Errante’s The Week Ahead: 20^th – 24^th October 2025 

Highlights of the week 

• Macro focus: China Q3 GDP and UK CPI midweek, followed by a data-heavy US Friday with CPI (Sep), PMIs, and housing reports likely to shape the dollar and risk sentiment. 

• Narrative risks: US government shutdown persists, tariff headlines around the Trump–Xi meeting could sway markets, while the dollar remains soft after its worst week since July. 

• Policy & risk tone: Fed communication and haven flows will guide positioning as markets weigh weak US data signals against tariff rhetoric and shutdown uncertainty. 

What Now 

Macro Drivers and Market Narrative 

The week ahead will be shaped by a complex interplay of shutdown-driven data gaps, renewed trade tariff rhetoric, and a weakening dollar trend, all unfolding against the backdrop of record-breaking gold prices and softening US macro momentum. The US federal shutdown, now in its second week, has disrupted the regular release of key economic indicators, pushing markets to rely on Fed district Beige Book anecdotes that point to rising layoffs, weaker consumer spending, and regional banking stress. This information vacuum magnifies the impact of Friday’s CPI and PMIs, which will serve as crucial forward-looking signals for the USD trajectory, Fed rate expectations, and global risk sentiment. 

Dollar Weakness and Disinflation Trend 

The dollar has just recorded its sharpest weekly fall since July, with investors rotating into the Swiss franc and yen amid risk aversion tied to trade and banking concerns. This comes as US inflation dynamics are showing a clear disinflation trend, though at a slower pace than earlier in the year. Core CPI has averaged 0.2–0.3% MoM over the last four months, down from the 0.4–0.5% prints that dominated the first half of 2025, reflecting easing shelter costs and softening core goods. Supercore inflation (services ex-housing) remains sticky but is no longer accelerating. Fed officials have stressed they are ready to ease further if this trend persists. A weak CPI/PMI mix would confirm the disinflation trajectory, reinforcing the bearish dollar tone, whereas an upside CPI surprise could trigger a short-covering rally, pushing front-end yields higher and challenging the dovish pricing currently in rates markets. 

Tariff dynamics remain a key swing factor  

While Trump’s confirmation that the Xi meeting is still on offered temporary relief, the underlying tariff agenda has far-reaching consequences. Tariff hikes or threats can influence global supply chains, trade balances, and inflation expectations, thereby altering capital flows and currency dynamics. A constructive tone—signs of de-escalation or delays in new tariffs—would likely bolster risk sentiment, support equities and EM FX, and weigh on USD as investors rotate into higher beta assets. Conversely, renewed escalation, such as tariff hikes on Chinese goods or retaliatory measures, could trigger a flight to safety, boosting the dollar, yen, and Swiss franc, while also propelling gold higher as a debasement hedge. Historically, major tariff shocks have led to volatility spikes and broad USD strength on risk aversion, followed by gold outperformance as investors price in slower global growth and potential policy easing. This dual impact—short-term dollar strength and medium-term gold resilience—makes tariff policy a pivotal driver for both FX and commodities markets in the weeks ahead. 

Gold’s surge above $4,380 high hits new record high 

Gold underscores structural demand for debasement hedges as real yields compress, while UK CPI midweek will shape BoE expectations in a context of shifting communication strategies. Eurozone flows will largely follow USD direction given limited regional data. For equities, the AI-led rally faces a test: soft inflation and stable PMIs would bolster growth and duration plays, while upside surprises could reawaken rate volatility and challenge stretched valuations. 

That said, it should be considered as the debt crisis in the major economies including the United States and China escalates, things may turn out differently for the dollar this time. 

Cross-asset notes to watch 

• Dollar & havens: USD softness has coincided with CHF/JPY outperformance and gold’s surge; tariffs and shutdown uncertainty keep this risk-hedge bias alive. 

• Equities: US futures stabilized after Trump–Xi meeting “still on” headlines; keep an eye on Friday’s CPI/PMIs for a rates-led volatility impulse. 

