Week in review
Week of 12 October: hot inflation, a quiet Fed chair
US inflation rose to 3.7%, producer prices jumped 1.3% in a month, retail sales beat forecasts, Australia lost 39,300 jobs, Fed Chair Warsh gave no signal on October, Brent reached its highest since May, and what the week meant on a challenge account.
On Monday we listed the week's events: US consumer prices, a crowded Thursday morning, and a speech by Fed Chair Kevin Warsh. Here is how they actually came in. The inflation data ran hot, the dollar rose to its highest in about 18 months on Wednesday, and then gave the gains back after Warsh declined to signal an October hike. Prices below are from the end of Friday's session in New York.
The week's data
| Release | Expected | Result |
|---|---|---|
| US CPI, September, y/y (Wed) | 3.6% | 3.7% |
| US CPI, September, m/m (Wed) | 0.6% | 0.6% |
| US core CPI, September, m/m (Wed) | 0.2% | 0.3% |
| US core CPI, September, y/y (Wed) | 2.5% | 2.6% |
| Australia employment change, September (Thu) | +20,000 | −39,300 |
| Australia unemployment rate (Thu) | 4.6% | 4.7% |
| UK GDP, August, m/m (Thu) | −0.1% | +0.1% |
| US retail sales, September, m/m (Thu) | 0.3% | 0.8% |
| US PPI, September, m/m (Thu) | 0.5% | 1.3%, 6.3% on the year |
| Philadelphia Fed manufacturing index, October (Thu) | 26.5 | 20.9 |
| US initial jobless claims (Thu) | 195,000 | 199,000 |
Wednesday: consumer prices
Consumer prices rose 0.6% in September, as expected, and the annual rate climbed to 3.7% from 3.4%, a tick above forecasts. Gasoline rose 9.1% in the month and accounted for about half of the increase. Core inflation, which leaves out food and energy, rose 0.3% for the month and 2.6% for the year, both a tick above expectations.
The reaction was fast. The dollar index rose about 0.7% to near 102.90, its highest since April 2025, and gold fell about 1.5% to around $4,100 an ounce. Futures markets raised the odds of a Fed hike on 28 October. In the evening the Beige Book described manufacturing growing in most districts, with high fuel costs and tariffs pushing up input prices.
Thursday: a crowded morning
Australia's jobs report opened the day with a miss. Employment fell by 39,300 in September against a gain of about 20,000 expected, and the unemployment rate rose to 4.7%, the highest in five years. The Australian dollar fell on the release, and markets cut the odds of a November rate hike by the RBA to about 15%.
UK GDP grew 0.1% in August, where a small contraction had been forecast.
At 12:30 the four US releases arrived together. Producer prices jumped 1.3% in the month, more than twice the forecast, driven again by energy. Retail sales rose 0.8% against 0.3% expected, but most of the gain came from gas stations. The Philadelphia Fed index fell to 20.9 from 37.8, still positive but well below forecasts, and jobless claims stayed under 200,000.
Friday: Warsh holds back
Speaking at the IMF and World Bank meetings in Bangkok, Warsh declined to say what the Fed would do at its remaining meetings this year and argued that investors should follow the data rather than advance signals. Markets read that as a lower chance of an October move. By Friday the odds of an October hike had fallen to about 16%, while a hike by December stayed near 90%.
Yields, the dollar and major pairs
The US 10-year yield started the week near 5.2% and eased to about 5.07% on Friday, despite the hot data.
- EUR/USD, last Friday
- about 1.120
- EUR/USD, weekly low
- near 1.111, the lowest since May 2025
- EUR/USD, Friday close
- about 1.1225
- Dollar index, Friday
- near 102.00, after about 102.90 on Wednesday
The dollar index fell about 0.5% on Friday and ended a four-week winning streak with its worst week since early September. EUR/USD broke below 1.12 after the CPI report, then recovered and ended the week slightly higher, its first weekly gain in six weeks. USD/JPY stayed near 158, below the 159 to 160 area where traders expect Japan to step in.
Gold, oil and stocks
Gold fell to around $4,100 after the CPI report, recovered as yields eased, and ended near $4,167 an ounce, a little lower on the week.
Oil was the big mover. Brent rose $3.94, or 3.7%, on Friday to settle at $109.86, after briefly touching $110, its highest since May. It gained about 4.9% on the week, on attacks on Saudi Arabia and Ukrainian strikes on Russian refineries.
Stocks fell on a sell-off in chipmakers and worries about AI spending. On Friday the S&P 500 dropped 1.1% to 7,659.44 and the Nasdaq 2.1%, while the Dow lost 0.3%. The S&P 500 ended the week down about 1.9%.
What the week meant on a challenge account
- The first reaction is not the last. The dollar jumped on Wednesday's CPI and gave most of it back by Friday. A position that looked right on Wednesday afternoon could be under water two days later. Size for the whole holding period, not for the first move.
- Four releases at once. Thursday's 12:30 cluster pointed in different directions: hot producer prices, strong headline retail sales, a weak factory survey. Check the restricted event list in your dashboard before such a cluster (Challenge Rules 6.5), and remember that placing a buy stop and a sell stop around a release to catch the first spike is news bracketing, which is prohibited (Challenge Rules 7.2(a)).
- Oil at size. Brent rose $3.94 on Friday. On one lot of 1,000 barrels that is $3,940, almost twice the $2,000 daily room on a $50,000 Sprint. See why 1% risk is a quarter of your day.
- Early releases sit close to the reset. Australia's jobs report came out 30 minutes after the day reset at 00:00 server time. A loss taken on AUD pairs then counted against the new day from its first hour. The rollover period runs from about 23:55 to 00:15, when trading is allowed but execution can be worse (Challenge Rules 6.7).
- The weekend. Positions can be held over the weekend, and the daily limit applies on weekends too (Challenge Rules 6.6). With oil reacting to attacks in the Middle East, a gap at Monday's open counts like any other move, and spreads and slippage go into floating equity (Challenge Rules 6.8). See how the daily drawdown limit works.
Next week
The Fed meets on 27 and 28 October, a week from Tuesday. A full preview of the coming week's events comes on Monday.
This article is market commentary for information only. It is not a forecast, a recommendation or financial advice, and prices are approximate, taken from public market reports at the time of writing. VFUNDED provides simulated trading evaluations: trading activity is simulated and performance rewards are not guaranteed.