<ul><li><a href="/commodities/baker-hughes-us-oil-rig-count-rises-1-to-460-total-rigs-unchanged-at-603" rel="follow">Baker Hughes US oil rig count rises 1 to 460. Total rigs unchanged at 603</a></li><li><a href="/news/us-expected-to-remove-50-tariffs-on-some-canadian-products-as-soon-as-today-report" rel="follow">US expected to remove 50% tariffs on some Canadian products as soon as today - report</a></li><li><a href="/news/umich-final-october-final-consumer-sentiment-48-0-vs-46-3-expected" rel="follow">UMich final October final consumer sentiment 48.0 vs 46.3 expected</a></li><li><a href="/news/canada-august-retail-sales-vs-1-3-expected" rel="follow">Canada August retail sales +1.2% vs +1.3% expected</a></li><li><a href="/news/us-s-p-global-flash-october-services-pmi-57-9-vs-58-0-expected" rel="follow">US S&amp;P Global flash October services PMI 57.9 vs 58.0 expected</a></li></ul><p>Markets:</p><ul><li>Gold down $24 to $3999</li><li>WTI crude oil up $4.01 to $103.47</li><li>S&amp;P 500 down 0.5%</li><li>US 10-year yields up 4.6 bps to 5.00%</li><li>AUD leads, CHF lags</li></ul><p>There are heavy cross-currents working their way through markets at the moment. The latest one is the oil market spiking into the weekend, including brent hitting the highest since May at $117. There are growing signs that Trump will escalate versus Iran in an attempt to break the deadlock and shuffle the deck on terrible polls ahead of the midterms. In a rally just before the close he said they may do a "little Epic Fury" and that fits with some reports about a short-term bombing campaign on nuclear sites and some infrastructure. Markets will be closely watching what happens afte the close and then the focus will turn to potential retaliation from Iran.</p><p>The jump in oil prices lifted Treasury yields and weighed on gold but it wasn't the only focus. The euro continues to be dragged down by protests in France and elsewhere. The market is sniffing out political change and the likelihood of more government spending in order to tamp down on unrest and preserve the status quo.&nbsp;</p><p>Meanwhile, the AI trade remains in flux with the market increasingly focused on where all the money will come from to finance it all. The answer appears to be via equity markets and no one is sure if they can sustain that kind of capital raising. Already, we've seen the bond market shudder so I'm skeptical. Meta fell another 1% after yesterday's 7% decline as it readies itself to launch a new class of shares. Other losers were telco names on signs that Elon Musk will is moving Starlink to earth where he will install cell phone towers, or buy space on existing ones.</p><p>Have a great weekend.</p><p></p> This article was written by Adam Button at investinglive.com.

<p>Trump at a rally says they may do "another operation" against Iran.</p><ul><li>We may do another little Epic Fury</li><li>We'll take care of Cuba on our way back from Iran</li></ul><p>The market is certainly betting that Trump is going to do something in the short term, which is why oil has been so strongly bid in the past two days.</p><p>Meanwhile,&nbsp;The IRGC Navy said in a statement Friday that two supertankers struck naval mines while attempting to cross what it called an unauthorized southern route through the Strait of Hormuz, causing explosions and fires. I'd take that with a grain of salt but we're clearly in a paradigm that can't last.</p><p>Of course, Trump said recently there would be no attacks before the midterms but I don't imagine his credibility is too high on that front.&nbsp;</p><p>What's a bit of a giveaway is that a "little Epic Fury" is what's been rumored, including some strikes on missiles sites, Pickaxe moutain, and infrastructure. There are even signs it's been telegrahed. I ultimately think this could be an attempt at a face-saving move from Trump. Afterwards, he could declare victory again and maybe there's a deal to be made to open Hormuz.</p><p>Of course, there are two parties at war and it all depends on what Iran wants next. They have hinted at massive retaliation but they're just as prone to exaggeration as Trump. Where I'm optimistic is on the signs that Trump has told everyone already that this is coming, including the Russians who were said to evacuate today. So by Monday this could be wrapped up and oil prices could be headed back lower.</p><p>For now though, the market is entirely pricing in the escalation with WTI up $4.21 to $103.74 and brent at the highest since May at $117.27.</p> This article was written by Adam Button at investinglive.com.

<p dir="ltr">Election season is doing what trade negotiators couldn’t.</p><p dir="ltr">The Wall Street Journal <a href="https://www.wsj.com/politics/policy/trump-expected-to-remove-some-tariffs-on-canada-in-bid-to-help-susan-collins-6a89ed1d?mod=hp_lead_pos1" rel="follow">reports </a>the US is preparing to lift 50% tariffs on some Canadian agricultural and forestry products, with a proclamation possibly coming as soon as today. The motivation is political: Maine Sen. Susan Collins has been lobbying for relief and is in a dead heat with Democrat Troy Jackson with less than two weeks to go until Election Day.</p><p dir="ltr">Unfortunately, there is no real sign of a political thaw here as Trump could also raise other tariffs. USD/CAD is dow n18 pips to 1.3990 today and unmoved on this report.</p><p dir="ltr">The details:</p><ul dir="ltr"><li>Scope and timing could still change, according to the WSJ’s sources</li><li>The cuts may be offset by higher tariffs on other Canadian goods</li><li>The White House says any announcement will come from the administration and calls the reports speculation</li><li>USTR declined to comment</li></ul><p dir="ltr">This would be the second adjustment to the 50% tariffs. Last month, Washington exempted road salt and cement and added other products to keep the affected total at about $20 billion, or roughly 5% of Canadian exports to the US. Collins took credit for that change on the campaign trail. Jackson’s reply in their debate was that Mainers “can’t eat road salt.” Food and lumber are a different matter.</p><p dir="ltr">The politics go well beyond Maine. In Michigan, GOP Senate nominee Mike Rogers is now running ads urging Trump to end the trade war with Canada after spending months backing it. In New Hampshire, John Sununu has also criticized the Canada tariffs. </p><p dir="ltr">For background, Trump imposed the 50% levies in late August after last-minute talks broke down. He used Section 338 of the Tariff Act of 1930, the Smoot-Hawley provision, which had never been used before. Canada retaliated, Trump responded with import bans on some Canadian products, and he has threatened to double tariffs on Canadian autos in January if there’s no deal. A New Jersey food importer filed suit this week arguing Section 338 goes beyond the administration’s authority.</p><p dir="ltr">Again, I don't see this as a thaw. It’s a swap and the dollar value covered stays around $20 billion and the headline effect for Canada is mostly reshuffling. At the same time, if he wanted real political gains for Republicans before the midterms, he could drop the tariffs altogether and make a deal.</p><p dir="ltr">Update: The announcement came from Collins, who noted several products: blueberry, potoatos, apple and seaweed among them.</p> This article was written by Adam Button at investinglive.com.

<ul><li>Prior was 46.3</li><li>Prelim was 48.1</li><li>Current conditions 46.7 vs 50.9 prior</li><li>Expectations 48.4 vs 46.3 prior</li><li>1-year inflation 4.7% vs 4.7% prior</li><li>5 -year inflation 3.5% vs 3.5% prior</li></ul><p>This indicator is near all-time lows but in the last number of years it's morphed into more of a political indicator than a spending one. The Fed still watches the inflation numbers though.</p><p dir="ltr">The University of Michigan’s Surveys of Consumers produces one of the oldest and most widely followed gauges of US household sentiment. Results come out twice a month, both at 10 am ET: a preliminary reading around mid-month and a final reading near the end of the month that incorporates the full sample. Revisions between the two are usually modest, but they occasionally shift the picture, particularly on inflation expectations.</p><p dir="ltr">The headline Index of Consumer Sentiment is built from questions about personal finances, business conditions and buying conditions for big-ticket items. It’s indexed to 100 in early 1966. The survey splits into two sub-indexes, current economic conditions and consumer expectations, with the expectations measure feeding into the Conference Board’s Leading Economic Index.</p><p dir="ltr">The inflation expectations figures are often the most market-relevant part of the report. Respondents estimate price changes over the next year and over the next five to 10 years. The Federal Reserve watches the longer-run measure closely as a gauge of whether inflation expectations are becoming unanchored, and a jump in either can move Treasury yields and rate pricing.</p><p dir="ltr">The survey moved from telephone interviews to an online format in 2024, which has made comparisons with older data trickier. Readings have also become increasingly split along partisan lines, with sentiment swinging depending on which party holds the White House. Both factors have led some economists to discount the survey’s signal.</p><p dir="ltr">Sentiment data don’t always line up with actual spending, and consumers who say they’re gloomy often keep spending. Still, the report offers a timely read on how households are processing inflation, tariffs, the job market and stock prices. The Conference Board’s consumer confidence index, released later in the month, tends to place more weight on labor market conditions.</p> This article was written by Adam Button at investinglive.com.

<ul><li>Prior was 59.8</li><li>Manufacturing 56.0 vs 55.5 expected</li><li>Prior manufacturing 57.0</li><li>Composite 57.6 vs 58.4 prior</li><li>selling prices rose at the sharpest rate since August 2022</li><li>New orders&nbsp;highest in over four-and-a-half years</li><li>Business output expectations for the 12 months ahead cooled compared to September but were still the second highest seen this year</li></ul><p>One of the big surprises last month -- and one that the market took as a hawkish signal at time time -- was the jump in this survey. Employment was at the strongest since June 2022 and input cost inflation at the highest since Oct 2022.</p><p></p><p>Chris Williamson, Chief Business Economist at S&amp;P Global Market Intelligence: </p><blockquote>“October’s flash PMI data indicate that the US economy continues to boom at the start of the fourth quarter. The output readings from the survey are consistent with GDP growing at a 5% annualized rate after a 4% expansion was signalled for the third quarter. Especially healthy corporate earnings and profits are also indicated, and hiring has surged as companies seek to boost capacity to fulfil stronger customer demand. </blockquote><blockquote>“If the reopening of the economy after COVID is excluded, recent months have seen the best growth spell for US businesses since early 2015.</blockquote><blockquote> “However, cost pressures remain a key concern, notably as the renewed surge in oil prices reverberates through to impact a wide variety of goods and services. Supply chain bottlenecks have meanwhile intensified, and order book backlogs are growing, making it easier for companies to pass higher costs on to customers. The result is the sharpest increase in selling prices for over four years to a pace that indicates consumer price inflation is likely to rise further above the Fed’s target in the coming months.”</blockquote><p dir="ltr">If the Fed took this report seriously, they would be hiking next week. In theory, it's a good forward-looking indicator at the front edge of leading indicators but in practice, it's been mediocre at predicting economic momentum in the post-covid period.</p><p dir="ltr"></p><p dir="ltr">For background, the S&amp;P Global publishes flash estimates of its US Purchasing Managers’ Indexes for manufacturing and services each month at 9:45 am ET, usually about a week before the month ends. The flash readings are based on roughly 85% of survey responses, making them one of the earliest snapshots of US business conditions. Final figures follow in the first days of the next month and rarely differ much from the flash.</p><p dir="ltr">The indexes are diffusion measures built from surveys of purchasing managers at private-sector companies. A reading above 50 indicates expansion from the prior month and below 50 signals contraction. The manufacturing PMI is a composite of five sub-indexes: new orders, output, employment, suppliers’ delivery times and stocks of purchases. The services headline is the business activity index, based on a single question about activity levels. The two feed into a composite output index, which gives a broad read on private-sector growth.</p><p dir="ltr">The sub-indexes are often more revealing than the headlines. Input prices and output prices, or prices charged, offer an early gauge of cost pressures and how much firms are passing them on to customers, which makes them closely watched for inflation signals. Employment, new orders, export orders and business expectations add detail on demand and hiring.</p><p dir="ltr">The S&amp;P Global PMIs tend to move markets less than the ISM surveys, which have a longer history and a larger following, though the two sometimes diverge. Their main advantage is timing and comparability. Flash PMIs for the eurozone, UK, Japan, Australia and India land the same day, giving traders a synchronized look at the global economy and letting them judge US momentum against other major economies.</p> This article was written by Adam Button at investinglive.com.

