IMF Raises Global Growth Forecast to 3.2% for 2025

Economic

Forex

Summary:

The International Monetary Fund (IMF) has raised its global growth forecast for 2025 to 3.2%, up from its July prediction of 3.0%, while maintaining its 2026 outlook at 3.1%.

The upward revision, announced Tuesday in the IMF’s World Economic Outlook, comes as tariff impacts and financial conditions have proven less severe than initially feared. However, the organization warned that a potential escalation in the U.S.-China trade war threatened by President Donald Trump poses a "significant risk" to global economic growth.

IMF Chief Economist Pierre-Olivier Gourinchas noted that recent trade agreements between the U.S. and major economies have avoided the worst of Trump’s threatened tariffs with minimal retaliation. This marks the IMF’s second growth upgrade since April, when it had projected a more pessimistic 2.8% growth rate following Trump’s implementation of broad "reciprocal" tariffs.

However, tensions escalated Friday when Trump threatened 100% duties on Chinese goods, on top of existing tariffs averaging 55%, in response to Beijing’s expanded export controls on rare earths. Treasury Secretary Scott Bessent indicated Monday that negotiations were underway to prevent a major trade war escalation.

The IMF’s downside risk scenario shows that if tariffs increase by 30 percentage points on Chinese goods and 10 percentage points on goods from Japan, the euro area, and Asian emerging markets, global growth could be reduced by 0.3 percentage points in 2026, with negative impacts increasing to more than 0.6 percentage points through 2028.

U.S. growth remains resilient in the IMF’s baseline forecast, with a slight upgrade to 2.0% for 2025 from the previous 1.9%, and 2.1% for 2026. These figures remain below the 2024 growth rate of 2.8%.

The euro zone growth forecast improved to 1.2% from 1.0%, driven by fiscal expansion in Germany and strong momentum in Spain. Japan saw a significant increase to 1.1% from 0.7%, benefiting from front-loaded trade and stronger wage growth.

The IMF maintained its China growth forecasts at 4.8% for 2025 and 4.2% for 2026, while warning that "the outlook remains worrisome" with elevated financial stability risks as the property sector continues to struggle.

Global headline inflation forecasts remained largely unchanged at 4.2% for 2025 and 3.7% for 2026, though the IMF noted divergence among countries, with inflation forecasts rising in the U.S. as firms begin passing tariff costs to consumers.

Source: Yahoo Finance

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Samantha Luan

Stocks

Forex

Economic

Most of China’s biggest defaulted developers are reaching a restructuring milestone, as creditors increasingly accept that better terms are unlikely during a real estate crisis that has triggered $130 billion of defaults.Eight of China’s 10 most indebted developers have largely if not entirely put the offshore restructuring process behind them. One of those, Sunac China Holdings Ltd., which has already gained majority support for its restructuring from creditors, is scheduled to hold a vote on Tuesday, among the last procedural hurdles it has to clear.

While policymakers have rolled out a slew of measures aimed at propping up the housing market, sales are still sluggish and Chinese developers continue to face challenges. So far, eight of the country’s 30 major builders that have defaulted on dollar debt have received liquidation orders, including China Evergrande Group and China South City Holdings Ltd., according to Bloomberg-compiled data. Many defaulted companies are still working on onshore debt plans also.

Bondholders who once banged tables and peppered executives with questions during debt negotiations are now more muted, people familiar with several Chinese real estate restructuring deals said.“Creditors have come to realize that things won’t get better anytime soon, so they’re willing to take larger haircuts,” said Ron Thompson, managing director and head of the Asia restructuring practice at Alvarez & Marsal.When Sunac’s restructuring process began in 2022, creditors balked at a proposal to swap some debt for equity at a conversion price of HK$20 ($2.57) a share, Bloomberg reported earlier. In February 2023, they held contentious all-day meetings with the Chief Financial Officer Gao Xi seeking better terms. Months later, more than 75% of offshore creditors had signed on to the deal with a much lower conversion price.

