**Global Capital Market Review**: This week (October 24–31, 2025), the Federal Reserve cut the federal funds rate by 25 basis points to 3.75%–4.00%, marking its fifth rate cut since September 2024. However, the committee displayed divergent views on December’s policy direction. Fed Chair Powell suggested that data gaps might justify a pause in rate adjustments. Amid hawkish expectations, the dollar strengthened, Treasury yields rose, and European and Hong Kong equities—beneficiaries of a weaker dollar—declined sharply. 1) **Fixed Income**: The 10Y U.S. Treasury yield surged 9bps to 4.11%, while the dollar index rose 0.80% to 99.7, nearing 100. 2) **Equities**: European and Hong Kong markets fell significantly, while Japan’s Nikkei 225 (USD terms) gained 5.43% on Trump’s visit and the U.S.-Japan investment framework. 3) **Commodities**: Gold dropped 3.08%, and crude oil declined 1.32%.

**Global Fund Flows**: As of October 29, 2025, foreign inflows into Chinese equities offset domestic outflows. Overseas active funds added $79 million, while passive funds saw $1.29 billion inflows. Globally, money market and developed equities attracted capital, with U.S. fixed-income funds drawing $10.39 billion. U.S. and Japanese equity funds saw inflows of $5.79 billion and $6.08 billion, respectively. Sector-wise, U.S. tech, industrials, and utilities gained, while Chinese tech, healthcare, and communications led inflows.

**Asset Valuation Metrics**: China’s A-share ERP rose notably. As of October 31, the Shanghai Composite’s P/E ranked below the S&P 500, Germany, France, and South Korea at 86.7% of its 10-year average, though absolute valuations remained lower than U.S. peers. Brazil’s Bovespa, CSI 300, and Shanghai Composite showed higher ERP, indicating relative attractiveness. Risk-adjusted returns improved marginally for the S&P 500 (51% to 58%) and Nasdaq (47% to 55%), while the CSI 300 rose from 75% to 79%.

**Risk Sentiment Indicators**: The S&P 500 closed at 6,840.20, above its 20-day moving average, with implied volatility edging up. Its put/call ratio fell to 1.02 (vs. 1.07 on October 24). In China, CSI 300 call options at 4,650–4,900 saw active positioning, reflecting cautious optimism. Implied volatility dipped, signaling expectations of range-bound trading.

**Economic Data**: - **U.S.**: September existing home sales rose 4.1% YoY, extending a five-month uptrend; M1/M2 growth accelerated. - **China**: Q3 GDP grew 4.8%, on track for the 5% annual target; industrial profits rose 3.2% YoY in September. Fed rate-cut odds for December fell to 63% (from 91.7%), with January 2026 odds at 74.5% (vs. 98.3%). One more 2025 cut remains likely. Key upcoming data: U.S. October PMI, September nonfarm payrolls, and retail sales.

**Risks**: Short-term asset volatility may not reflect long-term trends; deeper-than-expected recessions in Europe/U.S.; major U.S. policy shifts under Trump.