<ul><li>The advance August reading was +1.3%</li><li><a href="https://investinglive.com/news/canada-retail-sales-for-the-month-of-july-0-7-vs-0-8-estimate/" rel="follow">Prior </a>was -0.7%</li><li>Sales up in all 9 subsectors, led by motor vehicles</li><li>Ex-autos +1.2% vs +1.0% expected</li><li>Prior ex-autos was -0.7%</li><li>September advance sales +0.7%</li></ul><p>The advance (or flash) reading is the real market mover in this report now as it generally corresponds with the final reading. The +0.7% m/m number for September is a good sign of ongoing strength.</p><p>RBC last week was out with its cardholder spending data for September and that's usually a good cross-check and precursor to the official report. It <a href="https://www.rbc.com/en/economics/canadian-analysis/rbc-consumer-spending-tracker/canadians-keep-spending-through-higher-oil-prices-but-momentum-eased-in-september/" rel="follow">showed </a>core sales up 0.5% m/m on strong discretionary categories.</p><p>With that, the market should feel increasingly comfortable that the Bank of Canada will hike rates next week, as is priced at just under 80%. What's notable though is that Fed pricing has come down quickly so there is an interesting divergence opening up and -- not surprisingly -- USD/CAD is at a one-month low and broke 1.40 today.</p><p>The RBC data showed strong discretionary numbers and that showed up here as well with sales at food and beverage retailers up 1.1%. Furniture and appliances were also strong against a run of dismal housing numbers.</p><p></p><p dir="ltr">For background,&nbsp;Statistics Canada publishes its retail trade report monthly at 8:30 am ET, roughly seven weeks after the reference month ends. The release includes full data for that month plus an advance estimate for the following month, so each report gives markets two readings: a detailed look back and an early flash on the most recent month.</p><p dir="ltr">The headline figure is the monthly change in total retail sales in current dollars. Because car sales and gasoline prices can swing the total sharply, markets focus on core retail sales, which exclude motor vehicle and parts dealers and gasoline stations and fuel vendors. StatCan also reports sales in volume terms, stripping out price changes, which gives a better sense of how much consumers are actually buying. In periods of high inflation, nominal gains can mask flat or falling volumes.</p><p dir="ltr">The report breaks sales down across subsectors, including food and beverage retailers, general merchandise, health and personal care, building materials and garden equipment, clothing and furniture. It also tracks e-commerce sales and provincial results.</p><p dir="ltr">Retail sales are one of the more market-moving Canadian releases after jobs and CPI. A strong or weak print in core sales can shift Bank of Canada rate expectations and move the Canadian dollar, though the advance estimate often matters more than the stale full-month figure. The data also feed into monthly GDP estimates.</p><p dir="ltr">The report covers only goods sold through stores and online, so it misses spending on services such as travel, restaurants and entertainment. That makes it a partial gauge of consumer health. Its importance has grown as tariffs, higher prices and weaker sentiment test how much Canadian households can keep spending.</p> This article was written by Adam Button at investinglive.com.

<p>Headlines:</p><ul><li><a href="/education/falling-treasury-yields-may-be-hiding-a-darker-story-about-the-ai-boom" rel="follow">Falling Treasury yields may be hiding a darker story about the AI boom</a></li><li><a href="/commodities/crude-oil-extends-gains-as-saudi-houthi-conflict-and-concerns-of-us-iran-attacks-keep-the-market-supported" rel="follow">Crude oil extends gains as Saudi-Houthi conflict and concerns of US-Iran attacks keep the market supported</a></li><li><a href="/commodities/gold-gets-caught-in-market-liquidation-despite-falling-real-yields-supporting-higher-prices" rel="follow">Gold gets caught in market liquidation despite falling real yields supporting higher prices</a></li><li><a href="/news/france-october-pmi-slumps-back-into-contraction-as-political-uncertainty-weighs-on-demand" rel="follow">France October PMI slumps back into contraction as political uncertainty weighs on demand</a></li><li><a href="/news/germany-october-flash-manufacturing-pmi-54-2-vs-53-5-expected" rel="follow">Germany October flash manufacturing PMI 54.2 vs 53.5 expected</a></li><li><a href="/news/eurozone-october-pmi-misses-estimates-as-growth-slows-keeping-ecb-rate-hike-dilemma-alive" rel="follow">Eurozone October PMI misses estimates as growth slows, keeping ECB rate hike dilemma alive</a></li><li><a href="/news/uk-october-flash-services-pmi-53-1-vs-51-8-expected" rel="follow">UK October flash services PMI 53.1 vs 51.8 expected</a></li><li><a href="/news/uk-retail-sales-fall-more-than-expected-in-september-complicating-boe-rate-hike-outlook" rel="follow">UK retail sales fall more than expected in September, complicating BOE rate hike outlook</a></li></ul><p>Markets:</p><ul><li>10-year Treasury yields up 5 bps to 5.00%</li><li>USD and CAD lead, CHF lags on the day</li><li>WTI crude oil up 1.6% to $101.07</li><li>Gold up 0.1% to $4,029</li><li>European stocks lower; S&amp;P 500 futures -0.2%</li></ul><p></p><p style="text-align: justify" class="text-align-justify">It was a much calmer session today in Europe as markets are taking a breather ater the more hectic risk-off wave in trading yesterday.</p><p style="text-align: justify" class="text-align-justify">The strong bid in Treasuries looks to abate for now, with 10-year yields bouncing back to the 5% mark. In turn, that is giving the dollar some comfort with EUR/USD easing back towards 1.1200 and USD/JPY pushing closer towards the 157.00 mark on the day.</p><p style="text-align: justify" class="text-align-justify">And this is coming despite oil prices pushing higher once again. Brent crude briefly touched $115 earlier in the day while WTI crude is up over 1% to around $111 currently, as worries surrounding the Middle East conflict and geopolitical tensions continue to persist. That is keeping inflation concerns in the picture as investors sit on edge on how that will continue to feed into borrowing costs and the outlook for major central banks.</p><p style="text-align: justify" class="text-align-justify">In Europe, we did get a slew of PMI data today which painted a more mixed picture. The growth momentum has slowed, largely thanks to France, while price pressures are still keeping up as we get into the final quarter of the year. While that might not change the equation for the ECB next week, it still means December is a toss up for now.</p><p style="text-align: justify" class="text-align-justify">Regional equities continue to be pinned down by France's fiscal worries, with the overall risk mood still rather dour as the selloff from yesterday carries over. US futures are reflecting the same picture with S&amp;P 500 futures down 0.2% and Nasdaq futures down 0.1%.</p><p style="text-align: justify" class="text-align-justify">In other markets, gold is at least bouncing back a little after briefly testing waters below $4,000 for the first time in three months earlier today. It's still a poor week for the precious metal, poised to end over 3% lower despite having seen Treasury yields fall as well during the week.</p><p></p> This article was written by Justin Low at investinglive.com.

<ul><li>Eurozone October flash services PMI 51.7 vs 52.5 expected</li><li>Prior 53.0</li><li>Eurozone October flash manufacturing PMI 52.4 vs 52.7 expected</li><li>Prior 52.9</li><li>Eurozone October flash composite PMI 51.9 vs 52.7 expected</li><li>Prior 53.1</li></ul><p style="text-align: justify" class="text-align-justify">After the softer prints from France and Germany, the weaker-than-expected results for the overall euro area are not all too surprising. But at least for now, business activity continues to grow with both output and new orders increasing for the fourth successive month in October, albeit at the slowest pace during this sequence.</p><p style="text-align: justify" class="text-align-justify">A key drag on growth was a renewed drop in business activity in the French services sector. But there were also signs of weakness elsewhere in the region as growth also edged lower in the rest of the euro area for both the manufacturing and services sectors.</p><p style="text-align: justify" class="text-align-justify">Looking to prices, manufacturers reported a sharp and accelerated increase in input prices in October amid higher energy costs mostly.&nbsp;The latest rise was the steepest since May and above the average for the year-to-date. However,&nbsp;the rate of output price inflation slowed in October at least with both Germany and France posting weaker increases in selling prices than in September. As for the rest of the euro area, they saw the rate of inflation accelerate as a whole.</p><p style="text-align: justify" class="text-align-justify">Overall, the data pretty much underscores that higher interest rates are also starting to take a toll and dampening demand. But the picture of&nbsp;sustained growth and more stubborn inflation pressures will likely add to speculation of more aggressive policy tightening from the ECB down the road.</p><p style="text-align: justify" class="text-align-justify"></p> This article was written by Justin Low at investinglive.com.

<ul><li>France October flash services PMI 48.4 vs 50.7 expected</li><li>Prior 51.2</li><li>France October flash manufacturing PMI 49.3 vs 50.5 expected</li><li>Prior 50.6</li><li>France October flash composite PMI 48.4 vs 50.5 expected</li><li>Prior 51.1</li></ul><p style="text-align: justify" class="text-align-justify">That's not a good sign as the French private sector falls back into contraction in October, amid political and financial concerns.&nbsp;Weighing on activity levels was the sharpest decline in demand for French goods and services since May, which surveyed businesses attributed to heightened uncertainty and economic pressures.</p><p style="text-align: justify" class="text-align-justify">The only good news perhaps for the ECB is that&nbsp;the survey's price gauges decreased from September to signal an easing of input cost and output charge inflation rates.</p><p style="text-align: justify" class="text-align-justify">Looking at the breakdown, manufacturers and service providers reported steeper declines in demand amid reports of projects being postponed as customers held back on decision making. Meanwhile,&nbsp;French businesses turned pessimistic towards one-year outlook with the future composite index falling&nbsp;to its lowest level since April 2020. That indicates&nbsp;negative corporate sentiment for the first time in close to two years. The more downbeat expectations were often linked to next year's election period, with some companies also expressing concerns regarding public finances.</p><p style="text-align: justify" class="text-align-justify">On prices, data at the composite level signalled an easing of inflation across France in October. The service sector was the main driver, with slower rates of input cost and output charge inflation offsetting sharper price pressures for manufacturers.</p><p style="text-align: justify" class="text-align-justify">Overall, the report today does at least put economic expectations and inflation pressures in sync. Both are coming in a little softer and may tone down ECB rate hike expectations. But again, this is only France - who is already facing up against big troubles from a fiscal and economic standpoint. We still have to see how the PMI numbers play out with Germany and the rest of the euro area for better confirmation.</p><p></p> This article was written by Justin Low at investinglive.com.

