U.S. equities ended higher on Wednesday, with the Nasdaq leading the move but falling just short of a new record close. The Dow Jones Industrial Average and S&P 500 both set fresh records.
Closing levels:
Dow Jones: +43.21 points (+0.09%) to 46,441.10
S&P 500: +22.74 points (+0.34%) to 6,711.20
Nasdaq Composite: +95.15 points (+0.42%) to 22,755.16
Russell 2000: +5.86 points (+0.24%) to 2,442.35
Investors shrugged off the government shutdown, betting that lawmakers will eventually strike a deal. With markets closed tomorrow for the Jewish holiday, Congress cannot reconvene before Friday. In the meantime, key economic releases are on hold: jobless claims won’t be published tomorrow, and the September jobs report scheduled for Friday is unlikely to be released.
Atlanta Fed GDPNow Inches Lower, Shutdown Looms
The Atlanta Fed’s GDPNow model edged down to 3.8% growth for Q3, from 3.9% previously.
The estimate has begun dropping data due to the government shutdown. For example, September construction spending was not released, and further missing indicators will reduce its reliability.
Historically, shutdowns have had limited but real impacts. The 35-day closure during Trump’s first term shaved about 0.1 percentage point from GDP.
In their own words:
After this morning’s release from the Institute for Supply Management, a decrease in the nowcast of third-quarter real personal consumption expenditures growth from 3.4 percent to 3.2 percent was partially offset by an increase in the nowcast of real gross private domestic investment growth from 4.1 percent to 4.2 percent. The US Census Bureau construction spending report was not released this morning because of the government shutdown. We plan on maintaining the release schedule throughout the shutdown but will skip updates if there are no monthly data releases since the last GDPNow update.
ISM Manufacturing Stays in Contraction
The ISM manufacturing index registered 49.1 in September, just above expectations of 49.0 and up from 48.7 in August.
Details:
Prices paid: 61.9 (vs 63.2 expected, 63.7 prior)
Employment: 45.3 (vs 43.8 prior)
New orders: 48.9 (vs 51.4 prior)
Imports: 44.7 (vs 46.0 prior)
Production: 51.0 (vs 47.8 prior)
The data highlight ongoing weakness in orders and employment despite a modest rebound in production.
From the report:
“Business continues to be severely depressed. Profits are down and extreme taxes (tariffs) are being shouldered by all companies in our space. We have increased price pressures both to our inputs and customer outputs as companies are starting to pass on tariffs via surcharges, raising prices up to 20 percent. The addition of the derivative steel and aluminum tariffs in the middle of the month — with no announcement — was devastating. Interest-rate lowering or the ‘One Big Beautiful Bill’ will not impact our business, as all capital projects are on hold until there is some level of certainty and customers start to place orders for new equipment again. We believe we are in a stagflation period where prices are up but orders are down due to tariff policy, and again, customers are not willing to pay the higher prices, so they are just not buying. Continuing to find ways to reduce overhead, which means letting go of experienced workers.” (Transportation Equipment)
“The tariffs are still causing issues with imported goods into the U.S. In addition to the cost concerns, product is being held up at borders due to documentation issues. The inflation issues continue; low volumes are a constant concern. The European region is not improving as we had expected, causing further concern for long-term business viability.” (Chemical Products)
“Ongoing macroeconomic conditions highlighted by interest-rate management and tariffs continue to impact customer purchasing decisions, resulting in subdued production rates and growing cost concerns on direct material and operations.” (Machinery)
“Lead times have slightly normalized, but tariffs continue to drive additional spend.” (Petroleum & Coal Products)
“Customer orders are depressed for heavy machinery because tariffs are so impactful to high-end capital equipment. Revenue expectations are flat for the rest of 2025, with no outlook to improve in 2026.” (Electrical Equipment, Appliances & Components)
“Current business conditions remain volatile, with geopolitical tensions, weather disruptions and shifting trade policies driving uncertainty in agricultural commodities. Oils remain sensitive to biofuel demand and global production. Inflation and evolving consumer trends add further complexity. To manage this, we are emphasizing supplier diversification, long-term contracts and formula-based pricing to balance cost stability with flexibility.” (Food, Beverage & Tobacco Products)
“The semiconductor industry is being impacted by high tariff prices on parts from Korea, China and Europe. Our industry is at a low point right now as we race to get new nanotechnology in the U.S.” (Computer & Electronic Products)
“Business is slowing down. Order books are softening as customers push orders out. Seems to be stemming from concerns about the direction of the U.S. economy.” (Plastics & Rubber Products)
“Tariffs still affecting vast amounts of increases in hardware, Al (artificial intelligence) and stainless steel. MRO (maintenance, repair and operating) products have continually increased, and the slowdown in agriculture has had stark impacts on bottom lines for raw materials.” (Fabricated Metal Products)
“Steel tariffs are killing us.” (Miscellaneous Manufacturing)
US Manufacturing PMI Final at 52.0
The final S&P Global manufacturing PMI for the U.S. in September was confirmed at 52.0, matching the preliminary estimate but down from 53.0 in August.
Firms attempted to pass higher supplier costs on to customers, but competitive pressures and softening demand saw output charge inflation ease to an eight-month low. Job losses were also reported, reflecting caution about the outlook.
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence
“US manufacturing production rose for a fourth successive month in September, but the upturn lost momentum as companies reported a drop in order book growth alongside a buildup of unsold finished goods inventories.