Less than two years after completing its initial restructuring, Sunac ran into repayment problems and pursued another one. This time, the deal took about two months to officially wrap up, compared with a little over a year for its first restructuring.

Such condensed debt talks are becoming more common across the property sector. In general, some bondholders don’t even bother to dial in to calls about small things once the basic restructuring framework is done, according to two restructuring advisers.Yuzhou Group Holdings Co., for example, spent more than two years negotiating its restructuring, which it sought court approval for last year. When it later revised some terms, it faced little opposition from bondholders, according to people familiar with the matter, and the deal was concluded within months.

While some creditors are willing to accept more onerous terms, others are choosing to abandon debt talks and seek immediate liquidation.That was the case with state-backed builder China South City. The company missed a couple of deadlines set by a key bondholder group and eventually proposed restructuring terms that were far from the recovery of around 70-80 cents on the dollar that bondholders had sought, people familiar with the matter said.

At its last winding up hearing in August, Hong Kong High Court Judge Linda Chan asked creditors if one more adjournment would be acceptable to them. But the bondholders’ lawyer insisted on immediate liquidation instead.Sunac declined to comment. Yuzhou and China South City didn’t respond to requests for comment.The China real estate era has changed and the last thing international creditors are looking for is dragged out talks, said Jason He, debt capital markets advisory leader at Deloitte China.“Either take the terms or press the liquidation button — both work,” he added.

Source: Bloomberg Europe

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Adam

Stocks

Earnings Kick Off Before the Bell

Daily S&P 500 Index (SPX)

Tuesday, October 14, 2025, delivers a packed schedule that could steer U.S. markets for weeks.

At 11:00 GMT, JPMorgan Chase, Citigroup, and Wells Fargo release third-quarter results, followed by Goldman Sachs and BlackRock at 12:30 GMT. With the government shutdown freezing most economic data, earnings carry outsized influence on sentiment and positioning ahead of Powell’s remarks later in the day.

Analysts expect JPMorgan (JPM) to post $4.85 EPS on $45.5 billion revenue (+11% YoY), extending its run of eight EPS beats in the last nine quarters.

Goldman Sachs (GS) is forecast to rebound sharply — EPS up 30% to $10.99 —J thanks to revived M&A activity, stronger trading revenue, and a pickup in deal fees.

Citigroup (C) should post 15% earnings growth as cost cuts and balance-sheet cleanup continue.

Wells Fargo (WFC), however, presents an anomaly: analysts see revenue nearly 50% lower YoY despite modest EPS growth — a divergence likely tied to one-time adjustments or divestitures not yet detailed in consensus data.

FactSet projects S&P 500 earnings growth of 8% YoY, the ninth straight quarter of expansion. Historically, realized results exceed consensus by around six points, implying potential growth near 14%. That backdrop underscores why expectations — and valuations — are stretched.

Powell’s Last Word Before the FOMC

At 15:20 GMT, Federal Reserve Chair Jerome Powell delivers his final scheduled remarks before the 29–30 October FOMC meeting at the NABE conference in Philadelphia.

Markets price 97% odds of an October rate cut and 89% for December, but any hint of “higher for longer” could challenge that view. Strong consumer credit and loan growth in bank reports would give the Fed cover to stay patient, while signs of stress could accelerate easing expectations.

Trade Front Turns Hostile Again

On Friday, President Trump announced new 100% tariffs atop existing 30% rates on Chinese imports, effective 1 November, citing Beijing’s curbs on rare-earth exports crucial for AI and defence. China retaliated with $50-per-ton port fees on U.S. ships, plus 10% tariffs on timber and 25% on furniture starting today.

Sentiment, Levels, and Options Positioning

The AAII bullish reading (45.9%) marks a fourth week above average, leaving markets vulnerable to disappointment. The VIX near 16 remains calm, but a move above 18 — its historical median — would signal renewed risk hedging.