<ul style="box-sizing: inherit; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-variant-numeric: inherit; font-variant-east-asian: inherit; font-variant-alternates: inherit; font-variant-position: inherit; font-weight: 400; font-stretch: inherit; line-height: inherit; font-size-adjust: inherit; font-kerning: inherit; font-feature-settings: inherit; font-language-override: inherit; vertical-align: baseline; border: 0; margin: 0 0 20px; padding: 0 0 0 19px; font-family: Inter, InterFallback, serif; list-style: outside; text-indent: -3px; color: rgba(0, 0, 0, 1); letter-spacing: normal; orphans: 2; text-transform: none; widows: 2; word-spacing: 0; white-space: normal; background-color: rgba(255, 255, 255, 1); text-decoration-style: initial; text-decoration-color: initial; font-size: 16px"><li style="box-sizing: inherit; font-size-adjust: inherit; font-kerning: inherit; font-feature-settings: inherit; font-language-override: inherit; vertical-align: baseline; border: 0; margin: 0 0 4px; padding: 0">Prior 52.1</li><li style="box-sizing: inherit; font-size-adjust: inherit; font-kerning: inherit; font-feature-settings: inherit; font-language-override: inherit; vertical-align: baseline; border: 0; margin: 0 0 4px; padding: 0">Manufacturing PMI 52.8 vs 51.7 expected</li><li style="box-sizing: inherit; font-size-adjust: inherit; font-kerning: inherit; font-feature-settings: inherit; font-language-override: inherit; vertical-align: baseline; border: 0; margin: 0 0 4px; padding: 0">Prior 51.9</li><li style="box-sizing: inherit; font-size-adjust: inherit; font-kerning: inherit; font-feature-settings: inherit; font-language-override: inherit; vertical-align: baseline; border: 0; margin: 0 0 4px; padding: 0">Composite PMI 53.1 vs 51.8 expected</li><li style="box-sizing: inherit; font-size-adjust: inherit; font-kerning: inherit; font-feature-settings: inherit; font-language-override: inherit; vertical-align: baseline; border: 0; margin: 0 0 4px; padding: 0">Prior 52.0</li></ul><p style="box-sizing: inherit; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-variant-numeric: inherit; font-variant-east-asian: inherit; font-variant-alternates: inherit; font-variant-position: inherit; font-weight: 400; font-stretch: inherit; line-height: 22px; font-size-adjust: inherit; font-kerning: inherit; font-feature-settings: inherit; font-language-override: inherit; vertical-align: baseline; border: 0; margin: 0 0 20px; padding: 0; font-family: Inter, InterFallback, serif; transition: 0.3s; color: rgba(0, 0, 0, 1); letter-spacing: normal; orphans: 2; text-indent: 0; text-transform: none; widows: 2; word-spacing: 0; white-space: normal; background-color: rgba(255, 255, 255, 1); text-decoration-style: initial; text-decoration-color: initial; font-size: 16px">Key findings:</p><p style="box-sizing: inherit; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-variant-numeric: inherit; font-variant-east-asian: inherit; font-variant-alternates: inherit; font-variant-position: inherit; font-weight: 400; font-stretch: inherit; line-height: 22px; font-size-adjust: inherit; font-kerning: inherit; font-feature-settings: inherit; font-language-override: inherit; vertical-align: baseline; border: 0; margin: 0 0 20px; padding: 0; font-family: Inter, InterFallback, serif; transition: 0.3s; color: rgba(0, 0, 0, 1); letter-spacing: normal; orphans: 2; text-indent: 0; text-transform: none; widows: 2; word-spacing: 0; white-space: normal; background-color: rgba(255, 255, 255, 1); text-decoration-style: initial; text-decoration-color: initial; font-size: 16px">Business activity growth accelerates to its fastest since February, helped by rebound in new orders </p><p style="box-sizing: inherit; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-variant-numeric: inherit; font-variant-east-asian: inherit; font-variant-alternates: inherit; font-variant-position: inherit; font-weight: 400; font-stretch: inherit; line-height: 22px; font-size-adjust: inherit; font-kerning: inherit; font-feature-settings: inherit; font-language-override: inherit; vertical-align: baseline; border: 0; margin: 0 0 20px; padding: 0; font-family: Inter, InterFallback, serif; transition: 0.3s; color: rgba(0, 0, 0, 1); letter-spacing: normal; orphans: 2; text-indent: 0; text-transform: none; widows: 2; word-spacing: 0; white-space: normal; background-color: rgba(255, 255, 255, 1); text-decoration-style: initial; text-decoration-color: initial; font-size: 16px">Comment:</p><p style="box-sizing: inherit; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-variant-numeric: inherit; font-variant-east-asian: inherit; font-variant-alternates: inherit; font-variant-position: inherit; font-weight: 400; font-stretch: inherit; line-height: 22px; font-size-adjust: inherit; font-kerning: inherit; font-feature-settings: inherit; font-language-override: inherit; vertical-align: baseline; border: 0; margin: 0 0 20px; padding: 0; font-family: Inter, InterFallback, serif; transition: 0.3s; color: rgba(0, 0, 0, 1); letter-spacing: normal; orphans: 2; text-indent: 0; text-transform: none; widows: 2; word-spacing: 0; white-space: normal; background-color: rgba(255, 255, 255, 1); text-decoration-style: initial; text-decoration-color: initial; font-size: 16px">Chris Williamson, Chief Business Economist at S&amp;P Global Market Intelligence:</p><p style="box-sizing: inherit; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-variant-numeric: inherit; font-variant-east-asian: inherit; font-variant-alternates: inherit; font-variant-position: inherit; font-weight: 400; font-stretch: inherit; line-height: 22px; font-size-adjust: inherit; font-kerning: inherit; font-feature-settings: inherit; font-language-override: inherit; vertical-align: baseline; border: 0; margin: 0 0 20px; padding: 0; font-family: Inter, InterFallback, serif; transition: 0.3s; color: rgba(0, 0, 0, 1); letter-spacing: normal; orphans: 2; text-indent: 0; text-transform: none; widows: 2; word-spacing: 0; white-space: normal; background-color: rgba(255, 255, 255, 1); text-decoration-style: initial; text-decoration-color: initial; font-size: 16px">“The UK economy has picked up momentum in October, with early PMI data indicating the strongest rate of growth since February. This encouraging sign of economic resilience is underscored by firms taking on additional workers for the first time since hiring was hit by the 2024 Autumn Budget. </p><p style="box-sizing: inherit; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-variant-numeric: inherit; font-variant-east-asian: inherit; font-variant-alternates: inherit; font-variant-position: inherit; font-weight: 400; font-stretch: inherit; line-height: 22px; font-size-adjust: inherit; font-kerning: inherit; font-feature-settings: inherit; font-language-override: inherit; vertical-align: baseline; border: 0; margin: 0 0 20px; padding: 0; font-family: Inter, InterFallback, serif; transition: 0.3s; color: rgba(0, 0, 0, 1); letter-spacing: normal; orphans: 2; text-indent: 0; text-transform: none; widows: 2; word-spacing: 0; white-space: normal; background-color: rgba(255, 255, 255, 1); text-decoration-style: initial; text-decoration-color: initial; font-size: 16px">"There are reports of paused spending due to a lack of clarity on domestic economic policy in the run up to the Budget, meaning the promising economic picture from the latest PMIs should provide an encouraging base for further robust economic growth through the winter months, barring any adverse surprises to businesses in the tax and spending review. </p><p style="box-sizing: inherit; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-variant-numeric: inherit; font-variant-east-asian: inherit; font-variant-alternates: inherit; font-variant-position: inherit; font-weight: 400; font-stretch: inherit; line-height: 22px; font-size-adjust: inherit; font-kerning: inherit; font-feature-settings: inherit; font-language-override: inherit; vertical-align: baseline; border: 0; margin: 0 0 20px; padding: 0; font-family: Inter, InterFallback, serif; transition: 0.3s; color: rgba(0, 0, 0, 1); letter-spacing: normal; orphans: 2; text-indent: 0; text-transform: none; widows: 2; word-spacing: 0; white-space: normal; background-color: rgba(255, 255, 255, 1); text-decoration-style: initial; text-decoration-color: initial; font-size: 16px">"Geopolitics, and notably the potential for conflicts in the Middle East and Ukraine to add to energy market volatility, are, however, clearly still unsettling many businesses, and cost of living concerns and broader fiscal worries are being compounded by the shift to higher borrowing costs. </p><p style="box-sizing: inherit; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-variant-numeric: inherit; font-variant-east-asian: inherit; font-variant-alternates: inherit; font-variant-position: inherit; font-weight: 400; font-stretch: inherit; line-height: 22px; font-size-adjust: inherit; font-kerning: inherit; font-feature-settings: inherit; font-language-override: inherit; vertical-align: baseline; border: 0; margin: 0 0 20px; padding: 0; font-family: Inter, InterFallback, serif; transition: 0.3s; color: rgba(0, 0, 0, 1); letter-spacing: normal; orphans: 2; text-indent: 0; text-transform: none; widows: 2; word-spacing: 0; white-space: normal; background-color: rgba(255, 255, 255, 1); text-decoration-style: initial; text-decoration-color: initial; font-size: 16px">"Price pressures remain worryingly elevated, not only making a rate hike from the Bank of England at its upcoming policy meeting a near certainty but also likely shortening the odds of further rate hikes into 2027.”</p><p style="box-sizing: inherit; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-variant-numeric: inherit; font-variant-east-asian: inherit; font-variant-alternates: inherit; font-variant-position: inherit; font-weight: 400; font-stretch: inherit; line-height: 22px; font-size-adjust: inherit; font-kerning: inherit; font-feature-settings: inherit; font-language-override: inherit; vertical-align: baseline; border: 0; margin: 0 0 20px; padding: 0; font-family: Inter, InterFallback, serif; transition: 0.3s; color: rgba(0, 0, 0, 1); letter-spacing: normal; orphans: 2; text-indent: 0; text-transform: none; widows: 2; word-spacing: 0; white-space: normal; background-color: rgba(255, 255, 255, 1); text-decoration-style: initial; text-decoration-color: initial; font-size: 16px"></p><p>The UK economy showed renewed strength in October, with the Composite PMI rising to 53.1 from 52.0 in September, its highest level since February. Business activity accelerated across both manufacturing and services, while new orders expanded at the fastest pace in 25 months and employment returned to growth for the first time since September 2024. </p><p>This contrasts with the loss of momentum across the eurozone. The divergence in economic performance has been&nbsp;supporting the british pound&nbsp;against the euro, with EUR/GBP extending the&nbsp;decline after the positive UK PMIs.</p><p>Chart: EUR/GBP - 4 hour timeframe</p><p></p><p>The data also reinforces&nbsp;expectations for BoE rate hikes as the central bank will have to lean against the inflationary pressures.&nbsp;Input cost inflation accelerated to its strongest pace since June, driven largely by higher energy prices. Although prices charged by businesses increased at a slightly slower pace, the resilient economic&nbsp;activity, stronger new orders and renewed employment growth gives the BoE less room to be patient and look through the shock. </p> This article was written by Giuseppe Dellamotta at investinglive.com.

