Summary
United States: Fed Still Poised to Cut as Inflation Data Show Only Modest Gain
The fire is not out for inflation, but the 0.2% rise in core CPI in September was the smallest in three months and keeps the Federal Reserve on track to deliver another 25 bps rate cut at its meeting this coming Wednesday. There were also signs of life in the existing home sales market this week.
Next week: Consumer Confidence (Tue.), FOMC Meeting (Wed.)
International: Global Inflation Pressures and Emerging Resilience
China’s Q3 GDP growth slowed but still exceeded expectations, rising 4.8% year-over-year, while several countries—including Canada, New Zealand and Japan—reported higher inflation readings this week. The UK was a notable exception, with inflation cooling. Meanwhile, PMI data from both the Eurozone and the UK surprised to the upside, pointing to a modest pickup in economic momentum heading into the final quarter of the year.
Next week: Bank of Canada (Wed.), Bank of Japan (Thu.), European Central Bank (Thu.)
Topic of the Week: Crude Oil Pops Under Sanction Pressure
The U.S. expanded sanctions on Russian oil firms this week, while maintaining hiked tariffs on Indian goods in an effort to pressure Moscow’s key export partner. Despite the spike in oil prices, elevated OPEC production and softer global demand point to continued easing in energy inflation into year-end.