Base vs. Risk Scenarios

Based on current market positioning and consensus expectations for Q3 results, traders generally see:

Base Case (≈60% probability) – Banks deliver 3–5% earnings beats and Powell strikes a balanced tone. Markets hold steady as investors wait for follow-through from later bank and tech reports.

Bull Case (≈20% probability) – Earnings exceed expectations by more than 8% and Powell sounds dovish, reinforcing soft-landing optimism and extending the rally.

Bear Case (≈20% probability) – Bank results disappoint while Powell leans hawkish or trade tensions escalate, prompting risk reduction and profit-taking.

What to Watch

JPM EPS > $4.87 → confirms consumer strength, supports financials. Below $4.80 → credit quality concerns.

Powell tone → dovish = rally extension; firm = profit-taking.

Semiconductors → sensitive to tariff headlines, watch for swings.

Outlook

Tuesday’s convergence of earnings, Fed guidance, and trade escalation creates a high-stakes inflection point. The bullish case requires both solid bank results and a measured Powell — a high bar given stretched optimism.

The most probable path: initial strength on earnings, fading into the close if Powell leans cautious ahead of the FOMC. With nine straight quarters of earnings growth and valuations elevated, traders may prefer taking profits on strength rather than chasing highs.

Source: fxempire

Risk Warnings and Disclaimers

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Warren Takunda

Economic

The U.S. and global economies will grow a bit more this year than previously forecast as the Trump administration’s tariffs have so far proved less disruptive than expected, the International Monetary Fund said Tuesday, though the full impact of those policies is still emerging.

The United States’ economy will expand 2% in 2025, the IMF projected in its influential semi-annual forecast, the World Economic Outlook. That is slightly higher than the 1.9% forecast in the IMF’s last update in July and 1.8% in April. The U.S. should grow 2.1% next year, also just one-tenth of a percent faster than its previous projection, the IMF said.

The global economy, meanwhile, will grow 3.2% this year, up from a 3% estimate in July, the IMF forecast, and 3.1% in 2026, the same as its previous estimate.

The figures represent a bit of a round-trip for the IMF: In January, before Trump began imposing tariffs, it had forecast global growth of 3.3%, only slightly higher than its newest estimate. While the U.S. and world economies have fared better than expected, it’s too soon to say they are fully in the clear, the IMF said, as Trump has continued to make tariff threats and it can take time for changes in international trade patterns to play out.

The reasons for the better performance “are clear,” IMF chief economist Pierre-Olivier Gourinchas said in a blog post.

“The United States negotiated trade deals with various countries and provided multiple exemptions,” Gourinchas wrote. “Most countries refrained from retaliation, keeping instead the trading system largely open. The private sector also proved agile, front-loading imports and speedily re-routing supply chains.”

By front-loading imports, many companies were able to stock up on goods before the duties took effect, enabling them to avoid or delay price increases.

Yet many of those factors only reflect “temporary relief, rather than underlying strength in economic fundamentals,” the IMF’s report said.

The IMF also said that import price data in the U.S. shows that so far importers and retailers are paying most of the tariffs, not overseas companies, as many Trump administration officials have predicted. Over time, those firms are likely to pass on more of the price hikes to consumers, the IMF said.

There are signs that some downsides of the higher tariffs are starting to emerge, the IMF outlook said. Core inflation, which excludes the volatile food and energy categories, has ticked up to 2.9%, according to the Federal Reserve’s preferred measure, up from 2.7% a year ago. Hiring has ground to nearly a halt, which could partly reflect a more cautious approach by many firms in the wake of the uncertainty created by the higher tariffs.

The IMF’s forecasts are modestly more optimistic than many private-sector economists’ expectations. The National Association for Business Economics, a group of academic and business economists, on Monday forecast that the U.S. would grow just 1.8% this year and 1.7% in 2026.

Nearly two-thirds of the economists surveyed by the NABE said they think the administration’s duties are nevertheless slowing growth, by up to a half-percentage point.