<ul style="box-sizing: inherit; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-variant-numeric: inherit; font-variant-east-asian: inherit; font-variant-alternates: inherit; font-variant-position: inherit; font-weight: 400; font-stretch: inherit; line-height: inherit; font-size-adjust: inherit; font-kerning: inherit; font-feature-settings: inherit; font-language-override: inherit; vertical-align: baseline; border: 0; margin: 0 0 20px; padding: 0 0 0 19px; font-family: Inter, InterFallback, serif; list-style: outside; text-indent: -3px; color: rgba(0, 0, 0, 1); letter-spacing: normal; orphans: 2; text-transform: none; widows: 2; word-spacing: 0; white-space: normal; background-color: rgba(255, 255, 255, 1); text-decoration-style: initial; text-decoration-color: initial; font-size: 16px"><li style="box-sizing: inherit; font-size-adjust: inherit; font-kerning: inherit; font-feature-settings: inherit; font-language-override: inherit; vertical-align: baseline; border: 0; margin: 0 0 4px; padding: 0">Prior 53.9</li><li style="box-sizing: inherit; font-size-adjust: inherit; font-kerning: inherit; font-feature-settings: inherit; font-language-override: inherit; vertical-align: baseline; border: 0; margin: 0 0 4px; padding: 0">Services PMI 51.7 vs 52.5 expected</li><li style="box-sizing: inherit; font-size-adjust: inherit; font-kerning: inherit; font-feature-settings: inherit; font-language-override: inherit; vertical-align: baseline; border: 0; margin: 0 0 4px; padding: 0">Prior 52.9</li><li style="box-sizing: inherit; font-size-adjust: inherit; font-kerning: inherit; font-feature-settings: inherit; font-language-override: inherit; vertical-align: baseline; border: 0; margin: 0 0 4px; padding: 0">Composite PMI 52.8 vs 53.3 expected</li><li style="box-sizing: inherit; font-size-adjust: inherit; font-kerning: inherit; font-feature-settings: inherit; font-language-override: inherit; vertical-align: baseline; border: 0; margin: 0 0 4px; padding: 0">Prior 53.8</li></ul><p style="box-sizing: inherit; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-variant-numeric: inherit; font-variant-east-asian: inherit; font-variant-alternates: inherit; font-variant-position: inherit; font-weight: 400; font-stretch: inherit; line-height: 22px; font-size-adjust: inherit; font-kerning: inherit; font-feature-settings: inherit; font-language-override: inherit; vertical-align: baseline; border: 0; margin: 0 0 20px; padding: 0; font-family: Inter, InterFallback, serif; transition: 0.3s; color: rgba(0, 0, 0, 1); letter-spacing: normal; orphans: 2; text-indent: 0; text-transform: none; widows: 2; word-spacing: 0; white-space: normal; background-color: rgba(255, 255, 255, 1); text-decoration-style: initial; text-decoration-color: initial; font-size: 16px">Key findings:&nbsp;</p><p>Economic activity softens in October</p><p style="box-sizing: inherit; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-variant-numeric: inherit; font-variant-east-asian: inherit; font-variant-alternates: inherit; font-variant-position: inherit; font-weight: 400; font-stretch: inherit; line-height: 22px; font-size-adjust: inherit; font-kerning: inherit; font-feature-settings: inherit; font-language-override: inherit; vertical-align: baseline; border: 0; margin: 0 0 20px; padding: 0; font-family: Inter, InterFallback, serif; transition: 0.3s; color: rgba(0, 0, 0, 1); letter-spacing: normal; orphans: 2; text-indent: 0; text-transform: none; widows: 2; word-spacing: 0; white-space: normal; background-color: rgba(255, 255, 255, 1); text-decoration-style: initial; text-decoration-color: initial; font-size: 16px">Comment:</p><p style="box-sizing: inherit; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-variant-numeric: inherit; font-variant-east-asian: inherit; font-variant-alternates: inherit; font-variant-position: inherit; font-weight: 400; font-stretch: inherit; line-height: 22px; font-size-adjust: inherit; font-kerning: inherit; font-feature-settings: inherit; font-language-override: inherit; vertical-align: baseline; border: 0; margin: 0 0 20px; padding: 0; font-family: Inter, InterFallback, serif; transition: 0.3s; color: rgba(0, 0, 0, 1); letter-spacing: normal; orphans: 2; text-indent: 0; text-transform: none; widows: 2; word-spacing: 0; white-space: normal; background-color: rgba(255, 255, 255, 1); text-decoration-style: initial; text-decoration-color: initial; font-size: 16px">Phil Smith, Economics Associate Director at S&amp;P Global Market Intelligence: </p><p style="box-sizing: inherit; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-variant-numeric: inherit; font-variant-east-asian: inherit; font-variant-alternates: inherit; font-variant-position: inherit; font-weight: 400; font-stretch: inherit; line-height: 22px; font-size-adjust: inherit; font-kerning: inherit; font-feature-settings: inherit; font-language-override: inherit; vertical-align: baseline; border: 0; margin: 0 0 20px; padding: 0; font-family: Inter, InterFallback, serif; transition: 0.3s; color: rgba(0, 0, 0, 1); letter-spacing: normal; orphans: 2; text-indent: 0; text-transform: none; widows: 2; word-spacing: 0; white-space: normal; background-color: rgba(255, 255, 255, 1); text-decoration-style: initial; text-decoration-color: initial; font-size: 16px">"October's flash PMI results encouragingly showed a sustained upturn in business activity across Germany, although a slowdown in growth underscored that the recovery in the eurozone's largest economy remains fragile. Inflows of new work rose only modestly and at the slowest rate for three months at the start of the fourth quarter, with a stalling of new business growth in the service sector highlighting the ongoing headwinds to demand from elevated inflation and uncertainty. </p><p style="box-sizing: inherit; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-variant-numeric: inherit; font-variant-east-asian: inherit; font-variant-alternates: inherit; font-variant-position: inherit; font-weight: 400; font-stretch: inherit; line-height: 22px; font-size-adjust: inherit; font-kerning: inherit; font-feature-settings: inherit; font-language-override: inherit; vertical-align: baseline; border: 0; margin: 0 0 20px; padding: 0; font-family: Inter, InterFallback, serif; transition: 0.3s; color: rgba(0, 0, 0, 1); letter-spacing: normal; orphans: 2; text-indent: 0; text-transform: none; widows: 2; word-spacing: 0; white-space: normal; background-color: rgba(255, 255, 255, 1); text-decoration-style: initial; text-decoration-color: initial; font-size: 16px"> "Labour market conditions continue to show a very gradual improvement, reflecting a steady but modest pace of job creation among services providers alongside an increasingly stable picture in the manufacturing sector. </p><p style="box-sizing: inherit; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-variant-numeric: inherit; font-variant-east-asian: inherit; font-variant-alternates: inherit; font-variant-position: inherit; font-weight: 400; font-stretch: inherit; line-height: 22px; font-size-adjust: inherit; font-kerning: inherit; font-feature-settings: inherit; font-language-override: inherit; vertical-align: baseline; border: 0; margin: 0 0 20px; padding: 0; font-family: Inter, InterFallback, serif; transition: 0.3s; color: rgba(0, 0, 0, 1); letter-spacing: normal; orphans: 2; text-indent: 0; text-transform: none; widows: 2; word-spacing: 0; white-space: normal; background-color: rgba(255, 255, 255, 1); text-decoration-style: initial; text-decoration-color: initial; font-size: 16px">"Whilst goods producers continued to see business conditions improve, aided by sustained growth in export sales and the filtering through of increased defence and infrastructure spending, a renewed surge in cost pressures has dampened expectations across the sector, with the two likely to remain intrinsically linked in the months ahead."</p><p style="box-sizing: inherit; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-variant-numeric: inherit; font-variant-east-asian: inherit; font-variant-alternates: inherit; font-variant-position: inherit; font-weight: 400; font-stretch: inherit; line-height: 22px; font-size-adjust: inherit; font-kerning: inherit; font-feature-settings: inherit; font-language-override: inherit; vertical-align: baseline; border: 0; margin: 0 0 20px; padding: 0; font-family: Inter, InterFallback, serif; transition: 0.3s; color: rgba(0, 0, 0, 1); letter-spacing: normal; orphans: 2; text-indent: 0; text-transform: none; widows: 2; word-spacing: 0; white-space: normal; background-color: rgba(255, 255, 255, 1); text-decoration-style: initial; text-decoration-color: initial; font-size: 16px"></p><p style="box-sizing: inherit; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-variant-numeric: inherit; font-variant-east-asian: inherit; font-variant-alternates: inherit; font-variant-position: inherit; font-weight: 400; font-stretch: inherit; line-height: 22px; font-size-adjust: inherit; font-kerning: inherit; font-feature-settings: inherit; font-language-override: inherit; vertical-align: baseline; border: 0; margin: 0 0 20px; padding: 0; font-family: Inter, InterFallback, serif; transition: 0.3s; color: rgba(0, 0, 0, 1); letter-spacing: normal; orphans: 2; text-indent: 0; text-transform: none; widows: 2; word-spacing: 0; white-space: normal; background-color: rgba(255, 255, 255, 1); text-decoration-style: initial; text-decoration-color: initial; font-size: 16px">The market is being proved right as the PMIs are showing a slowdown in economic activity.&nbsp;Germany’s private sector continued to expand in October, but the pace of economic activity slowed noticeably, with the Composite PMI falling to 52.8 from 53.8 in September. Although the index remained above the 50 threshold separating expansion from contraction, the slowdown was broad-based, with both manufacturing output and services activity losing momentum. New business growth also eased to a three-month low, while demand in the services sector stalled amid delayed customer decisions and tighter client budgets. </p><p>The outlook for the coming months also points to increasing downside risks. Manufacturing firms reported a notable deterioration in business confidence, with expectations falling to their lowest since July as rising oil prices and raw material costs intensified concerns about margins and future activity. Meanwhile, the weakness in services demand and the slowdown in new orders could weigh on output growth if businesses become more cautious about spending and hiring.</p><p>The combination of weaker French and German PMIs led to a dovish repricing for the ECB as expectations for further tightening in light of an economic slowdown are getting challenged.&nbsp;</p> This article was written by Giuseppe Dellamotta at investinglive.com.

<p>EUROPEAN SESSION</p><p>In the European session, we get the Flash PMIs for the major Eurozone economies and the UK. Given the current growth concerns, disappointing PMIs could add to fears that the recent tightening in financial conditions and the elevated energy prices are starting to strangle the economy. This scenario should result in a dovish repricing further out the curve, with traders pricing in 71 bps of tightening for the ECB by the end of 2027 and 112 bps for the BoE.&nbsp;</p><p>Better than expected data could quell growth concerns and trigger some relief rallies, but it wouldn't change the bigger picture as central banks will have to remain hawkish due to inflationary pressures stemming from the Middle East conflicts.</p><p>AMERICAN SESSION</p><p>In the American session, the main highlight will be the releases of the US Flash PMIs, as the Canadian Retail Sales and the final UMich consumer sentiment won't change anything for the market. Everything said about the Eurozone and UK PMIs is valid for the US PMIs too. </p><p>The market has shifted its focus from inflation to growth as the conflicts in the Middle East, elevated energy prices, tigthening financial conditions, hawkish Fed and lower fiscal impulse on a Dems victory at the midterm elections are all bearish drivers. </p><p>Good PMIs could lead to a relief rally on easing growth concerns, but again, they won't change the bigger picture as those negative drivers will remain unchanged.</p><ul></ul> This article was written by Giuseppe Dellamotta at investinglive.com.

<ul><li>UK September retail sales -0.4% vs -0.1% m/m expected</li><li>Prior +0.5; revised to +0.7%</li><li>UK September retail sales +0.8% vs +1.0% y/y expected</li><li>Prior +2.4%; revised to +2.7%</li><li>UK September retail sales (ex autos, fuel) -0.7% vs -0.1% m/m expected</li><li>Prior +0.6%; revised to +0.9%</li><li>UK September retail sales (ex autos, fuel) +0.8% vs +1.5% y/y expected</li><li>Prior +2.7%; revised to +2.9%</li></ul><p style="text-align: justify" class="text-align-justify">UK retail sales disappointed in September, falling by 0.4% on the month and missing expectations of a 0.1% decline. That comes after a stronger revision to the August number, which saw a 0.7% increase. Having said that, the quarterly picture is still holding up reasonably well as retail sales volumes rose by 0.7% in Q3 compared with the previous quarter.</p><p style="text-align: justify" class="text-align-justify">Looking at the details, the weakness was fairly broad. Supermarket sales declined after gains in the previous two months, while non-food store sales volumes fell by 0.4%. Clothing retailers also struggled, with the unusually warm September weather weighing on demand for autumn and winter collections.</p><p style="text-align: justify" class="text-align-justify">However,&nbsp;there are also signs that consumers are becoming more cautious with some retailers pointing to lower footfall and customers cutting back on spending.</p><p style="text-align: justify" class="text-align-justify">Coming into the report,&nbsp;markets have been pricing in roughly 98% odds of a November rate hike, with December sitting closer to 45%. The numbers today will not do much to derail&nbsp;expectations for November, especially after the recent <a href="https://investinglive.com/news/uk-september-cpi-inflation-rises-to-3-5-reinforces-boe-november-rate-hike-expectations/" rel="follow">inflation figures</a>.&nbsp;But they certainly make the argument for another move in December less straightforward, with the pricing there being more or less a coin flip at this stage.</p><p style="text-align: justify" class="text-align-justify">The BOE has a tough balancing act to manage at the moment.&nbsp;Inflation remains stubborn, while the labour market and now consumer spending are offering less reassurance about the strength of the economy.</p><p style="text-align: justify" class="text-align-justify">So for now,&nbsp;November still looks firmly on the table. But beyond that, the retail sales release today gives policymakers another reason to proceed more cautiously.</p><p style="text-align: justify" class="text-align-justify"></p> This article was written by Justin Low at investinglive.com.

