Weekly Market Pulse - Week ending October 17, 2025

Market developments

Equities: Global equities experienced a volatile week, initially hitting fresh records due to AI-fueled optimism and dovish signals from the Federal Reserve. However, rising U.S. and China trade tensions, culminating in President Trump announcing a potential 100% tariffs on Chinese imports, triggered a sharp reversal. Later in the week, U.S. equities fell due to regional bank stress, while European stocks rose thanks to staples and earnings reports.

Fixed Income: U.S. Treasury yields remained range-bound, supported by safe-haven flows after the tariff shock. In Europe, the France-Germany yield spread remained wide, reflecting political risk. Later in the week, U.S. Treasuries rallied on weak risk sentiment, sending yields to new three-year lows for the 2-year Treasury yields.

Commodities: Precious metals, particularly gold and silver, saw a surge amid strong haven demand and a historic short squeeze, with gold exceeding $4,000 USD per ounce, while oil prices closed the week down over 2%.

Performance (price return)

SECURITY	PRICE	WEEK	1 MONTH	3 MONTH	YTD
Equities ($Local)
S&P/TSX Composite	30,108.48	0.86%	2.68%	9.94%	21.76%
S&P 500	6,664.01	1.70%	0.96%	5.82%	13.30%
NASDAQ	22,679.97	2.14%	1.88%	8.59%	17.45%
DAX	23,830.99	-1.69%	2.02%	-2.22%	19.70%
NIKKEI 225	47,582.15	-1.05%	6.23%	19.25%	19.27%
Shanghai Composite	3,839.76	-1.47%	-0.94%	9.18%	14.56%
Fixed Income (Performance in %)
Canada Aggregate Bond	243.25	0.69%	0.77%	3.92%	3.35%
US Aggregate Bond	2349.80	0.56%	0.80%	4.18%	7.34%
Europe Aggregate Bond	248.50	0.46%	0.81%	1.22%	1.94%
US High Yield Bond	28.75	0.56%	-0.02%	2.45%	7.15%
Commodities ($USD)
Oil	57.66	-2.11%	-9.98%	-14.63%	-19.60%
Gold	4234.29	5.39%	15.69%	26.81%	61.34%
Copper	499.25	2.01%	9.22%	-9.00%	23.99%
Currencies ($USD)
US Dollar Index	98.42	-0.56%	1.60%	-0.31%	-9.28%
Loonie	1.4014	-0.06%	-1.71%	-1.86%	2.64%
Euro	0.8572	0.40%	-1.25%	0.61%	12.68%
Yen	150.54	0.43%	-2.36%	-1.30%	4.42%

Source: Bloomberg, as of October 17, 2025

Central Bank Interest Rates

Central Bank	Current Rate	December 2025 Expected Rate*
Bank of Canada	2.50%	2.27%
U.S. Federal Reserve	4.25%	3.59%
European Central Bank	2.00%	1.89%
Bank of England	4.00%	3.87%
Bank of Japan	0.50%	0.65%

Source: Bloomberg, as of October 17, 2025

*Expected rates are based on bond futures pricing

Macro developments

Canada – No Releases

No notable releases this week.

U.S. – No Releases

No notable releases due to government shutdown.

International – U.K. Unemployment Rate Surges, Euro Area Inflation Exceeds Expectations, China’s Consumer Prices Decline, Producer Prices in China Continue to Fall

The U.K.'s unemployment rate rose to 4.8% in August 2025, surpassing expectations of 4.7%. This is the highest rate since June 2021, driven by increases in long-term unemployment. While 91,000 more people found jobs, mainly in part-time roles and among those aged 65 and over, the overall economic inactivity rate remained steady at 21.0%.

Euro area consumer price inflation reached 2.2% year-on-year in September 2025, slightly above the ECB’s target. Services inflation increased to 3.2%, while energy costs saw a smaller decline than previously. Food, alcohol and tobacco prices rose more slowly and core inflation rose to 2.4%, indicating persistent price pressures in the economy.

China’s consumer prices fell 0.3% year-on-year in September 2025, exceeding market expectations. Food prices dropped significantly, driven by oversupply, especially in pork. However, non-food inflation increased, aided by consumer incentives. Core inflation reached 1.0%, the highest in 19 months..

China’s producer prices decreased 2.3% year-on-year in September 2025, marking the smallest decline since February. This aligns with efforts to manage excess capacity ahead of the Golden Week holidays. While production material costs fell at a slower rate, consumer goods prices remained weak and the PPI showed no monthly change.

