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News
Monday, October 20, 2025
What’s happening: US stocks settled higher on Friday with the easing of trade tensions between the US and China.
What happened: US President Donald Trump confirmed that his meeting with China’s President Xi Jinping was still scheduled for the end of the month.
Investors also monitored the health of US regional banks after they recorded sharp losses in the previous session.
Why it matters: Trump said that his proposed tariffs on Chinese goods would not be sustainable. He continued to blame China for the latest trade tensions, saying that it started after Beijing tightened control over rare earth exports. However, Trump confirmed his plans to meet with China’s President in two weeks in South Korea.
Shares of regional banks had declined after reporting isolated credit issues. The stocks of Fifth Third Bancorp, Zions Bancorporation and Western Alliance recovered on Friday on upbeat quarterly earnings, which eased concerns around wider credit risks.
The KBW Regional Banking index jumped around 1.7% on Friday, rebounding from the 5.0% plunge in the previous session.
More than 50% of S&P 500 companies have reported results so far, with around 86% of those topping market estimates. Analysts project S&P 500 earnings growth of 9.3% year-over-year for the third quarter, compared to 8.8% as of October 1.
On Friday, American Express reported better-than-expected sales and earnings for the third quarter, with upbeat billings and NII lending support to revenue growth. SLB also posted upbeat quarterly results on Friday, with adjusted earnings of 69 cents per share beating consensus estimate of 66 cents.
All three major stock indices settled higher on Friday, after struggling for direction earlier in the session.
The Dow Jones index surged 238.37 points, or 0.52%, to close at 46,190.61, while the S&P 500 added 0.53% to reach 6,664.01 and the Nasdaq 100 jumped 0.65% to 24,817.95.
What to watch: Data on CB Leading Index (1800 UAE Time) will be released today. The Leading Index, which fell 0.5% in August, is expected to rise by 0.1% in September.
Context: The CAD/USD forex pair rose this morning as investors assessed comments from the Bank of Canada governor and the Prime Minister.
Details: Bank of Canada’s governor Tiff Macklem said the economic growth remains soft, while warnings that spillovers from Trump’s tariff policies could further impact the economy.
Canada’s GDP shrank 1.6% on an annualised basis the second quarter, following a steep decline in exports. Canada’s Prime Minister Mark Carney dismissed calls to respond against tariffs imposed by the US, saying the two regions remain in negotiations on major sectors.
Foreign investors raised their holdings of Canada’s securities by C$25.9 billion in August, down from C$26.7 billion in the previous month. The latest growth was driven by an inflow of C$32.6 billion into debt securities.
Lower prices of crude oil, one of Canada’s major exports, weighed slightly on the loonie. WTI crude oil prices fell 0.4% to $57.34 a barrel this morning.
The US dollar continued to be weighed down by the ongoing government shutdown and trade tensions with China.
The CAD/USD pair gained 0.1% to 1.4007 this morning, while the S&P/TSX Composite Index fell 1.15% to close at 30,108.48 on Friday.
What to watch: Investors await data on Canada’s PPI (1630 UAE Time) and raw materials prices (1630 UAE Time) today. Canada’s industrial producer prices, which grew by 0.5% in August, are expected to decline by 0.3% in September. Analysts expect Canada’s raw materials price index to decline 0.4% in September following a 0.6% downturn in August.
Other Markets: European indices closed lower on Friday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index down by 0.86%, 1.82%, 0.18% and 0.95%, respectively.
Ukraine’s drones hit the Orenburg gas processing plant in southern Russia, which forced the country to suspend its gas intake from Kazakhstan. The news sent the RUB/USD pair lower in forex trading this morning.
China’s industrial production surged by 6.5% year-over-year in September, accelerating from 5.2% in August. The latest reading topping market expectations of 5.0% lent support to the CNY/USD forex pair.
Italy’s credit rating was upgraded by DBRS Morningstar from ‘BBB (high)’ to ‘A (low)’, which sent the EUR/USD pair higher in forex trading this morning.
New Zealand’s annual inflation rate accelerated to 3% in the third quarter, from 2.7% in the previous period. The latest reading came in-line with expectations, which lent support to the NZD/USD forex pair.
Malaysia’s economy grew by 5.2% year-over-year in the third quarter, up from 4.4% growth in the previous quarter, sending the MYR/USD pair higher in forex trading this morning.
Eurozone’s current account (1200 UAE Time), 2028 EU-Bonds auction (1345 UAE Time), 2033 EU-Bonds auction (1345 UAE Time) and 2045 EU-Bond auction (1345 UAE Time), Italy’s construction output (1200 UAE Time) and current account (1300 UAE Time), Germany’s 3-month Bubill auction (1330 UAE Time) and 9-month Bubill auction (1330 UAE Time), France’s 12-month BTF auction (1700 UAE Time), 3-month BTF Auction (1700 UAE Time) and 6-month BTF auction (1700 UAE Time), US 3-month Bill auction (1930 UAE Time) and 6-month Bill auction (1930 UAE Time), as well as Argentina’s balance of trade (2300 UAE Time).
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