<p style="text-align: justify" class="text-align-justify">The UK retail sales release will be one of the main items to watch out for in the economic calendar today,&nbsp;especially after the latest <a href="https://investinglive.com/news/uk-september-cpi-inflation-rises-to-3-5-reinforces-boe-november-rate-hike-expectations/" rel="follow">inflation</a> and <a href="https://investinglive.com/news/uk-unemployment-rate-falls-to-4-7-as-jobs-rebound-keeping-boe-rate-hike-bets-intact/" rel="follow">labour market</a> figures have given the BOE plenty to think about ahead of its November meeting.</p><p style="text-align: justify" class="text-align-justify">For the September report, retail sales are expected to fall by 0.1% on the month, following a 0.5% increase in August. Meanwhile, retail sales are expected to rise by 1.0% annually - a slowdown from 2.4% previously. The numbers might not be all too interesting on the surface, but they will matter to the broader context in shaping the BOE outlook.</p><p style="text-align: justify" class="text-align-justify">UK headline annual inflation climbed to 3.5% in September, with core annual inflation also picking up to 2.8%. That is hardly reassuring for the BOE, especially with policymakers already having to contend with elevated energy prices and the risk of more persistent price pressures.</p><p style="text-align: justify" class="text-align-justify">Meanwhile, the labour market gave us a bit of a surprise earlier this week. The unemployment rate surprisingly fell to 4.7%, while real wage growth nudged slightly higher to 3.7%. The numbers might be affected by data quality issues with the ONS but they reflect a modest bounce in labour market conditions regardless. Having said that, the details are less rosy with job vacancies continuing to decline, suggesting that hiring demand is losing momentum.</p><p style="text-align: justify" class="text-align-justify">And in any case, one report doesn't make a trend. The UK labour market has been showing signs of softness this year and I would be remiss if I didn't point out that fact.</p><p style="text-align: justify" class="text-align-justify">So, it's not to say everything is pointing to one direction for the BOE. The central bank still has a balancing act to manage.</p><p style="text-align: justify" class="text-align-justify">On one hand, more stubborn inflation pressures are&nbsp;making a stronger case for tighter monetary policy. But on the other, a cooling jobs market and weaker consumer spending&nbsp;could raise concerns that the economy is struggling to cope with higher prices and borrowing costs.</p><p style="text-align: justify" class="text-align-justify">So, what can we expect from the retail sales release today?</p><p style="text-align: justify" class="text-align-justify">As things stand, traders are pricing in roughly 98% odds of a rate hike in November. Meanwhile, the probability of another move in December is sitting at around 45%.</p><p style="text-align: justify" class="text-align-justify">Now, I don't think the retail sales numbers today will do much of anything to change the outlook for November - even on any major surprises. Markets are already firmly positioned for the rate hike and policymakers have done little to dissuade traders from that narrative.</p><p style="text-align: justify" class="text-align-justify">But for December? That is where things could get interesting as the odds are more or less a coin flip at this stage.</p><p style="text-align: justify" class="text-align-justify">A stronger-than-expected report would reinforce the argument that consumer demand remains resilient enough for the BOE to keep tightening. On the flip side, a big disappointment could cast further doubt on how much more tightening the economy can withstand at this juncture.</p><p style="text-align: justify" class="text-align-justify">So, that is the more important takeaway when viewing the retail sales release today. It's all about looking to see how this might affect the December outlook or even for next year.</p><p style="text-align: justify" class="text-align-justify"></p> This article was written by Justin Low at investinglive.com.

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Japan’s flash PMI held at 52.3.</li><li>Australia’s flash composite PMI fell into contraction for the first time in five months.</li><li>In company news, OpenAI is reportedly near a $30 billion raise, SK hynix dropped plans for a US Solidigm IPO, and Western Digital posted a sharp revenue jump.</li></ul><p dir="ltr">Equities</p><p dir="ltr">Asian stock markets mostly fell on Friday as a sell-off in US semiconductor shares spread to the region. South Korean markets, which have heavy weightings in chipmakers, led the declines: the tech-focused KOSDAQ fell 3.5% and the benchmark Kospi lost 2.2%. Japan’s Nikkei 225 dropped 1.4% and China’s Shanghai Composite fell 1.3%. Hong Kong’s Hang Seng was the exception, edging up 0.25%.</p><p dir="ltr">The losses followed a sharp fall on Wall Street on Thursday, when the Philadelphia semiconductor index dropped 6.7%, its biggest daily decline since June. The Nasdaq fell more than 2.5% after earnings from major technology companies, including Meta’s spending plans, renewed concerns about returns on AI investment.</p><p dir="ltr">Oil</p><p dir="ltr">Oil prices traded in a narrow range in Asian hours, holding near recent highs. Brent crude closed around $113 a barrel on Thursday, its highest level since early May, after reports that the US and Israel had drawn up plans for renewed strikes on Iran after next month’s US midterm elections.</p><p dir="ltr">Supply concerns in fuel markets also remained in focus. President Donald Trump invoked the Defense Production Act for domestic oil production and refining as high fuel prices weigh on voters ahead of the November 3 elections. Separately, Bloomberg reported that Russia’s Rosneft is deliberately slowing repairs at refineries damaged by repeated Ukrainian drone strikes, which could keep Russian fuel exports constrained.</p><p dir="ltr">Gold</p><p dir="ltr">Gold fell below $4,000 an ounce for the first time since July, though it did not follow through lower in Asian trading. There was no fresh catalyst for the move. The metal has been pressured by elevated bond yields, a firm dollar and expectations of further Federal Reserve tightening tied to high oil prices. It is now roughly a quarter below its January peak of more than $5,400. Longer-term support continues to come from central bank buying and investors seeking diversification.</p><p dir="ltr">FX</p><p dir="ltr">Major currency pairs were range-bound. The yen firmed modestly after Japan’s inflation data. USD/JPY dropped to around 156.25 before recovering back to 157.00.&nbsp;</p><p dir="ltr">Japan</p><p dir="ltr">Japan’s core consumer inflation rose 2.1% in September from a year earlier, matching forecasts and accelerating from 1.7% in August. It was the first reading above the BoJ’s 2% target in nine months. A measure excluding fresh food and fuel, which the central bank watches closely, rose 2.4%, above forecasts of 2.3%. Goods and services inflation both accelerated, despite government fuel subsidies.</p><p dir="ltr">The BoJ is widely expected to keep rates at 1.25% at its meeting ending October 30, though it may raise its inflation forecasts. Many analysts expect a hike to 1.50% in December. Economy Minister Minoru Kiuchi said conditions have not yet been met for the government to declare an end to deflation.</p><p dir="ltr">Japan’s flash composite PMI was unchanged at 52.3 in October. Services activity strengthened, while manufacturing output grew at its slowest pace in seven months. Job creation slowed to a 14-month low, and input cost inflation edged higher.</p><p dir="ltr">Australia</p><p dir="ltr">Australia’s flash composite PMI fell to 47.7 in October from 51.3, signalling the first contraction in private sector output in five months. Services activity declined for the first time since May, as firms cited weaker confidence, higher borrowing costs and inflation pressures. Input costs rose at the fastest pace since May, and businesses continued to pass higher costs on to customers.</p><p dir="ltr">Company news</p><p dir="ltr">OpenAI is close to finalising a funding round of up to $30 billion at a pre-money valuation of $1.25 trillion, led by investors from the United Arab Emirates, according to reports. The valuation is below the roughly $1.4 trillion the company had reportedly sought earlier this month.</p><p dir="ltr">SK hynix said its Solidigm unit has ended a review of a US initial public offering, citing market conditions and share price trends. The listing had been considered to help fund a new US plant. SK hynix shares fell as much as 4.2% in early Seoul trading before swinging between gains and losses.</p><p dir="ltr">Western Digital reported fiscal first-quarter revenue up about 55% to $4.38 billion, driven by AI-related storage demand and higher prices, and guided above forecasts for the current quarter. Its shares nonetheless fell in after-hours trading amid the broader sell-off in AI-linked stocks.&nbsp;</p><p dir="ltr"></p><p dir="ltr"></p> This article was written by Eamonn Sheridan at investinglive.com.

<p dir="ltr">The survey gives the BoJ a mixed but broadly workable backdrop: steady growth and persistent cost pressure support further policy normalisation, while weaker hiring and softer demand argue for a gradual pace. For the yen, the data are unlikely to shift expectations much on their own, coming alongside this morning’s above-forecast core-core CPI reading. In JGBs, the combination of solid activity and sticky input costs is consistent with the <a href="https://investinglive.com/central-banks/most-analysts-now-expect-the-next-boj-rate-hike-in-december-none-see-october-move-bloomberg/" rel="follow">market keeping a December hike in play</a>. For equities, the slowdown in manufacturing new orders and export business is a mild headwind for exporters. Raw material costs remain a key pressure point, and sustained high oil prices linked to the Middle East conflict are likely to keep input cost inflation elevated into year-end.</p><p dir="ltr">---</p><p dir="ltr">Earlier:</p><ul><li><a href="https://investinglive.com/forex/japan-core-inflation-tops-boj-s-2-target-for-first-time-since-december-yen-firms" target="_blank" rel="follow">Japan core inflation tops BoJ’s 2% target for first time since December, yen firms</a></li></ul><p dir="ltr">---</p><p dir="ltr"> Japan’s private sector kept growing in October, but slowing factory momentum, weaker hiring and rising costs suggest the expansion is becoming more fragile as the BoJ weighs its next move.</p><p dir="ltr">Summary:</p><ul dir="ltr"><li>The S&amp;P Global flash Japan composite PMI output index was unchanged at 52.3 in October, the 19th straight month of expansion but the joint-slowest pace since May.</li><li>Services activity rose to 52.0 from 51.3, while the manufacturing PMI fell to 53.3 from 54.1 and manufacturing output dropped to 53.1 from 54.9, a seven-month low.</li><li>New orders grew at the slowest pace in three months, led by the weakest rise in factory orders since March. New export business rose at the softest rate in four months.</li><li>Job creation slowed to a 14-month low, with services payrolls falling for the first time since August 2025, even as backlogs grew at the fastest pace since June.</li><li>Input cost inflation edged higher on raw material and labour costs, while output price inflation stayed sharp but slowed to a four-month low.</li><li>Business confidence fell to its lowest in three months, with inflation a key concern.</li></ul><p dir="ltr"> Japan’s private sector continued to expand in October, but growth remained subdued as a slowdown in manufacturing was offset by stronger services activity, according to flash survey data from S&amp;P Global. Hiring slowed sharply and cost pressures increased, adding to the mixed picture facing the Bank of Japan ahead of next week’s policy meeting.</p><p dir="ltr">The S&amp;P Global flash Japan composite PMI output index was unchanged at 52.3, marking the 19th consecutive month of growth but matching the slowest pace since May. Services business activity improved to 52.0 from 51.3, while manufacturing lost momentum. The headline manufacturing PMI fell to 53.3 from 54.1, and the factory output index dropped to 53.1 from 54.9, its weakest reading in seven months.</p><p dir="ltr">Demand softened. New business rose at the slowest pace in three months, as goods producers reported the weakest growth in new orders since March. Services sales growth picked up but remained modest. Foreign demand was still positive, though new export orders grew at the slowest rate in four months.</p><p dir="ltr">The labour market was a notable weak spot. Even though backlogs of work grew at the fastest pace since June, firms were cautious about adding staff, and job creation slowed to a 14-month low. Manufacturers increased their workforces moderately, but services companies cut payrolls for the first time since August 2025. Manufacturers also stepped up their purchasing, building inventories of inputs at the fastest rate in almost four years, while supplier delivery times lengthened substantially.</p><p dir="ltr">Price pressures remained a central theme. Input cost inflation edged higher and was marked overall, with firms pointing to higher raw material and labour costs. Companies continued to raise selling prices sharply, though the rate of output price inflation slowed to a four-month low. Businesses still expect output to be higher in a year’s time, but confidence fell to its lowest in three months, with inflation a key concern.</p><p dir="ltr">Usamah Bhatti, economist at S&amp;P Global Market Intelligence, said overall growth was weaker than the average so far this year. He pointed to signs of a shift in momentum from manufacturing towards services as the year draws to a close. Bhatti described inflation as a key downside risk for the private sector and said it will be important to monitor domestic demand, given that the BoJ has raised its policy rate to 1.25%, the highest since 1995.</p><p dir="ltr">The survey was released shortly after national inflation data showed core inflation back above the BoJ’s 2% target in September, with the measure excluding food and energy rising faster than expected. Taken together, the data show an economy still growing and facing persistent cost pressures, but with signs of strain in hiring and demand.</p><p dir="ltr">Final October data are due on November 2 for manufacturing and November 5 for services and the composite index.</p><p dir="ltr"></p> This article was written by Eamonn Sheridan at investinglive.com.

