Weekly Market Update (Oct 26, 2025)
- Market Hedwig
- Oct 26
- 2 min read
HIGHLIGHTS
Expect volatility in the coming week because of the Q3 results from big tech and meeting between US and China presidents. Markets expect Fed to cut rate by 25bps.
CPI: The softer than expected CPI data support the easing. Although it is mainly driven by the significant decline in the shelter costs, the risks around the baseline rate are still balanced. 25bps cut in the coming week is likely.
Japan: Markets expect the Bank of Japan (BoJ) to remain cautious and wait for more clarity on wage hikes and tariff impact. It is likely that BoJ would communicate with the new government before hiking, and the movement of yen would also be a crucial factor.
China: Economic data shows that the domestic demand is weakening, driven by the falling retail sales figures. It has dropped back to the pre-policy pivot level.
MARKETS
*Data as of market close. 5-day change ending on Friday.
VIEW FROM THE STREET
Equity
Goldman Sachs: For Q3 results, around 70% of S&P500 companies have beaten EPS expectations by more than one standard deviation.
Morgan Stanley: The bullish equity market has extended beyond the enthusiasm for the AI theme, and has moved toward the highest beta part of the market. It suggests that the markets believe in a broad economic reacceleration and gains in operating leverage and productivity
Fixed Income
UBS: 10Y treasury yields dropped to the lowest level of the year, and it can drop even lower. We expect quality bonds to outperform during times of market fear
Standard Chartered: We expect the systematic risk from the US credit issues would be limited. We are still optimistic that the short-duration US high yield bonds can deliver favorable risk-adjusted return.
Economy
UBS: Inflation went up in recent months and markets expect Fed to cut rate by 25bps. Fed chair also highlighted the risk of softer job market and it is time for Fed to decrease the bond holding size.
Goldman Sachs: Although data shows that firing remains low, other indicators are showing labour market weakness which is consistent with stagnation.
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DISCLOSURE
This newsletter is meant for informational purposes only and is not investment advice. Always consult a licensed investment professional before making important investment decisions. Advertising and sponsorship do not influence editorial content or decisions. Market Hedwig is not responsible for the promises made or the quality or reliability of the products or services offered in any advertisement.
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