Other trends are offsetting some of the downsides of tariffs in the U.S., Gourinchas said. For example, a clampdown on immigration has reduced the supply of workers at the same time that hiring has slowed. As a result, the unemployment rate has remained low.

An artificial intelligence-driven investment boom in data centers and computing power has also provided a lift to the economy, Gourinchas noted in his blog post.

China, meanwhile, has weathered the hit from U.S. tariffs by sending more of its goods to Europe and Asia, rather than the United States, and its currency has depreciated, which has made its exports cheaper. The IMF is forecasting that China’s economy will expand 4.8% this year and 4.2% in 2026, the same as in July.

In Europe, Germany is bolstering growth by increasing government spending to build up its military, Gourinchas said. The IMF now expects the 20 countries that use the euro to grow 1.2% this year, up from a 1% forecast in July, and 1.1% next year, the same as three months ago.

The IMF is a 191-nation lending organization that works to promote economic growth and financial stability and to reduce global poverty.

Source: AP

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Michelle

Economic

Commodity

Russia’s seaborne crude shipments rose to a 28-month high in the past four weeks, amid rising production and Ukrainian attacks on refineries that are forcing the diversion of supplies to export terminals.

Four-week average shipments from the country’s ports were 3.74 million barrels a day to Oct. 12, according to vessel-tracking data compiled by Bloomberg, the highest since June 2023. The average provides a clearer picture of underlying trends than more volatile weekly figures.

Moscow has been slowly boosting its crude production in line with a rising target under a months-long drive by the OPEC+ producer group to return supplies to the market. Since March, before the move began, Russia’s production target has increased by more than 500,000 barrels a day.

The amount of crude available for export has also been swelled in recent weeks by intensifying Ukrainian drone strikes on Russian oil refineries. At least 28 attacks have been launched since the start of August, compared with a total of 21 in the first seven months of the year.

Crude that can’t be processed as a result of the strikes is likely being diverted for export through Russia’s Baltic and Black Sea ports. Shipments from Primorsk, Ust-Luga and Novorossiysk averaged 2.3 million barrels a day in the latest four-week period. That could leave very little effective spare capacity at the terminals, particularly with the approach of winter when adverse weather conditions can impact loading operations.

A total of 35 tankers loaded 27.2 million barrels of Russian crude in the week to Oct. 12, vessel-tracking data and port-agent reports show. The volume was virtually unchanged from 27.17 million barrels on the same number of ships the previous week.

On a daily average basis, shipments in the week to Oct. 12 hit 3.89 million barrels a day, the highest in five weeks. In addition, two cargoes of Kazakhstan’s Kebco grade were shipped during the week, one each from Ust-Luga and Novorossiysk.

Drops in exports from Russia’s Black Sea and Arctic ports were more than offset by an increase in shipments from the Baltic and the Pacific.

On a four-week average basis, the gross value of Moscow’s exports rose by about $60 million to a one-year high of $1.49 billion a week in the 28 days to Oct. 12.

Using this measure, the export prices of Russia’s Urals from the Baltic and Black Sea were virtually unchanged at $54.78 and $55.08 a barrel respectively. The price of Pacific ESPO slipped by $0.40 a barrel to average $62.02 a barrel. Delivered prices in India were up by $0.10 a barrel to $65.61 a barrel, all according to numbers from Argus Media.

On a weekly basis, the value of exports averaged about $1.53 billion in the 7 days to Oct. 12, little changed from the period to Oct. 5.

The price of Urals cargoes from the Baltic fell by about $0.40 a barrel to average $53.87, while the value of shipments from the Black Sea slipped by $0.20 to $54.35 a barrel during the week.

The price of key Pacific grade ESPO was down by $0.70 a barrel to average $60.92 a barrel.

Observed shipments to Russia’s Asian customers, including those showing no final destination, rose to 3.4 million barrels a day in the 28 days to Oct. 12, up from a revised 3.19 million barrels a day in the period to Oct. 5 to reach their highest since June 2023.