<p>Japan CPI, September 2026 (ps<a href="https://investinglive.com/forex/japan-core-inflation-tops-boj-s-2-target-for-first-time-since-december-yen-firms/" rel="follow"> more detail here</a> added now)</p><p>Headline CPI 2.1% </p><ul><li>expected 2.1%, prior&nbsp;1.9%</li></ul><p>Core CPI 2.1% </p><ul><li>expected 2.1%, prior&nbsp;1.7%</li></ul><p>Core - core (ex-Food and Energy)&nbsp;2.4% </p><ul><li>expected 2.3%, prior 1.9%</li><li>this the closest to US core inflation</li></ul><p>Background to this here:</p><ul><li><a href="https://investinglive.com/news/japan-cpi-preview-core-seen-at-2-1-topping-boj-target-for-first-time-since-december" target="_blank" rel="follow">Japan CPI preview: core seen at 2.1%, topping BoJ target for first time since December</a></li></ul> This article was written by Eamonn Sheridan at investinglive.com.

<p dir="ltr">The survey shows weaker activity alongside firmer inflation, a difficult mix for rate expectations. Falling output argues against further tightening, while faster input and output price growth argues against easing. That uncertainty could add volatility to Australian dollar and short-dated bond pricing as traders weigh the two signals. Energy is a key channel: firms cited higher energy, shipping and commodity costs, so sustained oil prices above $110 a barrel are likely to keep feeding through to Australian business costs and consumer prices. Falling business confidence also points to a risk of softer investment and hiring intentions into year-end, which equity investors in domestically focused sectors are likely to watch.</p><p dir="ltr">---</p><p dir="ltr">Earlier, looks like more rate pain ahead:</p><ul><li><a href="https://investinglive.com/news/investinglive-asia-pacific-market-news-rba-s-hauser-puts-november-hike-in-play" target="_blank" rel="follow">RBA’s Hauser puts November hike in play</a></li></ul><p dir="ltr">---</p><p dir="ltr"> Australia’s private sector slipped into contraction in October as higher prices and borrowing costs hit demand, yet cost pressures intensified, leaving the economy with weaker growth and firmer inflation at the same time.</p><p dir="ltr">Summary:</p><ul dir="ltr"><li>The S&amp;P Global flash Australia composite PMI output index fell to 47.7 in October from 51.3, the first contraction in five months and the lowest reading since March.</li><li>Services activity dropped to 47.8 from 51.9, its first decline since May. The manufacturing PMI edged up to 49.7 from 49.6, and manufacturing output rose to 46.5 from 46.2, still in contraction.</li><li>New orders growth eased to near-neutral, with goods orders falling faster and services new business growth slowing. Export demand was broadly stable.</li><li>Input costs rose at the fastest pace since May, driven by energy, shipping, commodity and wage costs, and output price inflation picked up for a second month.</li><li>Employment rose on services hiring, and backlogs of work grew at the sharpest rate in a year and a half.</li><li>Business confidence stayed positive but fell to its lowest since June.</li></ul><p dir="ltr"> Australia’s private sector contracted in October for the first time in five months, as higher prices and rising borrowing costs weighed on demand, according to flash survey data from S&amp;P Global. At the same time, inflation pressures intensified.</p><p dir="ltr">The S&amp;P Global flash Australia composite PMI output index fell to 47.7 from 51.3 in September, dropping below the 50 level that separates growth from contraction. It was the lowest reading since March. The decline came mainly from services, where the business activity index slid to 47.8 from 51.9, the sector’s first contraction since May. Manufacturing output continued to shrink, though slightly less sharply, with its index edging up to 46.5 from 46.2. The headline manufacturing PMI was little changed at 49.7, up from 49.6.</p><p dir="ltr">Demand was the main source of weakness. Growth in new business slowed to near-neutral, reflecting a deeper fall in goods orders and slower growth in services. Companies in both sectors said a lack of market confidence, higher borrowing costs and broad inflationary pressures had hurt demand at the start of the fourth quarter. Overseas demand was broadly unchanged, an improvement on September’s modest decline, as manufacturers reported a smaller fall in new export orders.</p><p dir="ltr">Despite lower output, firms added staff in October, all of it in services. Service providers, which had cut jobs at the end of the third quarter, hired again to deal with growing workloads. Backlogs of work across the private sector rose at the fastest pace in a year and a half.</p><p dir="ltr">The inflation picture was less encouraging. Average input costs rose at the fastest rate since May, with manufacturers facing steeper increases than services companies. For goods producers, the rise mainly reflected supply pressures, as delivery times lengthened further. Firms in both sectors pointed to higher energy, shipping, commodity and wage costs. Companies increasingly passed those costs on to customers, lifting output price inflation for a second consecutive month.</p><p dir="ltr">Jingyi Pan, economics associate director at S&amp;P Global Market Intelligence, said business conditions had deteriorated at the start of the fourth quarter, with services now joining manufacturing in contraction. Based on company feedback, she attributed the downturn to higher prices and interest rates eroding demand, alongside weaker business confidence amid economic uncertainty. She warned that faster rises in both input costs and selling prices suggest inflation could stay elevated in the coming months, posing a further risk to demand in the near term.</p><p dir="ltr">Business sentiment remained positive overall, with firms hopeful that expansion plans would lift output over the next 12 months. However, confidence fell to its lowest level since June, as some companies cited concerns about the economic outlook and tougher operating conditions.</p><p dir="ltr">Final October data are due on November 2 for manufacturing and November 4 for services and the composite. Historically, flash readings have differed little from final figures.</p><p dir="ltr">---</p><p dir="ltr"></p> This article was written by Eamonn Sheridan at investinglive.com.

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What would tilt the bias lower?</a></li><li><a href="/education/trading-education-gold-falls-despite-lower-yields-a-lesson-in-trading-what-the-market-gives-you" rel="follow">Trading Education: Gold falls despite lower yields: A lesson in trading what the market gives you</a></li><li><a href="/news/canada-september-ppi-2-0-m-m-vs-1-3-prior" rel="follow">Canada September PPI +2.0% m/m vs +1.3% prior</a></li><li><a href="/news/us-initial-jobless-claims-194k-vs-200k-estimate-better-than-expected" rel="follow">US initial jobless claims 194K vs 200K estimate. Better than expected.</a></li><li><a href="/technical-analysis/morning-kickstart-stocks-fall-as-oil-rises-on-iran-risks" rel="follow">Morning Kickstart: Stocks fall as oil rises on Iran risks</a></li><li><a href="/news/investinglive-european-session-wrap-dollar-yen-and-bonds-kick-it-old-school" rel="follow">investingLive European session wrap: Dollar, yen and bonds kick it old school</a></li></ul><p>U.S. markets traded on two tracks Thursday. Technology and AI-related shares came under renewed pressure, while the Dow and small caps managed modest gains. The Nasdaq lost 2.60%, with the more concentrated Nasdaq 100 falling 2.90%. The Dow’s near-unchanged finish did little to describe the pressure beneath the surface.</p><p>The other big move came in Treasuries, where yields plunged by roughly 15–19 basis points. That is a significant decline. Recall the 10 year note reached 5.36% just last week. It is currenly at 4.96%.&nbsp; </p><p>Now, lower borrowing costs would normally give growth stocks some support. Today, that support was missing. Investors remained focused on AI spending and returns, while higher oil kept the inflation problem in the picture.</p><p>Dollar mixed; yen leads</p><p>The dollar finished mixed. It was strongest against the New Zealand dollar and weakest against the Japanese yen.</p><p>USDJPY fell 0.82% to 156.83, while USDCHF declined 0.46% to 0.8206. The sharp drop in Treasury yields helped support those moves. USDCAD also fell, down 0.21% to 1.4015, as higher oil and strong Canadian producer-price data provided a supportive backdrop for the loonie.</p><p>Elsewhere, EURUSD declined 0.17% to 1.1213, AUDUSD fell 0.14% to 0.7017, and NZDUSD dropped 0.32% to 0.5682. GBPUSD was little changed, up 0.02% at 1.3397.</p><p>The message? Selling in U.S. technology did not produce a broad rush into the dollar.</p><p>Treasury yields plunge</p><p>The late-session yield snapshot showed:</p><ul><li>2-year: 4.6524%, down 17.1 basis points.</li><li>5-year: 4.7784%, down 19.2 basis points.</li><li>10-year: 4.9612%, down 18.5 basis points.</li><li>30-year: 5.2857%, down 15.1 basis points.</li></ul><p>The 10-year moved below 5%, with the strongest buying concentrated in the intermediate maturities. That was consistent with investors seeking safety and reassessing the outlook for growth and monetary policy.</p><p>During the afternoon, <a href="https://investinglive.com/central-banks/the-market-now-sees-a-22-chance-the-fed-doesn-t-hike-again-this-year/?utm_source=chatgpt.com" rel="follow">InvestingLive reported</a> that futures pricing assigned a 22% probability to no further Fed hike this year. That still left another increase as the more likely outcome, but traders were giving a pause more consideration. <a href="https://investinglive.com/central-banks/the-market-now-sees-a-22-chance-the-fed-doesn-t-hike-again-this-year/?utm_source=chatgpt.com" rel="follow">investinglive.com</a></p><p>U.S. stocks: Technology takes the hit</p><p>The supplied closing snapshot showed:</p><ul><li>Dow industrial average: 52,873.28, +11.98 points or +0.02%.</li><li>S&amp;P 500: 7,663.43, −93.74 points or −1.21%.</li><li>Nasdaq Composite: 26,008.86, −694.00 points or −2.60%.</li><li>Russell 2000: 2,784.03, +3.01 points or +0.11%.</li><li>Nasdaq 100: 28,958.69, −863.83 points or −2.90%.</li></ul><p>The gap between the Nasdaq and the Dow was the story. Investors were particularly hard on the technology companies carrying much of the AI investment boom.</p><p><a href="https://investinglive.com/stocks/meta-shares-fall-7-on-huge-spending-plans/?utm_source=chatgpt.com" rel="follow">Meta fell around 7% during the session</a>, with its spending plans drawing scrutiny. The concern was whether the eventual returns would justify the enormous investment. <a href="https://investinglive.com/stocks/meta-shares-fall-7-on-huge-spending-plans/?utm_source=chatgpt.com" rel="follow">investinglive.com</a></p><p>My <a href="https://investinglive.com/stocks/mag-7-under-pressure-apple-bucks-the-selling/?utm_source=chatgpt.com" rel="follow">Mag 7 update</a> highlighted Apple (closed up 1.23%) as the exception to the selling across that group. Semiconductor weakness added to the pressure on the Nasdaq indices. The Dow and Russell holding small gains showed that some money was rotating, although the negative breadth meant this was hardly a healthy session underneath. <a href="https://investinglive.com/stocks/mag-7-under-pressure-apple-bucks-the-selling/?utm_source=chatgpt.com" rel="follow">investinglive.com</a></p><p>Overall the Nasdaq composite had it's worst day since June 5th. The Nasdaq 100 had it's worst day since June 23. Both indices closed below their 100 day MAs.&nbsp;</p><p>Economic data: Fewer layoffs, but hiring bears watching</p><p>Initial jobless claims fell to 194,000 versus 200,000 expected, with the prior week revised to 200,000 from 199,000. The four-week average declined to 197,750. Employers are still holding on to workers.</p><p>The offset came from continuing claims, which rose to 1.728 million versus 1.720 million expected. That suggests some workers are taking longer to find another job, although one weekly increase does not establish a trend.</p><p>The report offered little evidence of a sharp deterioration in employment. Nevertheless, the subsequent Treasury rally showed that the broader market’s concerns outweighed the stronger initial-claims headline.</p><p>In Canada, September producer prices rose 2.0% month over month, following 1.3%, with annual growth accelerating to 14.5%. Raw materials prices jumped 4.8% on the month and 27.0% annually.</p><p>Those are pipeline inflation pressures, rather than a direct forecast for consumer prices. Still, they complicate the Bank of Canada’s outlook after the softer CPI report earlier in the week. The supplied morning report put the probability of an October 28 hike near 80%.</p><p>Oil rises as Middle East risks persist</p><p>Crude oil was trading at $99.07, up $1.92 or approximately 1.98%.</p><p>The Middle East continued to provide support. InvestingLive’s coverage highlighted reports of preparations for possible renewed U.S.–Israeli strikes on Iran and intensifying Houthi attacks on Saudi Arabia. Those were reported risks, rather than confirmation that another round of strikes had begun. <a href="https://investinglive.com/commodities/oil-rises-as-hopes-for-a-deal-fade-amid-growing-prospects-of-another-us-attack-on-iran/?utm_source=chatgpt.com" rel="follow">investinglive.com</a></p><p>As Adam outlined in <a href="https://investinglive.com/commodities/the-market-can-t-shake-off-the-stalemate-in-the-middle-east/?utm_source=chatgpt.com" rel="follow">his post on the Middle East stalemate</a>, the absence of a diplomatic breakthrough continued to hang over energy markets. <a href="https://investinglive.com/commodities/the-market-can-t-shake-off-the-stalemate-in-the-middle-east/?utm_source=chatgpt.com" rel="follow">investinglive.com</a></p><p>That leaves traders facing an uncomfortable combination: falling yields and pressure on growth shares, but oil still near $100. The bond rally does not mean the inflation risk has disappeared.&nbsp;</p><p>Gold and silver fail to find support</p><p>Gold was trading at $4,021.61, down $119.41 or 2.88%. Silver fell $3.4024 or 5.87% to $54.5456.</p><p>Gold’s decline stood out because Treasury yields were sharply lower. Falling yields normally reduce the opportunity cost of holding a metal that pays no interest. Today, that relationship did not deliver support.</p><p>InvestingLive’s <a href="https://investinglive.com/commodities/gold-drops-as-middle-east-tensions-escalate-but-growth-concerns-could-provide-support/?utm_source=chatgpt.com" rel="follow">gold coverage</a> discussed concerns about tighter financial conditions alongside persistent inflation risks. Position reductions and demand for cash are also plausible explanations for gold falling with equities, although the price action alone cannot establish the cause. <a href="https://investinglive.com/commodities/gold-drops-as-middle-east-tensions-escalate-but-growth-concerns-could-provide-support/?utm_source=chatgpt.com" rel="follow">investinglive.com</a></p><p>Silver’s larger decline, alongside copper falling 2.68% to $6.4030, was consistent with pressure on industrially sensitive metals as well.</p><p>Bitcoin follows the selling</p><p>Bitcoin was trading at $81,214, down $2,810 or 3.34%, in the supplied snapshot.</p><p>For this session, it followed the pressure in technology and other risk assets. The sharp decline in yields failed to attract enough buying to offset those flows. Bitcoin was offering little protection from the equity selloff.</p><p>The next session will test whether technology buyers can regain their footing and whether the Treasury rally signals growing economic concern. Friday’s U.S. flash PMIs provide another growth check, while Middle East headlines remain the wildcard for oil and inflation expectations. Lower yields gave buyers an opportunity today. In technology, gold and Bitcoin, they failed to take it.</p> This article was written by Greg Michalowski at investinglive.com.

