Weekly Brief · week of 19 to 23 October 2026
Author: Yan Chan, capital manager at Axone Capital
· 5 min read
The dollar gave back its annual high, the AI trade cracked and the VIX jumped 21.5%. This week, four inflation prints (Canada, UK, New Zealand, Japan) and Friday's flash PMIs will decide the next move. The summary of the brief, and the full PDF to download.
Dollar turns, AI shakes, inflation decides. Here is the summary of our Weekly Brief for the week of 19 to 23 October 2026. The full brief (12 pages, with charts, the day-by-day calendar and the Elliott wave counts) can be downloaded as a PDF at the bottom of this page.
The context: the dollar's annual high did not hold
A reversal week. A hotter-than-expected US core CPI (+0.34% m/m) pushed the dollar to a new annual high on 14 October, then it gave everything back. The Fed signalled no urgency, AI stocks corrected and volatility woke up.
Two drivers explain the dollar's pullback:
- Less supportive yield spreads: global yields keep easing, and the US 10-year has lost almost 30 bp since its October peak.
- The AI correction threatens the inflows that carried the dollar: $942bn of US equities bought over 12 months, flows that could reverse if AI sentiment sours.
The Fed: hawkish or not?
The data says hawkish: core CPI rose 0.34% m/m for the second month in a row, and economists are raising their core PCE forecasts to 0.3 to 0.4% m/m. But Chair Warsh, Williams and Jefferson signalled no urgency to tighten again. The market picked the Fed: the odds of an end-October hike fell to about 4 bp.
Our verdict: no hike in October. The surprise risk is on the hawkish side: with so little priced, a hot inflation print would force a repricing the market is not positioned for.
Gold rebuilds its uptrend
Falling US yields, a dollar rolling over from its high, a risk-off tilt in equities: the week's mix is gold-friendly. The latest Elliott count from @EWProBot (16 October) reads the summer decline as a completed correction.
- 4,160.8: buy confirmation on 8H
- 4,073.0: soft invalidation
- 3,942.7: hard invalidation, start of wave ((1))
Bias: constructive as long as 4,073 holds, and above all 3,942. A hawkish inflation surprise is the main risk.
Equities and currencies
US indices, the AI trade cracks. After a record in early October, the Bloomberg AI index lost about 6%, mostly in semiconductors and the "neoclouds". The IMF lists an AI correction among the three main risks to financial stability. The question of the week: does the correction spread, or stay contained? The VIX near 20 is the thermometer to watch.
Currencies, a selective dollar pullback (G10 currency strength, week of 12 to 16 October):
- CAD +0.51%, best of the week: the BoC sees upside risks to inflation.
- CHF +0.24%: safe haven in the volatility, despite a 0% SNB rate.
- GBP +0.22%: the BoE is expected to hike in November (3.75% to 4.00%).
- NZD +0.13%, JPY +0.02%, EUR +0.01%: the euro and the yen marked time.
- USD −0.32%: reversal after the annual high.
- AUD −1.13%, worst of the G10 despite the highest rate (4.60%), with AUD/USD back toward 0.6900.
Seasonality turns against the dollar
According to Seasonax, over ten years the Dollar Index tends to rise in September (+0.87%) and October (+0.98%), then fall in November (−0.45%) and December (−0.85%). This year it went from 98.77 (9 September) to 102.58 (12 October), about +3.9%. Seasonality is a tailwind, not a signal.
The week ahead: four inflation prints
The market already prices the consensus. What moves price is the surprise: the gap between the published number and what was expected.
- Monday 19: China Q3 GDP (exp. 4.4%) and Canada CPI (exp. +0.2% m/m).
- Tuesday 20: UK wages and unemployment, German ZEW (exp. 30.2).
- Wednesday 21, the key event: UK CPI (exp. 3.4%, core 2.8%), then Governor Bailey. They will tell whether the November hike is a done deal.
- Thursday 22: New Zealand Q3 CPI (exp. +0.8%), SNB policy discussion summary, US jobless claims.
- Friday 23: Japan core CPI (exp. 2.1%), flash PMIs in the eurozone, UK and US, Michigan inflation expectations.
The brief also includes the surprise map (what each currency does if a print comes in hotter or softer) and the Elliott counts on gold, EUR/USD, GBP/USD, USD/CAD, USD/CHF, AUD/USD and USD/JPY.
The two scenarios
- Hawkish surprise: stronger USD, gold under pressure toward 4,073, higher yields and more stress on tech.
- Dovish surprise: weaker USD, gold extends above 4,160, relief for the Nasdaq, and EUR/USD and GBP/USD follow the bullish counts.
Don't guess. Read the price, and trade the surprise.
Educational content, not investment advice. Sources of the brief: Rapport Macro Weekly (12 to 16 October 2026), Seasonax, Yahoo Finance, Elliott Wave Pro (@EWProBot) charts of 16 October 2026.