In Germany, the manufacturing PMI by S&P Global and Hamburg Commercial Bank (HCOB) edged up from 49.5 to 49.6, while the services PMI rose from 51.5 to 54.5, exceeding forecasts of 51.0. Eurozone-wide figures, due at 10:00 (GMT+2), are expected to show a decline from 49.8 to 49.5 in manufacturing and from 51.3 to 51.1 in services. The European Central Bank (ECB) has nearly completed its monetary easing cycle, with analysts expecting just one more rate cut early next year.

Meanwhile, expectations for the U.S. Federal Reserve suggest a 25-basis-point rate cut during its October meeting. The regulator may cut again in December or accelerate its current monetary policy adjustments. Recently released U.S. data showed existing home sales rising 1.5% in September, following a 0.2% drop in August, reaching 4.06 million units versus 4.10 million expected. Investors also noted a sharp increase in the Kansas City Fed manufacturing activity index—from 4.0 points to 15.0 in October.

GBP/USD

The pound is declining against the U.S. dollar, approaching 1.3320 in an attempt to break below recent lows from October 14. Market attention is focused on retail sales data, showing a 1.5% year-over-year rise in September versus expectations of 0.6%, while the monthly figure slowed from 0.6% to 0.5%. Analysts had forecasted a 0.2% drop.

Traders also reacted to the GfK Consumer Confidence Index for October, which improved from –19.0 to –17.0, beating forecasts of –20.0. At 10:30 (GMT+2), new PMI data will be released: manufacturing is expected to climb from 46.2 to 46.6, services from 50.8 to 51.0, and the composite index from 50.1 to 50.6. Meanwhile, the ongoing U.S. government shutdown has entered its fourth week, with Democrats and Republicans still unable to agree on temporary funding. The situation has already triggered federal layoffs and threatens airport operations, potentially causing severe transport disruptions during the holiday season.

AUD/USD

The Australian dollar trades sideways near 0.6500, as investors await new business activity data. The S&P Global Manufacturing PMI dropped from 51.4 to 49.7, while services rose from 52.4 to 53.1, and the composite index inched up from 52.4 to 52.6.

Markets are also watching for developments ahead of the planned October 30 meeting between U.S. President Donald Trump and China’s President Xi Jinping. The discussion is expected to focus on ongoing trade tensions. Earlier this month, the White House announced new tariffs on Chinese goods—first at 100%, later raised to 150%—after Beijing tightened export controls on rare earth metals, requiring foreign companies to obtain licenses to use locally sourced materials. The decision risks further disruptions to electronics and semiconductor supplies and may escalate the Taiwan debate.

USD/JPY

The U.S. dollar is extending gains against the yen, testing 153.00 and reaching its highest level since October 10. Japan’s inflation data provided limited support for the yen: headline CPI rose from 2.7% to 2.9% in September, while the core index excluding food and energy slowed from 3.3% to 3.0%. The Bank of Japan may thus continue tightening monetary policy, although analysts warn of growing pressure from new Prime Minister Sanae Takaichi, known for her dovish stance. Japan’s October business activity data also showed weakness: manufacturing fell from 48.5 to 48.3, while services slipped from 53.3 to 52.4.

XAU/USD

Gold prices are retreating, with the XAU/USD pair testing the 4100.00 level as investors take profit after recent gains. The broader market outlook remains largely unchanged. The ongoing U.S. government shutdown continues to weigh on the dollar and could further worsen the country’s economic prospects.

Recent U.S. data showed existing home sales up 1.5% month-over-month to 4.06 million units in September, while the Kansas City Fed’s manufacturing index surged from 4.0 to 15.0. Gold demand rebounded late in the week after President Donald Trump announced new sanctions on Russian energy firms Rosneft and Lukoil and their subsidiaries, fueling fears of potential energy supply disruptions. India and China have reportedly reduced purchases of Russian crude to avoid secondary sanctions. Meanwhile, the White House announced plans for a ground operation in Venezuela, citing escalating narcotics-related concerns.