October 17th, London Update: Global Markets and Geopolitical Briefing

The Financial Source Podcast

Show Notes — Current Market & News Briefing (October 17, 2025)

FX
The dollar steadied after a turbulent week dominated by renewed U.S.–China trade tensions and regional banking stress. The euro extended gains above 1.17 following supportive ECB commentary and resilient Eurozone industrial data. Sterling held firm near 1.34 as U.K. policymakers hinted at higher taxes on the wealthy amid signs of a softening labour market. The yen strengthened briefly in risk-off flows and after hawkish BoJ remarks suggesting rates should move toward neutral. The Australian dollar remained under pressure following weaker jobs data, while the New Zealand dollar tracked a firmer yuan fix from the PBoC.

Commodities
Gold reached a new all-time high near $4,380/oz before paring back gains, buoyed by the weaker dollar and market uncertainty tied to U.S. policy and global growth. Oil traded indecisively following a larger-than-expected U.S. crude inventory build and subdued risk sentiment, while Indian refiners reportedly cut Russian crude imports by roughly half after U.S.–India energy talks. Base metals, including copper, slipped as risk-off sentiment weighed and Chinese inflation data pointed to sluggish demand.

Trade & Tariffs
The U.S. reaffirmed that it is “in a trade war with China,” with President Trump defending tariffs as vital for national security. China’s Commerce Ministry countered that its rare-earth export measures are not an outright ban and that civilian-use applications will be approved. Washington is reportedly preparing to announce tariff relief for parts of the U.S. auto industry. South Korea remains in talks with the U.S. over its large investment pledge and tariff terms, while Mexico is negotiating adjustments to duties on heavy-truck parts. Officials also dismissed reports of widespread tariff evasion in the appliance sector.

Geopolitics
In the Middle East, President Trump warned that U.S. or Israeli forces could resume operations in Gaza if Hamas fails to uphold ceasefire terms. Hamas said recovery of hostages’ bodies is delayed by damaged infrastructure but reiterated its commitment to the agreement. Meanwhile, diplomats are preparing for a Cairo meeting involving U.S., European, and Arab officials to discuss the next phase of the peace plan.
On the Russia–Ukraine front, President Trump and President Putin held what both described as a productive call, with staff-level meetings set for next week and a potential summit in Budapest under discussion. President Zelensky said Ukraine remains prepared for further offensives but is open to diplomatic movement.
Elsewhere, the Bank of Japan noted global trade-policy uncertainty as a risk to growth while reiterating its gradual approach to policy normalization.

Summary
Markets remain driven by dollar positioning, gold’s record highs, oil’s supply dynamics, and the evolving U.S.–China tariff narrative. Geopolitical developments in Gaza and Ukraine add layers of risk heading into the weekend.