🇬🇧 United Kingdom
It was a slightly tense week for the UK economy. The services sector – usually the country’s growth engine – hit a five-month low, with businesses flagging softer demand and heightened fiscal uncertainty.
The Bank of England’s recent rate cut is still rippling through the markets. With inflation moving in the right direction, there’s growing confidence we’ll see at least one more cut before the end of the year. Gilts edged higher, and the pound softened slightly.
On the political front, all eyes are on the Chancellor ahead of the Autumn Statement (pushed back to November!), where clarity is badly needed around spending plans and tax policy.
🇺🇸 United States
The big story in the US was, of course, the government shutdown, which officially kicked in midweek after lawmakers failed to pass a funding bill. That meant no jobs report on Friday, and a lot of guesswork for markets used to data-driven positioning. Non-Farms were rumoured to be low, signalling a cooling of the US economy.
But despite the political theatre, equities held up remarkably well. Investors are holding firm to the belief that the Fed has finished hiking – and may even start cutting in December. Bond yields fell on safe-haven flows, and the S&P 500 ticked higher for most of the week.
In foreign policy, there was a glimmer of optimism: reports emerged of a potential peace framework between Israel and Hamas, brokered quietly by the US, Egypt and Qatar. The plan to set up a “board of Peace” headed by Trump with Tony Blair involved as well. At present it has been accepted by Israel with Hamas reviewing the terms. The news alone was enough to spark hope of a stabilising Middle East and perhaps, longer-term, fewer shocks to global energy markets.
Trade-wise, tariffs were still in the background, but for once, not front and centre. For now, all eyes are on Washington – for both budget fixes and foreign diplomacy.
🇪🇺 European Union
It was a fairly steady week for European markets. Gains in luxury and healthcare stocks helped keep the major indices afloat, even as banks and energy names came under pressure.
The US shutdown was closely watched from Brussels and Berlin, with concerns that a prolonged deadlock could impact transatlantic confidence and investment sentiment. Still, the mood wasn’t panicked – more of a cautious holding pattern.
Inflation data out of the eurozone was a mixed bag. Some member states came in slightly above target, prompting new questions about the ECB’s timing on rate cuts. Christine Lagarde remains dovish, but inflation is clearly not tamed across the board just yet.
🇨🇳 China
It was all quiet on the Chinese front this week due to the National Day holiday, which saw mainland markets closed for most of the week.
But under the surface, there are still plenty of concerns brewing. Global investors are waiting to see how Chinese exports and industrial activity hold up in October, especially as the US slowdown and geopolitical risks mount.
The property market remains fragile, though with no fresh defaults or rescues this week, attention shifts to how Beijing responds once markets reopen.
🪙 Metals – Gold & Copper
Gold had a massive week, hitting a new all-time high on Friday. With the US shutdown underway, and talk of Fed rate cuts growing louder, investors poured into the yellow metal as a safe-haven.
It was gold’s seventh consecutive weekly gain, and the technical momentum is clearly on its side.
Copper, by contrast, drifted slightly lower. China’s holiday pause meant no new demand signals, and a bit of profit-taking in the futures market kept prices in check. Longer-term, the green energy narrative still supports the copper story – but this week was a pause rather than a pop.
🛢️ Oil
Oil prices were under pressure all week. Brent and WTI both notched their steepest weekly drops since June, weighed down by a cocktail of bearish catalysts:
- The resumption of Kurdish oil exports
- Hints of an OPEC+ output increase
- And, more broadly, rising concern about global demand, particularly out of the US and China.
That said, reports of a potential Gaza–Israel peace framework did bring a flicker of optimism to the oil market late in the week. A meaningful reduction in regional tensions could take some of the risk premium out of energy pricing – though traders remain sceptical until there’s something more concrete.
🔑 Key Takeaways
- UK services slowdown adds pressure, but BoE still on track to cut further.
- US shutdown kicks off, but markets remain calm—and gold rallies hard.
- Gaza–Israel peace talks quietly gain momentum, backed by US diplomacy.
- Eurozone inflation splits opinions at the ECB, with markets hoping for cuts soon.
- China silent for now, but October data will be critical.
- Gold flies, copper steadies, and oil tumbles on demand fears and peace whispers.
