Weekly Market Pulse - Week ending October 31, 2025
Market developments
Equities: Global equities advanced, the S&P 500 gained 0.7%, while the Nasdaq rose 2.2% and the S&P/TSX dropped 0.3%. Sentiment was buoyant as investors welcomed easier monetary policy and solid Q3 earnings, particularly in technology and consumer sectors.
Fixed Income: Bond markets reflected the Fed’s 25 bps rate cut to 4.00% and a similar move by the Bank of Canada, which lowered its policy rate to 2.25%. U.S. Treasury yields were little changed, with the 10-year at 4.08% and the 2-year at 3.58%. In Canada, yields moved modestly, with the 2-year at 2.41% and the 10-year at 3.12%, as investors priced in continued policy support.
Commodities: Commodity markets were softer overall. WTI crude fell 1.2%, pressured by concerns over global demand and steady supply conditions. Gold declined 2.8% to $4,000, as risk-on sentiment and a stronger dollar reduced safe-haven appeal. The tone across commodities was defensive, with energy and metals both under modest pressure.
Performance (price return)
SECURITY |
PRICE |
WEEK |
1 MONTH |
3 MONTH |
YTD |
Equities ($Local) |
|
|
|
|
|
S&P/TSX Composite |
30,260.74 |
-0.30% |
0.51% |
11.01% |
22.37% |
S&P 500 |
6,840.20 |
0.71% |
1.92% |
7.90% |
16.30% |
NASDAQ |
23,724.96 |
2.24% |
4.26% |
12.32% |
22.86% |
DAX |
23,958.30 |
-1.16% |
-0.64% |
-0.45% |
20.34% |
NIKKEI 225 |
52,411.34 |
6.31% |
17.64% |
27.62% |
31.37% |
Shanghai Composite |
3,954.79 |
0.11% |
1.85% |
10.68% |
17.99% |
Fixed Income (Performance in %) |
|
|
|
|
|
Canada Aggregate Bond |
243.31 |
-0.08% |
0.81% |
2.92% |
3.37% |
US Aggregate Bond |
2339.54 |
-0.49% |
0.45% |
3.02% |
6.88% |
Europe Aggregate Bond |
248.21 |
0.12% |
0.77% |
0.97% |
1.83% |
US High Yield Bond |
28.83 |
-0.02% |
0.14% |
2.30% |
7.45% |
Commodities ($USD) |
|
|
|
|
|
Oil |
60.78 |
-1.17% |
-1.62% |
-12.24% |
-15.25% |
Gold |
3999.77 |
-2.75% |
3.47% |
21.58% |
52.40% |
Copper |
511.20 |
-0.20% |
4.70% |
17.40% |
26.96% |
Currencies ($USD) |
|
|
|
|
|
US Dollar Index |
99.78 |
0.84% |
2.13% |
-0.18% |
-8.02% |
Loonie |
1.4014 |
-0.13% |
-0.56% |
-1.13% |
2.64% |
Euro |
0.8671 |
-0.82% |
-1.70% |
1.03% |
11.39% |
Yen |
154.06 |
-0.78% |
-4.54% |
-2.15% |
2.04% |
Source: Bloomberg, as of October 31, 2025
Central Bank Interest Rates
Central Bank |
Current Rate |
March 2026 |
Bank of Canada |
2.25% |
2.16% |
U.S. Federal Reserve |
4.00% |
3.54% |
European Central Bank |
2.00% |
1.85% |
Bank of England |
4.00% |
3.59% |
Bank of Japan |
0.50% |
0.71% |
Source: Bloomberg, as of October 31, 2025
*Expected rates are based on bond futures pricing
Macro developments
Canada – BoC cuts rates again, GDP shows marginal rebound
On October 30, the Bank of Canada reduced its overnight rate by 25 basis points to 2.25%, marking a second consecutive cut. Policymakers indicated that further easing is unlikely if current economic projections hold, citing persistent uncertainty from trade tensions and structural damage to capacity. Inflation remains near the 2% target, while core measures hover around 3%, but the Governing Council expects gradual convergence toward target.
Flash estimates show Canadian GDP rose 0.1% in September, trimming the 0.3% drop in August, the steepest monthly contraction since late 2022. Goods-producing sectors fell 0.6%, led by a 2.3% slump in utilities and weaker mining output amid lower global commodity prices. Services edged down 0.1%, as transportation and wholesale trade declines offset retail gains. Year-over-year growth stood at 0.7%, underscoring ongoing headwinds from trade frictions and elevated borrowing costs.
U.S. – Fed cuts rates, signals caution ahead
The Federal Reserve lowered the federal funds rate by 25 basis points to 3.75%–4.00% in its October meeting, aligning with expectations. While most officials supported the move, dissent emerged over the pace of easing, with one member favoring a larger cut and another advocating no change. Chair Powell emphasized that a December cut is not guaranteed, despite market pricing for another 25bps reduction. The Fed also announced plans to end balance sheet runoff on December 1, reflecting a shift toward stabilizing liquidity amid rising labour market risks and still-elevated inflation.
International – ECB holds steady, Eurozone growth surprises
The European Central Bank left its key rates unchanged for a third straight meeting, with the main refinancing rate at 2.15% and deposit rate at 2.00%. Officials cited resilient economic conditions and inflation trending near the 2% target. While prior easing continues to support activity, risks from global trade disputes and geopolitical tensions persist. The Governing Council reiterated its meeting-by-meeting approach, signaling flexibility amid an uncertain outlook.
Preliminary data show Eurozone GDP grew 0.2% in Q3, up from 0.1% in Q2 and slightly above consensus. France outperformed with 0.5% growth on strong exports, while Spain expanded 0.6% on robust consumption and investment. Germany and Italy stagnated, weighed by weak industry and trade. Annual growth reached 1.3%, easing pressure on the ECB for near-term cuts. Meanwhile, October CPI slowed to 2.1% from 2.2%, with energy prices falling and food inflation moderating. Core inflation held at 2.4%, suggesting underlying price pressures remain sticky despite headline improvement.
Quick look ahead
DATE |
COUNTRY / REGION |
EVENT |
|
SURVEY |
PRIOR |
03-Nov-25 |
Canada |
S&P Global Canada Manufacturing PMI |
Oct |
|
47.7 |
03-Nov-25 |
United States |
ISM Manufacturing |
Oct |
49.4 |
49.1 |
04-Nov-25 |
United States |
JOLTS Job Openings |
Sep |
7,180.0 |
7,227.0 |
05-Nov-25 |
Eurozone Aggregate |
PPI MoM |
Sep |
(0.1) |
(0.3) |
05-Nov-25 |
Eurozone Aggregate |
PPI YoY |
Sep |
(0.2) |
(0.6) |
06-Nov-25 |
Eurozone Aggregate |
Retail Sales MoM |
Sep |
0.15 |
0.1 |
06-Nov-25 |
Eurozone Aggregate |
Retail Sales YoY |
Sep |
1 |
1 |
06-Nov-25 |
United Kingdom |
Bank of England Bank Rate |
|
4 |
4 |
07-Nov-25 |
United States |
Change in Nonfarm Payrolls |
Oct |
|
|
07-Nov-25 |
United States |
Unemployment Rate |
Oct |
|
|
07-Nov-25 |
Canada |
Net Change in Employment |
Oct |
-2.5 |
60.4 |
07-Nov-25 |
Canada |
Unemployment Rate |
Oct |
7.15 |
7.1 |
08-Nov-25 |
China |
PPI YoY |
Oct |
|
-2.3 |
08-Nov-25 |
China |
CPI YoY |
Oct |
|
-0.3 |
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.