“Despite a slowing in demand growth, many factories produced more goods, using up raw materials that had been stockpiled ahead of tariff implementation. This poses a downside risk to future production in the absence of a pickup in demand, though also hints at some alleviation of price pressures: there is already evidence of companies offering excess stock to customers at reduced rates.
“A growing uncertainty, however, relates to supply chains, with September seeing an increase in tariff- related vendor delays, which threaten to curb production and push up prices if these difficulties persist or intensify.”
US ADP Jobs Data Misses Sharply in September
ADP reported that U.S. private payrolls fell by 32,000 in September, a sharp miss compared with expectations of a 50,000 gain. August’s figure was revised down to a 3,000 decline from an earlier +54,000.
Breakdown by sector:
Goods-producing: -3K (prior +13K)
Services: -28K (prior +42K)
Trade/transport/utilities: -7K (prior -17K)
Leisure/hospitality: -19K (prior +50K)
Wage growth slowed as well. Median pay for job stayers rose 4.5% (vs 4.4% prior) while pay for job changers cooled to 6.6% (vs 7.1% prior).
With the U.S. government now shut down, this could be the only September jobs data released if nonfarm payrolls are delayed. Markets are pricing in 47 bps of rate cuts by year-end and 104 bps over the next year.
“Despite strong Q2 growth, September shows employers are being very cautious on hiring,” said ADP chief economist Nela Richardson.
U.S. Mortgage Applications Slide Sharply
The Mortgage Bankers Association reported that U.S. mortgage applications fell 12.7% in the week ending September 26, after a 0.6% increase the prior week.
The market index dropped to 339.1 from 388.3, while the purchase index slipped to 172.2 from 174.5. Refinancing activity also fell sharply, with the index down to 1,278.6 from 1,609.8. The average 30-year mortgage rate rose to 6.46% from 6.34%.
Fitch: Shutdown Has No Near-Term Impact on US Rating
Fitch Ratings said the ongoing U.S. government shutdown does not affect its AA+/Stable sovereign rating in the near term.
The agency flagged ongoing reliance on stopgap spending bills as a sign of fiscal policy weakness but noted the dollar’s reserve currency role remains secure.
Reversing past Medicaid cuts would not materially affect deficit forecasts, Fitch said. The growth impact of the shutdown will depend on its length and scope.
Supreme Court to Hear Trump Case on Fed Official
The U.S. Supreme Court has refused to allow Donald Trump to immediately remove Fed Governor Lisa Cook. Instead, arguments will be heard in January, with a decision expected sometime afterward.
The case joins a crowded docket, which already includes a major tariff-related dispute scheduled for November.
Fed’s Logan: Inflation Target Still Out of Reach
Dallas Fed President Lorie Logan said the U.S. may need more slack in the labor market to ensure inflation falls back to the 2% target.
She noted that price pressures in non-housing services could push inflation toward 2.4%, excluding tariff effects. Logan added that financial conditions are currently acting as a tailwind, and overall policy stance remains only modestly restrictive.
While she stressed caution in further rate cuts, Logan declined to specify how much room the Fed has to ease before hitting neutral. She pointed to strong consumption and investment as complicating factors.
JPMorgan: Government Shutdown Could Last Up to 15 Days
JPMorgan analysts assigned a 70% chance that a looming U.S. government shutdown will extend 11–15 days, warning it could disrupt markets and delay key data releases.
The bank said this duration fits historical precedent. Even a shorter shutdown could rattle investor sentiment, while a two-week pause might weigh on fiscal growth as the Fed considers future rate moves.
Analysts added that markets may pay closer attention to private-sector data such as PMI surveys, which continue unaffected during federal closures.
Senate Democrats’ Shutdown Bill Blocked
A Democratic bill to avert a U.S. government shutdown failed in the Senate after Republicans voted against it. The defeat all but guarantees a shutdown will begin at midnight.
Goldman Sachs: Stocks Banking on Soft Landing, Bonds See Job Risks
Goldman Sachs said equity investors appear confident the Fed can cut rates without hurting growth, while fiscal stimulus provides additional support.
Bond markets, however, are signaling fears of labor market weakness, focusing on downside risks in jobs data. Goldman warned that the September employment report will be critical, with markets likely to react strongly to each release as the disconnect plays out.
Bank of Canada Minutes Highlight 2.5% Inflation View
The Bank of Canada’s latest meeting minutes showed policymakers largely agreed that underlying inflation remains near 2.5%.
Key points:
Members noted that uncertainty over USMCA renegotiations could weigh on business investment.
Consumption growth was described as strong, broad-based, and expected to support near-term GDP.
Labor markets showed signs of softening.
The economy is still seen expanding modestly, in line with July’s tariff-based outlook.
Members admitted difficulty in gauging economic slack and the inflation outlook.
Officials plan to present updated baseline projections at the October meeting.
Canada’s Manufacturing Sector Contracts Again
S&P Global’s September PMI for Canada came in at 47.7, weaker than August’s 48.3.
Output and new orders both contracted at a faster rate than the prior month. Weaker demand meant many firms opted not to replace departing staff, while some reported enforced layoffs.
Commenting on the latest survey results, Paul Smith, Economics Director at S&P Global Market Intelligence said:
“Latest data showed the continued underperformance of Canada’s manufacturing economy. Output, new orders and exports all continued to fall, with the uncertain trading environment also leading firms to make cuts to purchasing, inventories and employment.
