday even if the government shutdown persists – alongside the S&P Global PMIs for October.

According to the ISM PMI reports for September, prices charged in the manufacturing sector continued to decelerate, but the corresponding non-manufacturing subindex saw a modest uptick. Given that non-manufacturing activity represents roughly 90% of US GDP, Friday’s inflation data may exhibit some persistence. Indeed, the Cleveland Fed CPI Nowcast model pointed to a 3% y/y inflation rate, slightly above August’s 2.9%.

Therefore, sticky inflation, coupled with PMIs supporting Powell’s view that the economy continues to fare well, may lead investors to temper their aggressive rate cut bets and scale back anticipated reductions for next year. This could prove positive for the US dollar. The opposite may be true in case inflation decelerates.

Did UK inflation accelerate as the BoE projected?

Pound traders are also facing a busy week, with September’s CPI data slated for release on Wednesday, followed by retail sales for the same month and the preliminary S&P Global PMIs on Friday.

At its latest gathering, the Bank of England maintained its Bank Rate at 4% via a 7-2 vote, with the two dissenters advocating a 25bps reduction. The accompanying statement highlighted that the Bank’s monetary policy stance has become less restrictive and that a gradual and careful approach to further easing remains appropriate. Although officials acknowledged ongoing underlying disinflation, they noted that there was greater progress in easing wage pressures than prices.

Indeed, this week’s employment data revealed that average earnings excluding bonuses continued to ease, though the y/y rate remained elevated at 4.7%. The unemployment rate rose to 4.8% from 4.7%, prompting market participants to assign a nearly 50% chance of another 25bps rate cut by December. Such a policy move is nearly fully priced in for February, while one more same-sized reduction is anticipated by the end of 2026.

What may have also influenced the latest dovish tilt in market expectations were remarks by UK Chancellor Rachel Reeves, who indicated that she is considering tax increases and spending cuts in the autumn budget, scheduled for announcement on November 26.

Tighter fiscal policy creates room for a more accommodative stance, yet the BoE’s next steps will hinge largely on next week’s inflation data. The Bank itself projected that inflation is expected to increase slightly in September from 3.8% y/y in August. Should Wednesday’s CPI report confirm this, investors may scale back their rate cut bets, thereby injecting fuel into the pound’s engines. A set of encouraging retail sales and PMIs may add extra credence to the idea that policymakers should not rush into lowering borrowing costs.

Canada and Japan CPI figures to shape BoC and BoJ expectations

CPI figures will be released from Canada and Japan as well, on Tuesday and Friday, respectively.

Getting the ball rolling with Canada, on September 17, the Bank of Canada lowered interest rates by 25bps – the first reduction since March – citing a weaker economy and a rising unemployment rate. The market was quick to price in at least one additional rate cut for the foreseeable future, assigning a 60% probability to a move on October 29. A slowdown in the CPIs could take that probability higher and perhaps hurt the loonie.

In Japan, the likelihood of a Bank of Japan rate hike at the turn of the year has risen again to 65% amid political deadlock. Fiscal dove Sanae Takaichi, recently elected leader of the Liberal Democratic Party (LDP), has reportedly lost support from Komeito, the coalition partner, adding uncertainty to the policy outlook.

Takaichi’s election initially raised speculation that the BoJ may delay its rate hike process, but the stalemate has led investors to restore their rate hike bets. Combined with the risk-aversion triggered by the renewed trade tensions between the US and China, these factors allowed the yen to recover decent ground. That said, for the Japanese currency to continue its upside trajectory, Friday’s inflation data may have to surprise to the upside, something that could increase the probability of a BoJ rate hike in the coming months even further.

China GDP in focus amid US-China trade frictions

Speaking of China, on Monday, the world’s second largest economy will release GDP data for Q3, alongside industrial production, fixed asset investment, retail sales, and the unemployment rate, all for September.

Consumer prices fell more than expected in September and although producer prices improved, they remained in deflationary territory, highlighting weak domestic demand and trade anxiety. Another set of data suggesting that the economy is struggling could intensify calls for more stimulative measures by Chinese authorities – especially following the latest trade spat with the US – and could thereby weigh on aussie and kiwi, given that China is the main trading partner of both Australia and New Zealand.

Will the EZ PMIs confirm that the ECB is done cutting rates?

In the Eurozone, the preliminary S&P Global PMIs for October may set the tone for the euro, which took a hit lately following the gridlock in French politics. However, in terms of ECB monetary policy, the market is not fully factoring in any additional rate cuts. There is nearly a 70% chance of another 25bps reduction by July 2026, which means that some investors believe the ECB is done with easing policy.

Indeed, several ECB policymakers have emphasized that there is no reason to adjust rates in the coming months. That said, Governing Council member Villeroy said this week that the Bank’s next move is likely to be a cut rather than a hike. Combined with previous remarks by Vice President de Guindos regarding the NEER euro rate, which is hovering at record highs, this suggests that any signs that a strong euro is affecting trade and the broader economy could spark speculation of a contingency cut in the foreseeable future, and thereby take euro/dollar lower. Soft PMIs could trigger the first wave of such concerns.

Earnings season continues with Netflix and Tesla results

Besides the aforementioned macro data, next week’s agenda includes earnings results from Netflix and Tesla.

Netflix will draw particular attention following Elon Mask’s call for his followers to cancel their subscriptions over controversy regarding an animated show and its creator. Nonetheless, the backlash might not be a big headache for the streaming giant, as Mask’s remarks came too late to meaningfully impact subscriber counts. What’s more, the fourth quarter of 2024 marked the last reporting of this metric before the company shifted priority to revenue over user growth.

As for Musk’s own company, the results are likely to center around vehicle deliveries and auto profit margins. The firm has already announced a record 497,099 vehicle deliveries in Q3 2025, which marks a 7% increase from the same quarter last year. Based on that, strong revenue metrics may be reported, likely providing support for the company’s stock price.