Monthly Review - October 2025
In brief
The markets
2.3%
2.9%
1.1%
2.4%
0.3%
3.6%
3.9%
1.7%
6.2%
Source: Bloomberg 31.10.2025, returns in local currency
Top stories
West meets East
The US and China ramped up trade tensions ahead of the Asia-Pacific Economic Cooperation Forum. China proposed restrictions on the export of rare earth metals, critical to the production of electric vehicles (EVs), smart phones and fighter jets. The US responded with threats of an extra 100% tariff on Chinese exports. Tensions later cooled as a face to face meeting between Presidents Trump and Xi drew closer. The US president also visited Japan’s newly elected first female prime minister, Sanae Takaichi. The two leaders heralded a “new golden age” for the US-Japan security alliance.
Silver steals the prize
Silver knocked gold off the top spot as best performer of the year so far. The rise of the precious metal topped 85%, driven by demand from the solar, EV, electronics and AI sectors. US equity indices, such as the S&P 500 and the Nasdaq, made new highs, prompting warnings of a bubble. Nonetheless, money continued to pour into the markets, boosted by hopes of an imminent rate cut by the US Federal Reserve. Elsewhere, the ‘Takaichi trade’ caused Japanese equities to surge, as the country’s new leader promised increased spending on defence and nuclear energy.
Circle of AI deals expands
OpenAI, the creator of ChatGPT, placed itself at the centre of a web of deals topping $1.5 trillion. Multiyear supply deals were signed with tech giants such as Nvidia, Oracle and Broadcom, aiming to guarantee delivery of ever increasing quantities of chips and computing infrastructure. The generative AI pioneer also moved to a new corporate structure, with Microsoft taking a stake of 27%. The circularity of these deals between suppliers, investors and customers was noted. Meanwhile, Nvidia became the first company to hit a valuation of $5 trillion.
Pushback on petrol ban
European carmakers have criticised the EU’s 2035 ban on petrol vehicles as overly rigid, arguing Brussels has ignored industry concerns. The European Automobile Manufacturers’ Association (ACEA) said the policy rests on outdated assumptions, as it called for greater flexibility, including credits for carbon neutral fuels, smaller EVs and car scrappage schemes. Environmental groups warned such measures could halve EV sales and undermine net zero goals. ACEA cited higher energy costs, weak demand and Chinese competition as obstacles, while its critics cautioned that diluting the ban would erode investor confidence. This comes as the Trump administration rolls back legislation designed to reduce US greenhouse gas emissions.
On the radar
The re-escalation of trade war tensions has highlighted the volatility of global economic norms and the delicate balance underpinning international trade. The challenge for governments and businesses will be in navigating shifting trade dynamics amid persistent policy uncertainty.
Reappointed French Prime Minister Sébastien Lecornu secured enough support to survive two confidence votes, after shelving a contentious pension reform bill. He now faces an uphill struggle to get a budget through parliament that would meaningfully address France’s mounting debt.
Rare earth minerals have emerged as a new frontier of economic and national security policy. The US has signed agreements with Australia, Japan and others, making rare earths a central pillar of global geopolitical strategy, with the aim of challenging China’s dominance over supply.