“Once again tariffs and Canada’s trading relationship with the United States remained a dominant theme amongst survey participants, as firms noted the detrimental impacts on exports and confidence in general. Firms therefore understandably remain cautious, preferring instead to adopt a wait-and-see attitude rather than plan for and commit to new projects.
“One of the positives from the latest report is a dissipation of price pressures, with both input costs and selling prices rising at slower rates. This will provide reassurance to Bank of Canada policymakers that a reduction in underlying inflation pressures is underway and provide further justification for September’s cut in interest rates.”
Gold Hits Record $3,895 as Fed Cut Bets Strengthen
Gold surged to a fresh record high of $3,895 before easing back to $3,871, still up over 0.30% on the day.
The rally was fueled by:
ADP data showing a surprise plunge in private-sector jobs.
The U.S. government shutdown delaying Friday’s Nonfarm Payrolls release.
Falling Treasury yields and a softer U.S. dollar.
Investors are increasingly convinced the Fed will cut rates at its October 29 meeting. Current market pricing implies a 98% probability of a 25 bps cut, with just a 4% chance of no change.
While ISM manufacturing data showed modest improvement, it remained in contractionary territory, adding to the case for policy easing.
Crude Oil Settles Lower at $61.78
Crude futures finished Wednesday at $61.78, down $0.59 or -0.95%.
Inventory data weighed on prices:
Crude: +1.792M barrels (vs +1.048M expected)
Gasoline: +4.125M (vs +3.450M expected)
Distillates: +578K (vs +1.716M expected)
Refinery utilization: -1.6% (vs -0.7% expected)
Beyond U.S. stock builds, OPEC+ plans to ramp up production have revived concerns of a global supply surplus.
On the charts, crude found support near $61.40 — just above the $61.45–$61.94 swing area from mid-August. A break below this range could open the path toward $60. The April low of $55.15 remains the year’s trough.
US Oil Inventories Rise, Gasoline Stocks Build
The EIA reported U.S. crude inventories rose by 1.79 million barrels in the week, above forecasts for a 1.05 million increase. That followed the prior week’s 607,000-barrel draw.
Breakdown:
Gasoline: +4.13 million (vs +3.45M expected)
Distillates: +578K (vs +1.72M expected)
Refinery utilization: -1.6% (vs -0.7% expected)
The larger-than-expected gasoline build added pressure to refined product prices, while crude stocks rose moderately.
ING: OPEC+ Supply Chatter Weighs on Oil
ING analysts Ewa Manthey and Warren Patterson said reports of larger-than-expected OPEC+ supply hikes have pressured oil prices lower.
The group has been gradually reversing voluntary cuts of 1.66 million barrels per day, adding 137,000 bpd monthly. But recent reports suggest it may instead approve three monthly hikes of about 500,000 bpd each. A decision is expected at the October 5 meeting.
API data added a mixed picture: U.S. crude stocks fell 3.7 million barrels, Cushing inventories dropped 693,000, while gasoline and distillates rose by 1.3 million and 3 million barrels respectively.
Middle distillate cracks remain supported, though ARA gasoil inventories are at their highest since May. Russia’s diesel export ban for resellers is expected to have limited immediate impact, though it could open the door to wider restrictions in future.
Gold Tests New Highs as Momentum Builds
Gold prices extended their rally, hitting an intraday peak of $3,875 before easing slightly, according to OCBC analysts Frances Cheung and Christopher Wong. Spot Gold was last seen at $3,876.
The bank said momentum remains bullish, though RSI indicators show overbought conditions. Resistance lies at $3,890 (138.2% Fibonacci extension) and $4,006 (150% extension), with support at $3,750, $3,657 (21-DMA), and $3,500.
They noted gold remains underpinned by central bank buying, higher ETF inflows, the Fed’s easing cycle lowering opportunity costs, and uncertainty around global tariffs.
Goldman Sachs Expects OPEC+ to Lift Quotas in November
Goldman Sachs forecast OPEC+ will increase production quotas by around 140,000 barrels per day in November, though it said a bigger move is possible.
The bank pointed to tight global stockpiles, solid Asian demand, and declining Russian output as reasons quotas could rise further. It recalled that OPEC+ previously tripled monthly hikes when the market absorbed earlier increases smoothly.
Since April, the group has raised quotas by over 2.5 million bpd after reversing its cut strategy. Reuters reported a likely increase of at least 137,000 bpd at the October 5 meeting.
OPEC+ Debates Larger November Output Increase
OPEC+ is weighing whether to expand its planned November oil output hike to as much as 500,000 barrels per day, far larger than October’s 137,000 bpd increase.
Sources told Reuters that members may approve an increase between 274,000 and 411,000 bpd, though Russia has voiced reservations due to sanctions and seasonal demand concerns.
Since April, the group has added more than 2.5 million bpd back to the market, unwinding earlier cuts of nearly 5.85 million bpd. The alliance, which accounts for about half of global oil production, is set to decide at its October 5 meeting.
Private Oil Inventory Data Shows Crude Draw
The latest API survey showed a large unexpected crude draw of 3.674 million barrels, against expectations of a build.
Gasoline stocks rose 1.3 million barrels, while distillates gained 3.003 million. Cushing inventories fell 693,000 barrels.
European equities rallied strongly, with broad gains of more than 1% despite BCA Research downgrading the region’s stock outlook.