Quick look ahead

DATE	COUNTRY / REGION	EVENT		SURVEY	PRIOR
19-Oct-25	China	1-Year Loan Prime Rate		3.0	3.0
19-Oct-25	China	5-Year Loan Prime Rate		3.5	3.5
19-Oct-25	China	GDP YoY	3Q	4.7	5.2
19-Oct-25	China	GDP YTD YoY	3Q	5.1	5.3
19-Oct-25	China	GDP SA QoQ	3Q	0.8	1.1
19-Oct-25	China	Retail Sales YoY	Sep	3.0	3.4
19-Oct-25	China	Retail Sales YTD YoY	Sep	4.4	4.6
21-Oct-25	Canada	CPI NSA MoM	Sep	(0.1)	(0.1)
21-Oct-25	Canada	CPI YoY	Sep	2.2	1.9
22-Oct-25	United Kingdom	CPI MoM	Sep	0.2	0.3
22-Oct-25	United Kingdom	CPI YoY	Sep	4.0	3.8
22-Oct-25	United Kingdom	CPI Core YoY	Sep	3.7	3.6
23-Oct-25	Canada	Retail Sales MoM	Aug	1.0	(0.8)
23-Oct-25	Canada	Retail Sales Ex Auto MoM	Aug	1.5	(1.2)
23-Oct-25	Japan	Natl CPI YoY	Sep	2.9	2.7
23-Oct-25	Japan	Natl CPI Ex Fresh Food YoY	Sep	2.9	2.7
23-Oct-25	Japan	S&P Global Japan PMI Composite	Oct P		51.3
23-Oct-25	Japan	S&P Global Japan PMI Mfg	Oct P		48.5
23-Oct-25	Japan	S&P Global Japan PMI Services	Oct P		53.3
24-Oct-25	United Kingdom	Retail Sales Inc Auto Fuel MoM	Sep	(0.2)	0.5
24-Oct-25	United Kingdom	Retail Sales Inc Auto Fuel YoY	Sep	0.6	0.7
24-Oct-25	United Kingdom	Retail Sales Ex Auto Fuel MoM	Sep	(0.7)	0.8
24-Oct-25	United Kingdom	Retail Sales Ex Auto Fuel YoY	Sep	0.7	1.2
24-Oct-25	Eurozone Aggregate	HCOB Eurozone Manufacturing PMI	Oct P	49.9	49.8
24-Oct-25	Eurozone Aggregate	HCOB Eurozone Services PMI	Oct P	51.3	51.3
24-Oct-25	Eurozone Aggregate	HCOB Eurozone Composite PMI	Oct P	51.0	51.2
24-Oct-25	United Kingdom	S&P Global UK Services PMI	Oct P	51.4	50.8
24-Oct-25	United Kingdom	S&P Global UK Manufacturing PMI	Oct P	46.8	46.2
24-Oct-25	United Kingdom	S&P Global UK Composite PMI	Oct P	50.7	50.1
24-Oct-25	United States	CPI MoM	Sep	0.4	0.4
24-Oct-25	United States	Core CPI MoM	Sep	0.3	0.3
24-Oct-25	United States	CPI YoY	Sep	3.1	2.9
24-Oct-25	United States	Core CPI YoY	Sep	3.1	3.1
24-Oct-25	United States	CPI Index NSA	Sep	325.0	324.0
24-Oct-25	United States	Core CPI Index SA	Sep	330.7	329.8
24-Oct-25	United States	S&P Global US Manufacturing PMI	Oct P	51.8	52.0
24-Oct-25	United States	S&P Global US Services PMI	Oct P	53.5	54.2
24-Oct-25	United States	S&P Global US Composite PMI	Oct P		53.9

P = Preliminary

The Asset Allocation Team at NEI Investments

Judith Chan, CFA – Vice President, Head of Asset Allocation

Mateo Marks, CFA – Director, Asset Allocation

Adam Ludwick, CFA – Director, Asset Allocation

Anthony Rago, B.A.Sc. – Senior Asset Allocation Analyst

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This material is for informational and educational purposes and it is not intended to provide specific advice including, without limitation, investment, financial, tax or similar matters. This document is published by AFI and unless indicated otherwise, all views expressed in this document are those of AFI. The views expressed herein are subject to change without notice as markets change over time.