<p dir="ltr">USD/JPY has held a tight range this month between just under 157 and just under 159, with the 200-day EMA just above 157.50. A firm print would test the lower end of that range, while a soft one would push the pair back toward 159, where intervention risk becomes the main defence for the yen. In JGBs, the 2-year and 5-year sectors are the most exposed to any repricing of December hike odds, with the 5-year yield near 2.3%. For the Nikkei, a stronger yen and firmer rate expectations would usually hurt exporters and help banks, but AI-linked flows are likely to matter more than the CPI unless the surprise is large. Oil remains the wildcard: sustained crude strength tied to the Middle East conflict keeps energy feeding into Japanese inflation and into the BoJ’s upcoming forecasts.</p><p dir="ltr">--- Japan’s core inflation is forecast to clear the BoJ’s 2% target again, which would weaken the case for patience and strengthen the case for a December hike.</p><p dir="ltr">Summary:</p><ul dir="ltr"><li>Japan’s national September CPI is due at 2330 GMT Thursday (7:30pm US Eastern), and core inflation (ex fresh food) is expected at 2.1% against 1.7% in August.</li><li>Headline inflation is seen at around 2.1% from 1.9%, and the ex fresh food and energy measure at around 2.3% from 1.9%.</li><li>Tokyo’s September data beat forecasts by a wide margin, with core at 2.7% and ex food and energy at 3.0%, pointing to upside risk.</li><li>The BoJ raised rates to 1.25% in September on a 7-2 vote and is expected to hold at its October 29-30 meeting, with December seen as the next likely move.</li><li>The 10-year JGB yield has eased to around 2.9% on safe-haven demand, and USD/JPY has held near 158.</li><li>A September trade deficit about three times the forecast continues to weigh on the yen.</li></ul><p dir="ltr"> Japan’s nationwide consumer inflation data for September, due at 2330 GMT on Thursday (7:30pm US Eastern), is expected to show core inflation back above the Bank of Japan’s 2% target for the first time since December. That result would strengthen the case for another rate rise before the end of the year.</p><p dir="ltr">Core CPI, which excludes fresh food but includes energy, is forecast to have risen 2.1% from a year earlier, according to a Reuters poll of 15 economists, up from 1.7% in August. Economists attribute much of the expected pickup to higher energy costs linked to the Middle East conflict reaching household bills. Other analysts expect headline inflation to rise to around 2.1% from 1.9%. They see the measure that excludes both fresh food and energy, often treated as a gauge of underlying price pressure, at around 2.3%, up from 1.9%.</p><p dir="ltr">The risk appears tilted toward a firmer reading. Tokyo’s September figures, released earlier this month, ran well ahead of forecasts: headline and core inflation both reached 2.7%, and the ex food and energy measure hit 3.0%. The Tokyo data are published about three weeks before the national numbers and are widely used as a leading indicator. The comparison is not exact, however. Part of the Tokyo jump came from the expiry of some government support measures, while nationally, electricity subsidies were still holding power prices down in August, when they were about 2.4% lower than a year earlier.</p><p dir="ltr">The release comes at a sensitive point for the central bank. The BoJ raised its policy rate to 1.25% in September, its second increase this year. The decision passed on a 7-2 vote, and the two dissenters argued that inflation was still running below target. Core inflation had stayed under 2% for seven consecutive months through August, including through both hikes. A core reading at or above consensus would weaken that objection less than a week before the October 29-30 policy meeting.</p><p dir="ltr">Officials have increasingly emphasised upside risks. Governor Kazuo Ueda told parliament this week that underlying inflation is very close to the 2% goal. He cited strong global demand linked to artificial intelligence alongside a tight labour market. Deputy Governor Himino has warned of the danger of acting too late. Ueda has also described the bank’s task as anchoring inflation around 2%, rather than trying to lift it as it did during the deflation era.</p><p dir="ltr">Even so, an October move is not the base case. Sources familiar with the bank’s thinking told Reuters that the BoJ is likely to keep rates on hold this month unless the yen weakens further and pushes up import costs. The sources said the bank is likely to raise its inflation forecast for next fiscal year as oil prices sustain price pressures for longer than expected, and to keep its focus on inflation risks, leaving room for a hike as soon as December. Market pricing assigns almost no chance to an October increase. Estimates of December odds vary by measure, from around 60% to about 80%.</p><p dir="ltr">Japanese government bonds have rallied ahead of the data. The 10-year yield has eased to around 2.9%, its lowest since early September, after peaking above 3.1% in late September. The 30-year yield has fallen to near 3.9%, its lowest since early August. Safe-haven demand linked to the Middle East, fiscal strains in France and volatility in AI-related equities have supported the move. Analysts at MUFG expect the 10-year to trade between 2.85% and 3.00% this week. A firm inflation print would test that rally.</p><p dir="ltr">The yen has been stuck. USD/JPY has spent much of October near 158, caught between expectations of further BoJ tightening and steady structural selling of the currency. Japan’s September trade deficit came in at around ¥540 billion, roughly three times the forecast, reflecting the yen that importers must sell to pay their bills. Finance Minister Katayama has not specified an intervention level, but the threat of official buying has helped limit the pair’s upside.</p><p dir="ltr">Equities are likely to take their direction mainly from technology. The Nikkei briefly regained the 70,000 mark earlier this month on renewed AI optimism, before a global sell-off in AI and semiconductor shares hit sentiment.</p><p dir="ltr">Beyond today’s data, the focus moves to next week’s BoJ quarterly outlook report. In it, the bank is expected to say that underlying inflation has roughly reached 2%, a signal of its readiness to keep raising rates. A national print that confirms the Tokyo signal would support that view. A reading below 2% would revive the dissenters’ argument and leave the yen relying more heavily on the threat of intervention.&nbsp;</p><p dir="ltr"></p> This article was written by Eamonn Sheridan at investinglive.com.

<p>If you lot are finished trashing the hapless Nasdaq I can give you a heads up on what's ahead in Asia.&nbsp;</p><p>Main focus is on the data from Japan. I'll post a preview of the September CPI separately. The Tokyo area data for September was ...&nbsp;<a href="https://investinglive.com/central-banks/tokyo-core-cpi-jumps-to-2-7-fastest-in-10-months-strengthening-boj-rate-hike-case/" rel="follow">fastest in 10 months, strengthening BOJ rate hike case</a></p><p></p> This article was written by Eamonn Sheridan at investinglive.com.