Closing levels:
Stoxx 600 +1.2%
German DAX +1.1%
France CAC +1.1%
UK FTSE 100 +1.1%
Spain IBEX +0.5%
Italy FTSE MIB +0.8%
Eurozone Manufacturing PMI Revised Up Slightly
HCOB reported the Eurozone’s final September manufacturing PMI at 49.8, slightly above the flash estimate of 49.5 but down from 50.7 in August.
The reading confirmed a slowdown to two-month lows in both the headline index and output. New orders dropped at their fastest pace in six months, and business confidence faltered. However, cost pressures eased further, with both input prices and output charges declining modestly.
HCOB notes that:
“For the seventh month in a row, production in the Eurozone has ticked upwards compared to the previous month, but progress has been sluggish. There is no clear sign that things are about to pick up speed anytime soon. Incoming orders dipped slightly and mostly flatlined through spring and summer. As a result, companies continued trimming staff and cutting down inventory levels in September.
“The drop in the PMI is showing up across the board, with respective figures for consumer goods, capital goods and intermediate goods all down on the month. Especially in the latter two, we’re seeing a break in the upward trend that started late last year and had pushed both sectors into growth territory by August. The consumer goods sector, which had been relatively stable compared to the others, might take a hit from the new 100% U.S. tariffs on pharmaceuticals.
“The stagnation observed in the manufacturing sector can also be viewed positively. Considering the headwinds like U.S. tariffs, political uncertainty in France and Spain (where both governments are under fire), Germany’s rocky start with its new administration, and broader geopolitical tensions, Europe’s industrial sector is holding up surprisingly well. It is showing resilience. Still, the longer reforms are delayed and the business environment stays unfavourable due to high energy costs and red tape, the harder it gets for companies to stay profitable and competitive. Against this backdrop it is not a surprise that confidence among businesses is lower than the average of the past ten years.
“In mid-sized Eurozone economies like the Netherlands and Spain, manufacturing is actually growing. Meanwhile, in the big three, Germany, France, and Italy, the recession that started back in 2022-2023 is easing but has not fully ended. Germany’s manufacturing sector outlook for next year is looking up, backed by a recent report from leading economic institutes projecting 1.6% growth in this sector. France manufacturers, on the other hand, face a more subdued outlook, largely due to its fragile government, which could soon stumble over the 2026 budget.”
Eurozone Inflation Holds at 2.2% in September
Eurostat’s preliminary data showed Eurozone consumer prices rose 2.2% year-on-year in September, matching expectations and up from 2.0% in August.
Core CPI was unchanged at 2.3% for the fifth straight month. Services inflation stayed elevated at 3.2%, while food price inflation eased slightly to 3.0%. The figures suggest the ECB still has work ahead to bring inflation fully under control.
Germany Manufacturing PMI Revised Higher
Germany’s September manufacturing PMI was finalized at 49.5, higher than the preliminary 48.5 but still a step down from August’s 49.8, according to HCOB.
The survey noted new orders weakening again, while business expectations slipped to their lowest level in nine months.
Commenting on the PMI data, Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, said:
“The attempt to break through the expansion mark of 50 has failed. By August, the headline PMI had crept up to just below the critical 50 threshold in several steps, but now there has been another setback, which accurately reflects the fragile situation in the manufacturing sector. Most recently, it was a decline in new orders that has weighed on the manufacturing sector. This development is likely to mean that output, which rose quite solidly in late summer, will grow only marginally in the coming months, if at all.
“Looking at the production figures in isolation, the manufacturing sector appears to be enjoying a healthy upturn, as output has been rising for seven months now. However, other indicators suggest that companies are already preparing for another downturn, as job cuts are continuing at a relatively high pace and inventories of purchased materials are also being reduced, albeit at a slightly slower rate than in previous months. It is quite obvious that the German government’s announcements of strong growth in investment and defence procurement in the new budget for 2026 are only being given limited credence. Accordingly, confidence in future production increases has declined to a modest level.
“Industrial companies are currently benefiting from the fact that import prices have fallen quite sharply, while firms cut sales prices only slightly in September, so profit margins should have increased. However, the fact that companies have rarely been able to enforce price increases for over two years now underscores that competition has intensified in general due to the weak economic situation and the ‘China shock’.”
France Manufacturing PMI Drops Again
HCOB’s final September reading for France’s manufacturing PMI was 48.2, in line with the preliminary estimate of 48.1 but down from 50.4 in August.
The data confirmed that the tentative industrial rebound over the summer has lost momentum, with weak demand continuing to drag business activity lower as Q3 closed out.
HCOB notes that:
“After tentative signs of recovery in August, September brought a sobering reality for France’s manufacturing sector, as reflected in the HCOB PMI. The decline in the headline index was primarily driven by a sharp drop in output, which in turn stemmed from deteriorating demand conditions. New orders weakened, particularly in the investment goods sector. This sector likely serves as a bellwether for broader economic sentiment, suggesting that rising political uncertainty is increasingly weighing on both consumer and investment activity.
“Surprisingly, hiring activity among French manufacturers remains positive. Although the pace of recruitment has slowed, the employment index has stayed in expansion territory for five consecutive months. However, this should not obscure the fact that many of the new hires appear to be temporary, according to survey responses, indicating that companies remain cautious when it comes to long-term employment decisions. This caution is understandable given the ongoing uncertainty surrounding international trade, the strength of the euro, and political instability. Meanwhile, backlogs of work have declined for the fourth month in a row.
