Week Ahead for FX, Bonds: Fed Expected to Cut Interest Rates

Redfin has reported a significant shift in the housing market, indicating that American homebuyers are facing affordability challenges as the average 30-year fixed mortgage rate stands at 6.19%. This trend suggests a growing imbalance with more sellers than buyers, marking 2025 as a notably strong buyer's market.

Analysts predict a strong recovery in the luxury market by 2026, following a period of decline due to consumer hesitance stemming from inflation and economic uncertainties. Recent surveys indicate that 60% of respondents in the U.S. and Europe are optimistic about luxury spending, signaling a potential rebound in this sector.

Futures for silver have reached a new record high, buoyed by the Federal Reserve’s inflation metric remaining below 3% in September. This surge reflects a growing investor confidence in precious metals amid shifting economic indicators.

The Federal Reserve's preferred inflation gauge indicated a moderate trend in September, remaining below 3%, with a month-over-month price increase that is not expected to hinder discussions of a potential interest rate cut at the upcoming central bank meeting.

Oil prices have seen a slight decline recently, but analysts anticipate weekly gains as the market prepares for a potential interest rate cut by the U.S. Federal Reserve. This expectation is influencing trading behavior, as investors weigh the implications of monetary policy on oil demand.

US Treasuries concluded their worst week since April, driven by conflicting economic data that raised doubts about the Federal Reserve's potential interest rate cuts in the upcoming year. The decline in Treasuries reflects market uncertainty as investors grapple with mixed signals from the labor market and economic indicators.

Copper prices have surged to a new record high, exceeding $11,350 per ton, driven by fears of a global supply squeeze and increased demand as traders in the U.S. stockpile the metal. This surge is also fueled by optimism surrounding a potential interest rate cut expected next week.

Global stock markets experienced a mostly positive trend, with the exception of Japan, as investors awaited key U.S. inflation data, specifically the personal consumption expenditures price index, which is closely monitored by the Federal Reserve.