Market Commentary: Wednesday 15th October

Stocks rallied while the dollar weakened as optimism over a potential Fed rate cut lifted sentiment and offset renewed U.S.-China tensions. Asian shares jumped 1.9% — their biggest gain in over two months — after Powell highlighted labour market weakness, reinforcing expectations for October easing. The dollar fell for a second day, Asian currencies gained, and two-year Treasury yields held near multi-year lows. Gold hit new highs. Nasdaq futures rose 0.5%, S&P 500 gained 0.4%, and European futures climbed 1.3%.

Powell signalled another 25 bps cut this month, with markets pricing around 1.25 pps of easing through 2026. He also noted the Fed may stop shrinking its balance sheet in the coming months, while Boston Fed’s Collins backed further support for a rate cut. Trade tensions linger as both Washington and Beijing harden their tone on technology and export controls.

In the Middle East, the Red Cross said it received four more coffins believed to contain the remains of Israeli hostages, as Israel warned it would cut humanitarian aid into Gaza, citing delays in body returns.

Data-wise, we have French CPI shortly, followed by U.S. mortgage applications and Empire Manufacturing later today.

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