“Faced with weak order volumes and intense competitive pressure, companies are responding by offering price discounts. While this may help support demand in the short term, it is likely to squeeze profit margins, especially as input costs are edging up slightly. The combination of subdued demand, rising costs, and pricing pressure underscores the challenging environment manufacturers are currently navigating. In this context, it is hardly surprising that companies are growing less optimistic about the future, as indicated by a drop in the future output index.”
Spain’s Manufacturing Sector Softens in September
Spain’s manufacturing PMI came in at 51.5 in September, below expectations of 53.9 and down from August’s 54.3, according to HCOB.
It was the weakest result since June. New orders and output both grew more slowly, while job losses were reported for the first time in seven months. On the positive side, price pressures were subdued, with overall output charges falling for the first time in three months.
HCOB notes that:
“Spain’s manufacturing sector is facing a temporary setback, as indicated by the HCOB PMI data for September. Although the sector’s growth momentum decelerated, the broader upward trend seems to remain intact. In line with the headline index, manufacturing output softened, though it’s important to note that August saw an unusually strong rise in production. Against this backdrop, the current slowdown should not be overinterpreted. Supporting this view, inventories of raw materials have increased for the first time in four months. This suggests that both sales and production may have fallen short of corporate expectations.
“Spanish manufacturers remain optimistic about the future, despite a more subdued performance in forward-looking indicators this month. New orders continue to show overall stability; however, foreign demand has deteriorated. This decline may be attributed to the persistently strong euro and ongoing disruptions in global trade. Additionally, political instability in Spain’s neighbouring country France and the resulting uncertainty are likely weighing on export conditions. Nonetheless, business expectations remain close to their long-term average, underscoring a resilient sentiment among producers.
“Hiring activity dropped sharply in September – an unexpected development given that both production and order volumes continued to grow, albeit at a slower pace. Elevated global uncertainty is likely prompting firms to adopt a more cautious approach to recruitment. This restraint may also be linked to declining profit margins among manufacturers in September. While input costs, particularly for suppliers and metals, continued to rise, overall output charges fell, largely due to competitive pressures.”
Italy Manufacturing PMI Slips Back Below 50
Italy’s manufacturing PMI fell to 49.0 in September, under the 50.0 expected and down from 50.4 in August, HCOB reported.
The survey pointed to renewed contractions in both output and new orders. Input prices increased at their fastest pace in six months, but firms managed to record job creation for the first time in a year. Despite the return to contraction, analysts highlighted encouraging signs in the underlying details.
Commenting on the PMI data, Nils Müller, Junior Economist at Hamburg Commercial Bank, said:
“The joy proved short-lived: Italy’s manufacturing sector slipped back into contraction territory in September, after it expanded marginally the month before. The headline HCOB PMI fell to 49.0 from 50.4, with the downturn affecting most of the components of the index. This latest reading marks the steepest deterioration in operating conditions in three months and highlights the fragility of the sector’s recovery.
“August’s marginal expansion had been driven mainly by a surge in output. However, this momentum faded swiftly, as production declined modestly, partly reversing what was the strongest rise in over two years in August. The New Orders Index recorded its lowest reading since June, weighed down by economic uncertainty and weakening household demand. Export sales meanwhile contracted sharply, with firms reporting reduced demand from key markets in Europe, the US, and Asia.
“Despite the weakening demand environment, employment rose for the first time in a year, supported by planned business expansions and improved sentiment regarding future output. Purchasing activity and inventories continued to decline, reflecting cautious spending and efforts to manage stock levels efficiently. Cost pressures re-emerged, with input prices rising at the fastest rate since March, driven by higher raw material costs. However, firms were largely unable to pass these increased costs on to customers, as selling prices remained broadly unchanged amid competition for new work and subdued demand.
“While the current data point to renewed weakness, Italian manufacturers remain optimistic about the year ahead. Investment plans, new product development and entry into new markets are supporting a more upbeat outlook. Whether this optimism translates into sustained growth will depend on a stabilisation in demand and a more favourable global environment.”
UK Manufacturing PMI Confirms Weakness
Final S&P Global data showed the UK manufacturing PMI at 46.2 in September, matching the flash estimate and down from 47.0 in August.
The report highlighted continued job losses and another steep drop in new export business, underscoring ongoing strain across the sector as Q3 ended.
Rob Dobson, Director at S&P Global Market Intelligence
“The final Manufacturing PMI results provide further worrying news for the health of UK industry. Manufacturers are facing an increasingly challenging environment, with intakes of new business and levels of production hit by weak market sentiment, a dearth of new export work and a high-cost environment exacerbated by tax and labour cost rises. Companies entwined into the autos supply chain are also facing a temporary hit to activity following the cyber-attack on JLR.
“The current tough operating environment is also seeping through to business confidence and leading to an increased focus on cost cutting. Confidence about the next 12 months remains at a relatively subdued level, job losses have been recorded in each of the past 11 months, and a further cut in purchasing activity is symptomatic of a focus on trimming non-essential spending.
“There is some better news, however, as a number of firms noted that lean inventories, combined with hopes that market and globe trade uncertainties could subside, may boost production volumes. There are also signs that, while costs are still high overall, the pace at which they are increasing is slowing. This could provide some wiggle room for interest rate cuts to support growth and also help offset any higher taxes announced in November’s Budget.”