While the amount of Russian crude heading to both China and India appears to be falling steeply, there are growing quantities on vessels yet to show a final destination for that pattern to be reversed. Tankers are increasingly showing no final destination until they are well across the Arabian Sea, while some never show a final destination, even after mooring to discharge.

Flows on tankers signaling Chinese ports fell to 1.1 million barrels a day in the four weeks to Oct. 12, while the amount destined for India fell to 810,000 barrels a day. But there is the equivalent of almost 1.5 million barrels a day on vessels yet to show a final destination.

Of that, about 1.2 million barrels a day is on ships from Russia’s western ports showing their destination as Port Said or the Suez Canal, or those from Pacific ports with no clear delivery point, and a further 270,000 barrels a day is on tankers yet to signal a destination.

Flows to Turkey in the four weeks to Oct. 12 slipped back to about 310,000 barrels a day from a revised 340,000 barrels a day in the period to Oct. 5. Shipments to Syria were unchanged at about 35,000 barrels a day.

This story forms part of a weekly series tracking shipments of crude from Russian export terminals and the gross value of those flows. The next update will be on Tuesday, Oct. 21.

All figures exclude cargoes identified as Kazakhstan’s KEBCO grade. Those are shipments made by KazTransoil JSC that transit Russia for export through Novorossiysk and Ust-Luga and are not subject to European Union sanctions or a price cap. The Kazakh barrels are blended with crude of Russian origin to create a uniform export stream. Since Russia’s invasion of Ukraine, Kazakhstan has rebranded its cargoes to distinguish them from those shipped by Russian companies.

Bloomberg classifies ship-to-ship transfers as clandestine if automated position signals appear to be switched off or falsified — a tactic known as spoofing — to hide the two vessels involved coming together to make the cargo switch.

Vessel-tracking data are cross-checked against port-agent reports as well as flows and ship movements reported by other information providers including Kpler and Vortexa Ltd. and satellite imagery covering Russian ports.

Source: Bloomberg Europe

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Adam

Commodity

Market Overview

WTI crude oil slid to $59.29 per barrel, reversing early gains as renewed geopolitical tensions and rising global production weighed on sentiment. Traders balanced concerns over potential supply disruptions against easing risk premiums in key producing regions.

Meanwhile, increasing output from OPEC+ and non-OPEC producers fueled worries of a growing surplus. In natural gas markets, prices hovered near $3.07, supported by short-term demand resilience but capped by mild weather forecasts.

Overall, energy markets remain volatile as geopolitical uncertainty and shifting trade expectations continue to drive fluctuations in oil and gas prices.

Natural Gas Price Forecast

Natural Gas (NG) Price Chart

Natural Gas is trading around $3.07, holding just above key support at $3.06 after a sharp decline. The price remains under the 50-day EMA at $3.25 and 200-day EMA at $3.30, keeping short-term sentiment bearish.

The RSI near 32 signals oversold conditions, suggesting potential for a short-term bounce if support holds. A break above $3.19 could trigger a recovery toward $3.30, where the 200 EMA aligns with horizontal resistance.

However, failure to stay above $3.06 may push prices lower toward $2.98 and $2.90. The broader setup hints at consolidation within a descending channel, with bulls needing a sustained move above $3.20 to regain control.

WTI Oil Price Forecast

WTI Price Chart

WTI Crude Oil WTI Oil $58.29 -2.46% is trading around $59.29, struggling to recover after falling from resistance near $61.90. The price remains below both the 50-day EMA at $61.12 and the 200-day EMA at $62.69, showing persistent bearish control. Fibonacci retracement levels highlight $60.00 as key resistance, while support is seen at $58.20.

A break below this level could open the path toward $57.40. The RSI near 37 indicates weak momentum, suggesting buyers are hesitant.

