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Tariffs Rattle, Gold Soars, Markets Adjust

  • Writer: Ahmad Mortazavi
    Ahmad Mortazavi
  • Oct 11, 2025
  • 4 min read
Retail investors are panicked by the sharp decline in the US stock market

🌍Big Picture


Global markets swung sharply this week as politics disrupted a calm post-Fed environment. Fresh tariff threats from former U.S. President Donald Trump against Chinese and European imports ended the equity rally that had driven U.S. benchmarks to record highs just days earlier.


Investors fled to safety: gold broke above $4,000 per ounce for the first time in history, and U.S. Treasury yields fell as traders priced in more policy easing. The U.S. 10-year yield slid to around 4.06 %, its lowest in a month.


Oil prices collapsed, with Brent settling near $60 per barrel after progress toward a Middle East cease-fire eased supply risks. Bitcoin held near $114,000, continuing to outperform most traditional assets as investors diversified into digital alternatives.


In Europe, weak auto data and cautious ECB language kept equities subdued, while in Asia, Japan’s Nikkei 225 jumped 4.7 %, its best week of the year, on new stimulus hopes. China’s markets remained quiet, with investors waiting for the next round of economic measures.


The week’s message: policy easing meets political noise. The Fed’s rate cut continues to anchor liquidity, but global markets are now trading headlines, not fundamentals. As inflation eases and oil retreats, emerging-market currencies like the Indian rupee stand to benefit from lower import costs and a softening U.S. dollar.

📊 Assets at a Glance


Equities


  • U.S.: The S&P 500 fell 2.7 %, the Dow 2.3 %, and the Nasdaq 3 %, as new tariff threats triggered profit-taking after record highs. Tech and industrial exporters led losses; utilities and healthcare gained modestly.


  • Europe: The STOXX 600 ended flat, with auto and energy sectors under pressure while financials stabilised on slightly steeper yield curves.


  • Japan: Nikkei 225 +4.7 %—the best weekly gain since early 2024—on stimulus and yen weakness.


  • China: Mixed; policy expectations offset property-sector worries.


  • India: Slight pullback after prior record highs, but sentiment supported by falling oil and steady monetary policy.


  • Latin America: Brazil firmed on commodity resilience; Mexico softened after the peso rally paused.


Rates & Curves


  • U.S. Treasuries: The 10-year yield dropped to 4.06 %, while the 2-year eased to 4.40 %, marginally steepening the curve.


  • Germany (Bund): 10-year at 2.65 %; ECB’s “hold” stance keeps range trading intact.


  • U.K. (Gilt): 10-year around 4.55 %, aided by BoE’s slower QT pace.


  • Japan (JGB): 10-year steady near 1.6 %, a multi-year high, as normalisation remains gradual.


FX


  • Dollar Index (DXY): Weakened to 98.8, its worst week since July, as U.S. yields fell and safe-haven flows went to gold instead.


  • EUR/USD: ~1.174; GBP/USD: ~1.35; USD/JPY: ~149; USD/CHF: ~0.795.


  • INR: Steady in a 88.7–89.0 range, backed by RBI defence and lower oil prices.


  • MXN: Holding firm near 18.1 per USD; strong carry remains a draw.


  • BRL: Slightly stronger on commodity tailwinds.


Commodities


  • Gold: Exploded to $4,000/oz for the first time ever, closing near $3,985–3,995, lifted by falling real yields, dollar weakness, and central-bank buying.


  • Oil: Brent $60.2, WTI $57.1, both down over 8 % on the week after cease-fire progress reduced supply fears. Lower prices ease inflation pressures globally.


  • Copper: Stable near $9,350/t, awaiting China’s post-holiday demand data.


  • Silver: Firm near $49/oz, echoing gold’s strength.


Crypto


  • Bitcoin: Consolidated around $114,000 (+2 % w/w);


  • Ethereum: ~$6,200 (+1 % w/w). Institutional inflows into spot ETFs and portfolio diversification supported crypto resilience despite weaker equities. Correlation with risk assets has declined—Bitcoin is increasingly trading as a liquidity cycle proxy.



📅 Key Events Next Week


Mon 13 Oct

India CPI (Sept):

  • Cooler inflation (≤4.5%): INR steadies/strengthens; India rates drift lower; EM risk gets a lift.

  • Hotter (>5%): INR wobbles; rate-cut hopes fade; local bonds underperform.

China Trade (Sept):

  • Export rebound: Asia FX firmer; copper/oil catch a bid.

  • Miss: Growth worries; USD firmer; defensives favoured.

OPEC Monthly Report:

  • Balanced tone: Oil steady mid-$60s.

  • Supply tilt: Oil capped; importers (INR) benefit.

Tue 14 Oct

Germany ZEW / Euro data flow:

  • Improving expectations: EUR edges up; EU cyclicals perk up.

  • Softer tone: Bunds bid; defensives lead.

Wed 15 Oct

FOMC Minutes (already released Oct 8) market digests details:

  • Dovish read-through: Carry/EM FX supported; USD softer; gold firm.

  • Hawkish read-through: USD bounce; EM FX pause.

Thu 16 Oct

U.S. Retail Sales (Sept):

  • Soft print: Cut path intact; USD softer; duration bid; gold higher.

  • Strong print: USD pops; front-end reprices; cyclicals catch a bid.

Fri 17 Oct

  • Data blackout note (shutdown): Most U.S. releases remain delayed. CPI for September is rescheduled to Oct 24. Markets may trade headlines and high-frequency proxies in the meantime.

Sat 18 Oct

  • Weekend watch: Any OPEC+/geopolitics or China weekend prints can set Monday’s tone (EM FX and energy most sensitive).


💡 Investment Idea: Sell USD/INR


Why now:

  • Supportive macro: Softer oil and a softer dollar reduce India’s import bill and currency pressure.

  • Policy credibility: The RBI has been defending the ₹88.8–89.0 zone, leaning against sharp rupee weakness.

  • Event tailwinds: India’s inflation print (Mon) can validate a steady policy path; U.S. data delays keep the dollar on the back foot.

How to express the view:

  • Entry (sell USD/INR): 88.6–88.8

  • Targets: 88.0 (T1) and 87.7 (T2)

  • Stop: 89.15 (above RBI defence)

  • Horizon: 2–4 weeks; reassess after India CPI and U.S. Retail Sales.

Risks: Surprise USD strength, hot India CPI, or risk-off shocks. Keep sizing modest and avoid leverage spikes around data.


Risk Disclaimer


The information provided in this analysis is for informational purposes only and should not be considered financial advice. Financial markets involve substantial risk, and investments can fluctuate in value, leading to potential losses. Past performance is not indicative of future results. Before making any investment decisions, readers should consider their own risk tolerance and financial situation. The strategies and opinions expressed are based on current market conditions and may change without notice.


 
 
 

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