UK House Prices Rebound in September
Nationwide Building Society reported that UK house prices rose 0.5% in September, beating expectations of a 0.2% gain and reversing August’s 0.1% decline. The average home price now stands at £271,995.
Nationwide said supportive conditions remain in place despite global uncertainty. “Unemployment is low, wages are rising, and household finances are solid,” the lender noted. It also pointed to the likelihood of borrowing costs easing if the Bank of England lowers its rate in the coming months.
Provided the wider economy stays on track, Nationwide expects housing activity to gradually strengthen through the quarters ahead.
Swiss Manufacturing PMI Falls Into Deeper Contraction
Procure’s September survey showed Switzerland’s manufacturing PMI dropping to 46.3, weaker than the 48.0 forecast and down from 49.0 in August.
The report cited sharp declines in both new orders and output, with the latter sliding back into contraction territory. Firms described conditions as “tense” amid the impact of U.S. tariffs. The survey also revealed that 47% of companies now report being affected by tariffs — the highest share recorded so far.
Swiss Retail Sales Slip in September
Switzerland’s retail sales fell 0.2% year-on-year in September, according to data from the Federal Statistics Office. That compares with a revised 0.9% rise in August (previously reported at +0.7%).
The decline marks a step back in consumer spending momentum as households contend with slower demand and external economic pressures.
BoE’s Mann: Higher for longer inflation risk is playing out
Comments from the BoE policymaker, Catherine Mann
We have to balance inflation and activity
Put more weight on inflation persisting
Rates on hold are appropriate for the current period
There is drift in inflation expectations
Above inflation threshold for a very long time
Supply side of the economy continues to be in trouble
Tariff landscape continues to shift
The domestic component is the more important issue in the UK
Tax and minimum wage rises are being passed through
China Launches K Visa to Woo STEM Graduates as U.S. Raises Bar
China has introduced a new “K visa” designed to attract young foreign STEM graduates, granting them residency and work rights without requiring a job offer. The program stands in stark contrast to U.S. H-1B visas, which now carry a $100,000 annual fee.
Immigration experts say the scheme could appeal to Indian and other STEM professionals disillusioned with the U.S. lottery and sponsorship hurdles. Analysts also noted the symbolism: Beijing lowering barriers as Washington raises them.
Still, China faces its own obstacles, including language and cultural challenges, vague eligibility rules, and limited citizenship pathways. Other nations, such as South Korea, Germany and New Zealand, are also competing with looser visa systems.
Taiwan Rejects U.S. Call to Shift Half of Chip Production
Taiwan has pushed back against a U.S. proposal that it move half of its semiconductor production to American soil, saying the idea would damage its economy and weaken a strategic advantage.
U.S. Commerce Secretary Howard Lutnick revealed the Trump administration’s plan, which seeks a “50–50 split” in production to cut dependence on Taiwan, where 95% of U.S. chips are currently made. Lutnick called the distance — “9,000 miles away” — a growing risk amid Beijing’s threats.
But Taipei’s Democratic Progressive Party and local media sharply criticized the proposal, describing it as exploitative and warning it would hollow out a critical industry.
While TSMC is already building plants in Arizona under the U.S. CHIPS Act, Taiwan sees its semiconductor dominance as both an economic pillar and a geopolitical shield, making it unlikely to cede control. The dispute highlights rising frictions over U.S. supply-chain “onshoring” ambitions
Report of BHP Iron Ore Halt in China Disputed
Confusion swirled this week after Bloomberg reported that China’s state-backed iron ore buyer, China Mineral Resources Group (CMRG), had told traders and mills to stop new dollar-denominated purchases from BHP. The report landed just before China’s October 1–8 holiday, rattling markets.
However, Mysteel, a Chinese commodity pricing firm cited by the Australian Financial Review, challenged the claim. It said after checking with mills and other channels, it confirmed the information was “not true” and no such directive had been received.
The contradictory accounts underscore both the fragility of sentiment in the iron ore market and Beijing’s push to gain greater control over pricing. BHP’s shares slipped earlier in the week following the Bloomberg report.
China Sidesteps U.S. Soybeans as Argentina Fills the Gap
China has not purchased a single U.S. soybean shipment this season, according to lawmakers briefed this week, raising alarms that American farmers are being squeezed as leverage in trade disputes. Argentina has stepped in to capture Chinese demand, further sidelining U.S. exports.
Republican senators, including Mike Rounds and John Hoeven, voiced concern after Ambassador David Perdue told them in a closed-door session that Beijing was deliberately avoiding U.S. farm products. Rounds said China was “intentionally not buying,” while Hoeven stressed that farmers were “being used as bargaining chips” and called for protection measures.
The tension is straining rural communities that heavily backed Donald Trump in the 2024 election. Shrinking markets and thinner safety nets are intensifying pressure. Meanwhile, Argentina has boosted sales to China at the same time Washington is working on a $20 billion currency swap line with Buenos Aires.
Trump has pledged to funnel tariff revenues into farm aid, with fresh support packages expected in the coming weeks. The U.S. and China are in a tariff détente until November, with Trump and Xi scheduled to meet during the APEC summit at the end of October. While Perdue declined to elaborate on his private remarks to lawmakers, he confirmed that negotiations remain ongoing.