• Macro color: Fed districts highlight more layoffs and muted wage growth—a backdrop that amplifies the market’s sensitivity to any downside in Friday’s CPI. 

Market Events and Announcements (GMT+3) 

Monday, 20^th October 2025 

• 05:00 – CNY – GDP (YoY) (Q3): First read on China’s growth pulse; sets early tone for commodities and beta-FX. 

Tuesday, 21^st October 2025 

• No high-impact event. 

Wednesday, 22^nd October 2025 

• 09:00 – GBP – CPI (YoY) (Sep): Key input for BoE path; watch services inflation stickiness. 

• 17:30 – USD – Crude Oil Inventories: Near-term supply/demand signal as OPEC+ policy and demand concerns tug prices. 

Thursday, 23^rd October 2025 

• 15:30 – USD – Initial Jobless Claims: Cleanest real-time US labor read during shutdown uncertainty. 

• 17:00 – USD – Existing Home Sales (Sep): Housing sensitivity to mortgage rates and incomes. 

Friday, 24^th October 24 2025 

• 15:30 – USD – Core CPI (MoM) (Sep): Fed-critical gauge; dovish if 0.3% or lower on broad moderation. 

• 15:30 – USD – CPI (MoM)/(YoY) (Sep): Headline will shape front-end yields and USD reaction. 

• 16:45 – USD – S&P Global Manufacturing PMI (Oct): Early Q4 growth proxy; watch new orders/prices. 

• 16:45 – USD – S&P Global Services PMI (Oct): The pivotal activity gauge for US growth momentum. 

• 17:00 – USD – New Home Sales (Sep): Confirms or contradicts Existing Home Sales signal. 

Market Insights: Key Charts to Watch 

UK100 (FTSE 100) – Daily 

Structure & momentum:  

Pullback from the early-October peak near 9,492 into the rising trend line; price now ~9,340. The 61.8% retracement at 9,412 is overhead resistance; 9,362 is the local pivot (on the plotted swing). MACD has crossed down with negative histogram, confirming a momentum cooling; MFI rolled off the high-60s toward mid-50s, showing ebbing inflows. 

Main scenario (base case):  

While the rising 50–60D envelope holds, we favor buying dips into 9,300–9,360 for a retest of 9,412, then 9,492. A daily close above 9,412 unlocks 9,580/9,600 (upper band glide path). 

Key levels: 

• Support: 9,362 (pivot), 9,283 (161.8%), 9,233 (200%), 9,180 (241.4%). 

• Resistance: 9,412 (61.8%), 9,492 (swing high). 

Alternative scenario:  

A risk-off turn (hot US CPI/tariff shock) closes below the trend line and 9,300; then 9,283, 9,233, 9,180 comes into view before higher-timeframe buyers re-engage. 

BTCUSD – Daily 

Structure & momentum:  

Sharp reversal from the 126,193 high; price ~105,800 now sits below 108,617 (last swing low) and beneath the 61.8% resistance at 115,331. MACD is negative and widening; MFI ~18 signals oversold but capitulation-type flows; ATR is elevated and volume spiked, which is classic distribution to liquidity vacuum. 

Main scenario (base case):  

With structure below 108,617, bias stays lower toward the extension ladder: 103,836 (127.2%), 101,341 (141.4%), 97,755 (161.8%). Expect bounces to struggle inside 110,000–115,000 unless macro risk eases meaningfully. 

Key levels: 

• Resistance: 108,617, 115,331; then 120,000 (mid-band zone). 

• Support: 103,836, 101,341, 97,755; stretch 91,041 (200%). 

Alternative scenario:  

A swift risk revival (de-escalating tariffs, soft US CPI, bank-stress ebbing) plus dip-buying drives a daily close back above 108,617; that would open 115,331, and only a close >115,331 neutralizes the down-swing and re-targets 120k–126k. 

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