October Market Commentary

A view of the markets in October 2025. Commentary provided by Thornbridge Appointed Representatives.

An overview of Global Movements, from Upper Park Trading Ltd, a Thornbridge Appointed Representative 

The Bank of Canada cut rates but cautioned that further adjustments would need more than a couple of months of data, dampening market expectations of further action, while Australian inflation data came in higher, also reducing expectations of further cuts.

UK yields have worked their way lower, largely on a continuous stream of media articles speculating on tax rises in the upcoming UK budget. Many of these are probably trial balloons to gauge public reaction, but their numbers do suggest a strong likelihood of a tighter fiscal stance. Ordinarily this would translate into an expectation of a sizable easing of monetary policy, but markets are guarded by the nature of the policies last year being poorly constructed so as to elevate inflation.

The Bank of Japan, under Governor Ueda, continues to wait for more evidence of any significant tariff impacts upon trade, pushing rates and FX markets into waiting mode. This despite, a second consecutive meeting where two members dissented in favour of hiking.

All central banks continue to wrestle with managing the inflation impact of high government spending necessitating a subduing of the private sector. Most inflation is cost push, and policy makers remain split on the best course of combat.

An insight into Market Returns, by Portfolio Manager Consultancy Limited, a Thornbridge Appointed Representative 

Global equities advanced in October, with developed markets up 2.8% overall. Gains were supported by progress in US-China trade discussions and a strong US corporate earnings season. Growth stocks outperformed value once again, buoyed by enthusiasm around AI.

The S&P 500 rose 2.3%, recovering from mid-month volatility as over 80% of reporting companies beat earnings expectations. The UK FTSE All-Share gained 3.7%, helped by falling gilt yields, strength in mining stocks, and weaker sterling. European equities were more subdued amid political noise in France and lower exposure to commodities and AI.

In fixed income, UK Gilts were among the strongest performers, with 10-year yields falling about 30bps. Eurozone bonds also rallied, particularly in Italy and Spain, while Japanese government bonds lagged on expectations of further policy normalisation.

_{(Source: Bloomberg as of 31 October 2025)}

Finally, Luna Investment Management comment on what might be ahead

Looking forward, as we come to the end of the year Central Bank will continue to be in focus; will we see further interest rate cuts?

Closer to home the UK budget will dominate the headlines and what changes the Chancellor may make to balance the books.

Geopolitical and tariff headlines have been a consistent theme in 2025, and we would expect that to continue.

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