New Zealand Building Consents Rise in August
New Zealand building permits rose 5.8% in August from July, following a 5.3% monthly gain. Year-on-year, approvals were up 6.9%, according to official data.
Standalone house approvals, excluding apartments and retirement units, also rose 5.8%.
BOJ: Firms Split on U.S. Tariff Effects
A Bank of Japan official said companies gave mixed feedback in the Tankan survey on how U.S. tariffs are affecting them.
Some firms said the Japan–U.S. trade deal had reduced uncertainty and boosted outlooks, while others reported worsening conditions due to higher labor and distribution costs and concerns about weaker consumer demand.
Several firms said they had successfully passed on costs, while others worried about competitiveness. The responses reflected a wide range of expectations across sectors.
BOJ Tankan Survey Shows Mixed Signals
The Bank of Japan’s quarterly Tankan survey showed sentiment among large manufacturers at 14 in Q3, slightly below expectations of 15 but up from 13 in Q2. Large non-manufacturers held steady at 34, in line with forecasts and the highest since December 2024.
The large manufacturing outlook index came in at 12, versus an expected 13. The large non-manufacturing outlook reached 28, close to forecasts.
Small businesses painted a weaker picture. The small manufacturing index was flat at 1, while small non-manufacturers slipped to 14, the lowest since September 2024. Outlooks showed further strain, with small manufacturing at –1 and small non-manufacturing at 10.
Capex intentions diverged: large firms raised plans to 12.5% (vs 11.3% expected), while small firms projected a 2.3% decline.
Inflation expectations held steady at 2.4% for one and three years ahead, and edged up to 2.4% from 2.3% over five years.
Japan’s Factory Sector Slumps in September
Japan’s manufacturing sector contracted at its sharpest pace in six months during September, with the S&P Global PMI dropping to 48.5 from 49.7 in August. The result was slightly above the flash estimate of 48.4 but still marked the weakest performance since March.
Firms cited soft Chinese demand and U.S. tariffs as major drags. New business fell at its fastest rate since April, while export orders shrank as well. Business confidence slipped to a five-month low, and employment growth slowed.
Input costs rose at a three-month high, driven by labor and raw materials, though inflation remained below earlier peaks. Companies responded by lifting selling prices to safeguard margins.
Japan’s Akazawa: $550 Billion U.S. Investment Will Avoid FX Shock
Japan’s economy minister Akazawa said the country’s planned $550 billion investment in the United States will be carried out in a way that avoids disrupting foreign exchange markets.
He explained that the $550 billion figure sits within a range that ensures “no FX impact,” signaling Tokyo’s intent to carefully calibrate its cross-border flows.
Ripple’s XRP traded at $2.93 on Wednesday, maintaining a bullish intraday outlook as traders position for a potential breakout above $3.00.
XRP futures activity shows strong retail participation. CoinGlass data reports the Open Interest (OI)-Weighted Funding Rate averaging 0.0099% — sharply higher than 0.0011% last Friday.
Rising funding rates suggest traders are leaning heavily long, reinforcing the bullish trend. Analysts caution, however, that when rates climb above 0.1%, they often signal overheating. For now, the current level is viewed as sustainable, giving bulls confidence to press higher.
Exchange reserves, which had spiked in September, have stabilized — a signal of steady investor confidence.
Ethereum Rises 5% as Fusaka Upgrade Clears First Test
Ethereum (ETH) jumped 5% to $4,320 after the network’s Fusaka upgrade was successfully finalized on the Holesky testnet. The milestone brings the upgrade closer to a mainnet launch.
Fusaka introduces 12 Ethereum Improvement Proposals (EIPs), including the highly anticipated PeerDAS (EIP-7594), designed to lower costs and increase throughput on Layer 2 networks by allowing validators to verify rollups without downloading full blob data.
The rollout schedule:
Sepolia testnet: October 14
Hoodi testnet: October 28
Tentative mainnet launch: December 3
Fusaka follows May’s Pectra upgrade, which introduced smart wallet functions, improved staking, and blob expansion. Once Fusaka goes live, Holesky will be shut down and replaced by Hoodi, following stability issues Holesky faced during Pectra testing.
ETH has also cleared a descending trendline and is now targeting its 50-day SMA.
Solana Jumps as VisionSys Unveils $2B Treasury
Solana (SOL) climbed 7% on Wednesday to test resistance at $219 after VisionSys AI announced a $2 billion treasury program in partnership with staking protocol Marinade Finance.
The healthcare AI firm said its subsidiary Medintel Technology signed an exclusive agreement with Marinade to manage the initiative. VisionSys will begin by acquiring and staking $500 million of SOL over six months.
Marinade will oversee staking operations and security. CEO Heng Wang said: “By leveraging Marinade’s expertise, we are building not just a treasury, but a foundation for the future.”
The treasury program is designed to enhance liquidity, bolster VisionSys’s balance sheet, and support new DeFi applications.
VisionSys joins other corporates holding large SOL treasuries, including Forward Industries, which committed $1.65 billion last month. According to the Strategic SOL Reserve, combined holdings by major firms now total 20.92 million SOL, valued at $4.59 billion.
ASTER Faces Pressure From Token Unlocks, Falling Open Interest
Aster (ASTER) fell 14.6% in the past day before stabilizing, as concerns over token unlocks and waning trader interest weighed on sentiment.
