Welcome to the October 2025 edition of THE TREASURY HUB Banking Markets Bulletin. While inflation and interest rate speculation continue to dominate market attention, recent trends in FX, commodity and equity markets have added further complexity. Interest rate cycles appear to be nearing a turning point, with divergence emerging between major economies.
This month, we provide an update on global market movements and rate expectations, and look at how developments in FX and commodities are influencing sentiment.
- The ECB has cut its Deposit Rate four times in 2025, most recently on June 11th, bringing it to 2.00%
- 3-month Euribor has continued to fall in line with these cuts and currently reflects market expectations of a softer rate environment
- The EUR yield curve has now normalised (upward sloping from 1 year), unlike the UK and US curves, which remain inverted between 1–3 years
- This suggests we may be at or near the bottom of the interest rate cycle in EUR (2025), with UK and US likely to follow in 2026
- Oil prices fell earlier in the year amid recession fears but spiked following military strikes on Iran - prices have since stabilised
- >Gold continues its strong run as investors hedge against long-term risks and questions over continued USD dominance
- US equity markets have recovered from their early-year dip, with continued momentum driven by AI-related optimism
- Both the FTSE and ISEQ are in positive territory YTD
- GBP and USD have both weakened against the euro over the course of 2025
The narrative in markets now centres not just on the timing of peak rates - which may already have passed in Europe - but on how long policy will remain restrictive in the face of persistent deficits, geopolitical risk and evolving growth outlooks. In Ireland labour force participation remains low by international standards, while government spending has far outpaced inflation and population growth. Rising structural costs and heavy reliance on volatile corporate tax receipts point to fiscal challenges that may require difficult policy choices ahead.
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- The Treasury Hub Markets Bulletin - October 2025 Review and be downloaded here .
Author
Jennifer Brennan – please link to Jennifer’s profile on the website. It should display same as this article: https://www.rbk.ie/about/our-team/jennifer-brennan
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