<p>The Treasury sold $26 billion of 5-year Treasury Inflation-Protected Securities, or TIPS, with the following results:</p><ul><li>High yield: 2.367%.</li><li>WI level at the time of the auction: 2.360%.</li><li>Tail: 0.7 basis point vs the average of 0.2 basis point.</li><li>Bid to cover: 2.41X vs the average of 2.52X.</li><li>Directs: 32.4% vs the average of 23.0%.</li><li>Indirects: 62.1% vs the average of 67.8%.</li><li>Dealers: 5.5% vs the average of 9.2%.</li></ul><p>Auction grade: C−</p><p>A somewhat softer auction overall. The Treasury needed to offer a yield 0.7 basis point above the WI level to get the issue sold, a larger tail than average. Bid to cover was also below average, while indirect bidders (foreign buyers) took a smaller share. The offset was strong direct demand (domestic buyers), which helped leave dealers with just 5.5% of the issue—well below average. So there were some positives underneath the headline, but the tail and softer overall bidding keep the grade below a C-.</p><p>What are TIPS, and how do they work?</p><p>TIPS provide investors with protection against inflation by adjusting the security’s principal with the Consumer Price Index. When inflation rises, the principal increases. The coupon rate stays fixed, but the dollar interest payments increase as that rate is applied to a larger principal balance. Payments are made every six months. <a href="https://www.treasurydirect.gov/marketable-securities/tips/?utm_source=chatgpt.com" rel="follow">www.treasurydirect.gov</a></p><p>For example, take $1,000 of principal with a hypothetical 2% coupon. If the inflation adjustment lifts that principal to $1,030, the annualized interest payment rises from $20 to $20.60. The coupon rate stays the same; the principal used to calculate the payment changes. <a href="https://www.treasurydirect.gov/marketable-securities/understanding-pricing/?utm_source=chatgpt.com" rel="follow">www.treasurydirect.gov</a></p><p>Today’s 2.367% auction yield is a real yield, meaning a yield above the security’s CPI inflation adjustment. It is separate from the coupon rate and does not represent the market’s inflation forecast. The difference between a conventional Treasury yield and a TIPS yield of the same maturity provides a measure known as breakeven inflation. <a href="https://www.treasurydirect.gov/marketable-securities/tips/tips-negative/?utm_source=chatgpt.com" rel="follow">www.treasurydirect.gov</a></p><p>At maturity, investors receive the inflation-adjusted principal or the original principal, whichever is greater. That floor protects the original face amount, although it does not necessarily protect any premium paid when purchasing the security.</p><p>With the current 5 year yield at 4.7909% what does that tell traders/investors?</p><p>Using the 5-year Treasury yield of 4.7909% and today’s TIPS auction yield of 2.367%, the spread is:</p><p>4.7909% − 2.367% = 2.4239 percentage points, or 242.39 basis points.</p><p>That is an approximate 5-year breakeven inflation rate of 2.42%, assuming the yields are measured at the same time and have comparable maturities.</p><p>In plain English, the conventional Treasury pays a higher yield because its payments do not adjust for inflation. The TIPS offers a lower real yield, with CPI inflation adjustments added through its principal. The spread represents the inflation compensation priced into the comparison. <a href="https://www.federalreserve.gov/data/tips-yield-curve-and-inflation-compensation.htm?utm_source=chatgpt.com" rel="follow">TIPS Yield Curve and Inflation Compensation</a></p><p>For an investor holding to maturity, roughly speaking:</p><ul><li>Average CPI inflation above 2.42%: TIPS would tend to deliver the better return.</li><li>Average CPI inflation below 2.42%: The conventional Treasury would tend to deliver the better return.</li><li>Average CPI inflation near 2.42%: Returns would be broadly comparable.</li></ul><p>That is an approximation; cash-flow timing and reinvestment also matter.</p><p>What does today’s auction tell us? The spread is consistent with investors pricing inflation averaging around the mid-2% area over the next five years. It does not mean inflation will be 2.42% every year, or that this is a precise forecast. Breakevens also reflect inflation-risk compensation and differences in liquidity between conventional Treasuries and TIPS. <a href="https://www.federalreserve.gov/econres/notes/feds-notes/tips-from-tips-update-and-discussions-20190521.html?trk=article-ssr-frontend-pulse_little-text-block&amp;utm_source=chatgpt.com" rel="follow">Tips from TIPS: Update and Discussions</a></p><p>The auction itself was somewhat soft, with a 0.7-basis-point tail. Holding the conventional yield unchanged, that higher TIPS yield would narrow the breakeven spread by 0.7 basis point compared with the pre-auction WI level. But that small auction concession alone does not establish that inflation expectations are falling. We would need the earlier spread, using both yields at matching times, to judge the trend.</p> This article was written by Greg Michalowski at investinglive.com.

<ul><li>Prior was +1.3% m/m</li><li>PPI y/y 14.5% vs 13.5% prior</li><li>Raw materials price index 4.8% m/m vs 3.3% prior</li><li>Raw materials price index 27.0% y/y vs 22.9% prior</li></ul><p>The market is pricing in an 80% chance of a Bank of Canada rate hike on October 28. This week's CPI number was on the low side but this data point highlights the inflation in the pipeline.</p><p>USD/CAD is down 10 pips to 1.4035 today and that highlights how the dynamic in the FX market has totally flipped. S&amp;P 500 futures are down 0.9% but the market sees it as money fleeing the US AI trade, not a traditional 'risk off'.</p><p dir="ltr">For background, Canada’s producer price data come in two monthly reports from Statistics Canada: the Industrial Product Price Index (IPPI) and the Raw Materials Price Index (RMPI). They’re typically released together at 8:30 am ET, a few weeks after the reference month ends.</p><p dir="ltr">The IPPI measures prices that Canadian manufacturers receive for goods as they leave the factory gate, covering everything from refined petroleum and lumber to metals, chemicals, food products and motor vehicles. The RMPI tracks the prices manufacturers pay for raw materials, including crude oil, metal ores, logs, grains and livestock. Many of those inputs aren’t produced in Canada, so the RMPI is effectively a gauge of global commodity costs flowing into Canadian industry.</p><p dir="ltr">The headline figures are the monthly and annual changes in each index, and neither is seasonally adjusted. Because energy dominates, StatCan also publishes the IPPI excluding energy and petroleum products, which gives a cleaner read on broader factory-gate pricing.</p><p dir="ltr">The Canadian dollar is a big driver. Many Canadian exports, such as lumber, metals and energy, are priced in US dollars, so a weaker loonie raises the Canadian-dollar value of those goods and lifts the IPPI. A stronger loonie does the opposite. Some swings in the index reflect currency moves rather than any change in underlying pricing pressure.</p><p dir="ltr">Unlike the US PPI, the Canadian reports cover only goods and don’t feed into a preferred inflation gauge, so they rarely move markets. They’re mainly watched as an early signal of cost pressures that could eventually reach consumer prices, and of how commodity swings and tariffs are hitting Canadian producers’ margins.</p><p></p> This article was written by Adam Button at investinglive.com.

<ul><li>Prior week for initial claims 199K</li><li>Prior week for&nbsp;continuing claims 1.710M</li></ul><p></p><p>Details from the release:</p><ul><li><p>Initial jobless claims: 194,000, down 6,000 for the week ending October 17. Prior revised to 200,000 from 199,000.</p></li><li><p>Initial claims four-week average: 197,750, down 1,000. Prior revised to 198,750 from 198,500.</p></li><li><p>Continuing claims: 1,728,000 vs 1,720,000 est., up 25,000 for the week ending October 10. Prior revised to 1,703,000 from 1,710,000.</p></li><li><p>Continuing claims four-week average: 1,711,000, up 4,000. Prior revised to 1,707,000 from 1,708,750.</p></li><li><p>Insured unemployment rate: 1.1%, unchanged.</p></li></ul><p>US initial jobless claims fell to 194,000, according to the Department of Labor’s weekly report. The decline reverses the previous week’s increase, while the four-week average moved lower as well. Both point to employers continuing to hold on to workers.</p><p>The offset came from continuing claims, which increased 25,000 to 1.728 million. That suggests some difficulty finding another job among workers receiving benefits, although one weekly increase does not establish a trend.</p><p>Before seasonal adjustment, initial claims fell 19,321, a larger decline than the 14,179 anticipated by seasonal factors. Unadjusted initial and continuing claims also remained below their comparable year-earlier levels.</p><p>Quick analysis: Fewer new claims are encouraging, but the hiring side still bears watching. This report gives the Fed little evidence of a sharp deterioration in employment. In isolation, the lower initial reading could support the dollar and Treasury yields by reducing the urgency for rate cuts. The increase in continuing claims tempers that signal. The question now is whether that increase persists.</p><p>What this report measures: Initial claims count new applications for unemployment insurance and provide a timely indication of layoffs. Continuing claims track ongoing benefit claims and can help show how quickly unemployed workers are finding jobs. The headline figures are seasonally adjusted, subject to revision, and cover different weeks, with continuing claims lagging initial claims by one week.</p> This article was written by Greg Michalowski at investinglive.com.

<p>Headlines:</p><ul><li><a href="/commodities/oil-rises-as-hopes-for-a-deal-fade-amid-growing-prospects-of-another-us-attack-on-iran" rel="follow">Oil rises as hopes for a deal fade amid growing prospects of another US attack on Iran</a></li><li><a href="/stocks/us-futures-tumble-as-ai-rally-faces-fresh-scrutiny-despite-solid-meta-earnings" rel="follow">US futures tumble as AI rally faces fresh scrutiny despite solid Meta earnings</a></li><li><a href="/technical-analysis/chart-of-the-day-gold-price-falls-below-4-100-as-sellers-threaten-another-breakdown" rel="follow">Chart of the day: Gold price falls below $4,100 as sellers threaten another breakdown</a></li><li><a href="/commodities/gold-drops-as-middle-east-tensions-escalate-but-growth-concerns-could-provide-support" rel="follow">Gold drops as Middle East tensions escalate, but growth concerns could provide support</a></li><li><a href="/forex/eur-chf-falls-to-three-month-lows-as-french-bond-turmoil-raises-fresh-euro-risks" rel="follow">EUR/CHF falls to three-month lows as French bond turmoil raises fresh euro risks</a></li><li><a href="/cryptocurrency/ethereum-tumbles-as-renewed-middle-east-tensions-weigh-on-risk-sentiment-what-s-next" rel="follow">Ethereum tumbles as renewed Middle East tensions weigh on risk sentiment. What's next?</a></li><li><a href="/news/france-business-confidence-improves-in-october-but-cracks-remain-beneath-the-surface" rel="follow">France business confidence improves in October but cracks remain beneath the surface</a></li><li><a href="/news/us-iran-tensions-refuse-to-fade-as-fresh-strait-of-hormuz-attacks-keep-oil-markets-on-edge" rel="follow">US-Iran tensions refuse to fade as fresh Strait of Hormuz attacks keep oil markets on edge</a></li></ul><p>Markets:</p><ul><li>JPY leads, NZD lags on the day</li><li>Brent crude up 2.8% to $111.88</li><li>10-year Treasury yields down 9 bps to 5.05%</li><li>Gold up 2.0% to $4,060</li><li>European equities tumble; S&amp;P 500 futures down 1.0%</li><li>Bitcoin down 3.4% to $81,738</li></ul><p></p><p style="text-align: justify" class="text-align-justify">It's been a while since we've reverted back to the classic risk-off move in markets, but this is about as close as it gets.</p><p style="text-align: justify" class="text-align-justify">As geopolitical tensions linger and equities are being sent to the cleaners, we're seeing a return of old school risk-off flows in markets. The dollar and yen are bid among major currencies while bonds are also trading higher i.e. yields lower. The only notable difference is in commodities as oil is up and gold is down instead.</p><p style="text-align: justify" class="text-align-justify">US-Iran tensions are still messing around with the risk mood, keeping oil markets on edge and that is seeing Brent crude push above $111 to its highest since May. And as inflation fears return, that is causing tech stocks to tumble lower alongside concerns over the AI rally as investors start to question whether the massive spending can produce the necessary results to support the already lofty valuations.</p><p style="text-align: justify" class="text-align-justify">S&amp;P 500 futures are down 1.0% while Nasdaq futures are down 1.7%. And over in Europe, French fiscal risks continue to weigh on the overall mood with the France-Germany 10-year yield spread breaking out to 170 bps - its highest since 2011. That is seeing stocks erase the gains from yesterday with the DAX falling by 0.8% and CAC 40 down by 1.2%.</p><p style="text-align: justify" class="text-align-justify">In the major currencies space, it's one of those classic days where the dollar, yen, and franc are all bid against the rest of the bloc. USD/JPY is down 0.7% to 157.05 while EUR/USD has tumbled from 1.1240 to 1.1195 during the session, as the euro struggles amid growing fiscal worries in France. EUR/CHF itself is also falling to a three-month low in testing the 0.9200 level.</p><p style="text-align: justify" class="text-align-justify">Besides that, gold is weighed down after weeks of consolidation in a drop below $4,100 today. That is leading to further selling pressures as the precious metal is unable to catch a break in falling to $4,060 on the day. And that is despite Treasury yields also dropping hard, with 10-year yields easing lower to 5.05% as <a href="https://investinglive.com/news/market-playbook-is-the-bond-market-starting-to-worry-more-about-us-growth-than-inflation/" rel="follow">investors look to be favouring growth concerns once again</a>.</p><p></p> This article was written by Justin Low at investinglive.com.