Rumors suggested a 704 million token unlock — equal to 8.8% of total supply — would flood the market. However, Wednesday’s release only freed up already-circulating airdropped tokens from the Token Generation Event, not adding new supply. Still, a further 320 million tokens are scheduled to be unlocked on Sunday, which will increase circulating supply by 4%.
Derivatives data added to bearish signals. CoinGlass reported ASTER open interest dropped 7.74% in the last 24 hours to $1.12 billion, reflecting capital outflows. Funding rates also fell from 0.195% to 0.0108%, pointing to weaker bullish conviction.
Coinbase Exec: AI Agents Will Rely on Crypto
John D’Agostino, Coinbase’s head of institutional strategy, said artificial intelligence agents will need to use crypto to function effectively in financial markets, arguing that traditional systems are outdated.
Speaking to CNBC, D’Agostino explained: “AI is infinitely scalable intelligence. Blockchain, as the foundation for crypto, is an infinitely scalable source of truth. Together they work seamlessly.”
He added that current financial rails — designed a century ago — cannot support real-time, machine-to-machine transactions at scale. “You wouldn’t stream a movie on dial-up. You shouldn’t ask AI agents to run on outdated financial rails.”
D’Agostino also said Bitcoin should not be compared to gold, given its programmable, digital, and scalable nature. He sees potential inflows as interest rates decline and money market funds release capital.
While institutions are entering crypto, he cautioned against expecting a sudden “wave” of adoption. “Pensions and sovereign wealth funds don’t move like lemmings. They’re deliberate and cautious,” he said.
ECB Pushes Ban on Multi-Issuance Stablecoins, Digital Euro Targeted for 2029
The European Central Bank, backed by the EU’s systemic risk board, is advocating a ban on multi-issuance stablecoins, warning they could destabilize the bloc in times of stress. The proposal could hit issuers such as Circle and Paxos while the ECB accelerates its push toward a digital euro.
The ESRB, chaired by Christine Lagarde, endorsed the ban last week. While non-binding, the move increases pressure on EU lawmakers to tighten MiCA regulations or put forward alternative safeguards. Lagarde has repeatedly compared the risk to past cross-border banking crises.
Dollar-backed tokens currently make up 99% of the $230 billion global stablecoin market, while euro-denominated stablecoins account for just 0.15%. Officials say this imbalance threatens Europe’s monetary sovereignty, making a digital euro — now eyed for a 2029 launch — more urgent.
Separately, nine banks including ING, UniCredit and CaixaBank plan to roll out a euro-backed stablecoin in 2026 under MiCA rules. The ECB has also emphasized it will preserve physical cash as part of a “dual payments” approach.
Equities: The Dow (+0.09%) and S&P 500 (+0.34%) closed at record highs, while the Nasdaq gained 0.42% but stopped short of a new high. Small-cap Russell 2000 rose 0.24%. Investors shrugged off the government shutdown, which is delaying key data releases including jobless claims and the September payrolls report.
Jobs: ADP reported -32K private payrolls in September (vs +50K expected), with August revised to a 3K loss. Services (-28K) and leisure/hospitality (-19K) led the decline. Wage growth slowed for job changers (6.6% vs 7.1%), reinforcing Fed cut bets. Markets now price in 47 bps of easing by year-end.
Manufacturing:
S&P Global final PMI held at 52.0 (down from 53.0 in August).
ISM stayed in contraction at 49.1; production improved (51.0) but employment remained weak (45.3).
GDP outlook: Atlanta Fed GDPNow estimate ticked to 3.8% (from 3.9%), but reliability will fade as shutdown data gaps widen.
Fitch: Said the shutdown has no near-term impact on the AA+/Stable rating, but reliance on stopgap funding reflects weak fiscal governance.
Supreme Court: Declined to let Trump fire Fed Governor Lisa Cook immediately. Case will be argued in January.
Canada:
Manufacturing PMI fell to 47.7 (vs 48.3 prior), signaling deeper contraction. Firms cited weak demand and layoffs.
BoC minutes: Policymakers agreed inflation hovers near 2.5%, with consumption still strong but labor market softening. USMCA renegotiation risks weigh on business investment.
Commodities
Oil: WTI crude settled at $61.78 (-0.95%) as U.S. inventories rose: crude +1.79M, gasoline +4.13M. OPEC+ production plans added to oversupply fears. Technically, support sits near $61.40; a break could open the path to $60.
Gold: Hit a fresh record $3,895, before easing to $3,871 (+0.30%). Weak jobs data, lower yields, and Fed cut bets (98% chance of Oct 29 easing) fueled demand.
Europe
Equities rallied despite a downgrade by BCA Research:
Stoxx 600 +1.2%
DAX +1.1%, CAC +1.1%, FTSE 100 +1.1%
Spain IBEX +0.5%, Italy MIB +0.8%
Crypto
Solana (SOL): Jumped 7% to $219 after VisionSys AI unveiled a $2B treasury plan with Marinade Finance, starting with a $500M purchase. Corporate SOL holdings now total 20.92M ($4.59B).
Ethereum (ETH): Rose 5% to $4,320 after the Fusaka upgrade finalized on Holesky testnet. Next steps: Sepolia (Oct 14), Hoodi (Oct 28), mainnet (Dec 3). Fusaka includes PeerDAS to cut L2 costs.
XRP: Traded at $2.93, with rising futures funding rates (0.0099% vs 0.0011% last week) signaling strong long positioning ahead of a possible $3 breakout.
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