Highlights:
Global markets ended the week broadly upbeat as softer U.S. inflation data reignited hopes of another Federal Reserve rate cut and breathed new life into risk appetite. Equities surged to fresh record highs, powered by upbeat earnings and renewed optimism that monetary easing will extend the bull run into year-end. Bond yields slipped as investors embraced the dovish shift, while gold steadied after wild swings fuelled by profit-taking and geopolitical jitters. In Europe, stronger-than-expected business activity hinted at a resilient recovery, adding to the global feel-good mood. Meanwhile, currencies danced to the rhythm of shifting rate expectations and improving trade sentiment, with the dollar cooling as traders positioned ahead of the highly anticipated Trump-Xi meeting. Overall, markets wrapped up the week balancing relief over cooling inflation with anticipation for what could be a pivotal few weeks in global policy and geopolitics.
Data highlights:
In Canada, inflation was reported at 2.4% in September, higher than the 2.3% forecast. Retail sales in Canada rose 4.9% year-on-year in August, outperforming market expectations of 3.8%. U.S. consumer price index rose 3.0% year-on-year, slightly below the 3.1% forecast but above the previous 2.9%. The U.K. inflation rate held steady at 3.8%, matching the prior reading and coming in below the 4.0% forecast. U.K. retail sales grew by 1.5% year-on-year in September, coming in higher than the 0.6% forecast by analysts. Japan’s inflation was reported at 2.9%, matching market expectations. In China, GDP expanded by 4.8% year-on-year in Q3, matching market expectations but lower than the previous 5.2% reading.
Week ahead:
Australia Consumer Price Index, Canada Interest Rate Decision, U.S Interest Rate Decision – Wednesday | Japan Interest Rate Decision, Eurozone GDP Growth Rate Q3, Eurozone Interest Rate Decision, U.S GDP Growth Rate Q3 – Thursday| Eurozone Inflation Rate YoY – Friday
