We’re heading into a huge week for global markets — one that combines major central bank decisions with a crucial geopolitical meeting between President Trump and President Xi. With both the Federal Reserve and the Bank of Canada expected to cut interest rates, and the U.S.–China trade negotiations back in focus, volatility is all but guaranteed.
Over the weekend, the U.S. administration announced that Washington and Beijing have agreed on a preliminary framework for a trade deal ahead of the leaders’ meeting later this week. While that has injected some optimism into global markets, it’s important to remember that this remains just a framework, not a final agreement. The meeting, scheduled for October 30th, will ultimately determine whether this fragile optimism holds or fades – and until then, we can expect currency, equity, and commodity markets to remain extremely sensitive to headlines.
The U.S. government shutdown also continues, meaning several economic reports are still delayed — another factor distorting the usual flow of market information and increasing the potential for sharp intraday moves.
This Week’s Key Events
Monday:
We start the week quietly with Germany’s IFO business climate surveys, expected to show a slight improvement in sentiment – a small positive for the Euro if confirmed. The U.S. releases Durable Goods Orders, forecast at 0.2%, which could offer clues about the health of U.S. manufacturing amid ongoing uncertainty.
Wednesday:
The midweek spotlight will be firmly on central banks. Both the Bank of Canada (BoC) and the Federal Reserve (Fed) are expected to deliver 25 basis-point rate cuts. These moves are largely priced in, but as always, the forward guidance will matter most.
Markets will be listening closely for any hints from Fed Chair Jerome Powell about how many more cuts may follow before year-end. With the U.S. economy showing signs of cooling — and the government still shut down – traders will be watching for signs of a pivot toward a more dovish stance. Similarly, the BoC’s tone will be key, as the Canadian economy grapples with slowing growth and weaker consumer demand.
Thursday:
Thursday brings a cluster of major releases – and potentially, the most volatile day of the week. The Bank of Japan (BoJ) and the European Central Bank (ECB) are both expected to hold rates steady, but attention will be on their accompanying statements, particularly as Japan battles deflationary pressures and the Eurozone continues to flirt with stagnation.
We’ll also get GDP data from both the Eurozone and the United States. The U.S. figure is forecast to show a sharp slowdown compared to previous quarters – a data point that could weigh on the Dollar, especially if accompanied by dovish rhetoric from the Fed.
And of course, Thursday is when Trump and Xi meet face-to-face. The market reaction will depend entirely on tone and substance – if they signal real progress, we could see a surge in global equities, stronger commodity currencies, and renewed weakness in the Dollar. If talks stall, however, expect a swift flight to safety and Dollar strength.
Friday:
The week ends with Eurozone flash CPI, expected at 2.1%, edging closer to the ECB’s inflation target – a modestly positive signal for Europe’s recovery narrative. Meanwhile, Canada’s GDP is forecast to flatline at 0.0%, which could pressure the CAD, particularly if the BoC delivers a dovish cut earlier in the week.
The Bigger Picture
With six major central banks meeting this month, a high-stakes Trump–Xi summit, and the ongoing U.S. government shutdown, markets remain caught between optimism and uncertainty. For now, risk appetite looks constructive following the weekend’s trade headlines – but that optimism is fragile.
GBP/EUR 1.1450 GBP/USD 1.3331 GBP/AED 4.8977
GBP/AUD 2.0332 GBP/CHF 1.0611 GBP/CAD 1.8632
GBP/NZD 2.3136 EUR/USD 1.1628 GBP/ZAR 22.9657