If price holds above $59.30, a short-term bounce toward $60.50 remains possible, but the broader outlook stays cautious until oil closes decisively above $61.10, confirming a shift in momentum.

Brent Oil Price Forecast

Brent Price Chart

Brent Crude Oil is trading near $63.07, struggling to sustain momentum after rejecting resistance close to $65.50. The price remains below both the 50-day EMA at $64.90 and 200-day EMA at $66.38, confirming the prevailing bearish structure.

Fibonacci retracement levels indicate key resistance at $64.20, with support near $62.00. A close below $62.00 could expose further downside toward $60.90. The RSI at 36 suggests weak buying pressure, showing that sellers still dominate the market.

However, if Brent holds above $63.00, a short-term corrective bounce toward $64.20 is possible before renewed selling pressure resumes. The broader trend stays bearish unless price reclaims the $66.00 zone with strong volume.

Source: fxempire

Risk Warnings and Disclaimers

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Warren Takunda

Economic

European stock markets opened in the red on Tuesday despite a Wall Street rally on Monday, when US President Donald Trump offered reassurances about Washington’s relationship with Beijing.

Despite the president's remarks, investor sentiment remains shaky as the world's two largest economies butt heads over trade disputes.

Both nations will place fees on each other's ships on Tuesday, following a US investigation into China’s growing dominance in world shipbuilding. Washington will impose a fee of $50 per tonne (€43.27) of cargo on Chinese vessels in American ports, while China will charge 400 yuan (€48.65) per tonne, a levy that will steadily increase.

Also on Tuesday, Beijing imposed sanctions on five US-linked subsidiaries of the South Korean shipbuilder Hanwha Ocean as it seeks to assert its maritime dominance.

While the status of trade talks between China and the US remains unclear, Trump said he still may meet with Chinese leader Xi Jinping later this month on the sidelines of a regional summit.

Over the weekend, US President Donald Trump first threatened China with 100% tariffs, before stating in a social media post: "Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I. The USA wants to help China, not hurt it!!!"

Aside from US-China trade tensions, investors in Europe also remain cautious as the new French government, led by Sébastien Lecornu, will address parliament at 15:00 CEST. Lecornu will seek to bring political stability to France by passing a budget to tackle the nation's heavy deficit.

Meanwhile, in the UK, a rise in unemployment, up to 4.8% in the three months to August, is fuelling concerns about the health of the UK economy.

European stock indexes and US futures are down

Just before midday in Europe, the FTSE 100 in London was down 0.38% at 9,406.64, the CAC 40 in Paris fell 0.76% to 7,874.20, and the DAX in Frankfurt lost 0.87%, coming to 24,176.42.

Just after midday, the European benchmark STOXX 600 was down 0.71% and the IBEX 35 in Madrid was down 0.2% at 15,511.00.

Across the Atlantic, S&P 500 futures were down 0.94%, while Nasdaq futures fell 1.23%.

The euro and the British pound weakened against the US dollar, while the Japanese yen notched up against the greenback.

Oil prices, meanwhile, tumbled. US benchmark crude fell more than 2% to $58.25, while international benchmark Brent slipped just below $62, losing around 2%.

Gold and silver prices skyrocketed as investors looked to safe-haven assets, with gold prices reaching $4,156.80, up by 0.58%. Silver futures hit a historic high above $52, before slipping to around $50.

Cryptocurrencies are losing ground sharply. Before noon in Europe, the CoinDesk Bitcoin Price Index (XBX) was down by 3.5% at $111,801, and Ethereum lost more than 6.4% as it traded at $4,006.49.

Global markets look ahead to earnings reports

Global market sentiment is clouded by fears of an AI bubble set to burst, as the valuations of tech companies have soared over the past months.

Critics say the US market now looks too expensive after prices rose much faster than corporate profits. Worries about a repeat of the 2000 dot-com bubble are raising the stakes for the upcoming earnings reporting season. JPMorgan Chase, Johnson & Johnson and United Airlines are some of the big names giving financial updates this week.