By the end of the day on Friday, the Dow Jones Index (US30) rose by 0.83% (weekly result +0.89%). The S&P 500 Index (US500) gained 0.59% (weekly result +1.04%). The Technology Index Nasdaq (US100) closed Friday in the green at 0.51% (weekly result +0.23%).
This week, the updated IMF World Economic Outlook will be published on Tuesday, and speeches by regulators, including Fed Chair Warsh, will set the tone for assessing global stagflation risks and the future trajectory of interest rates. In the United States, September inflation data will be the main test of monetary expectations ahead of the upcoming Fed meeting. The projected acceleration of headline CPI to 3.6% y/y (0.6% m/m) due to rising fuel prices and an increase in core inflation to 2.5% y/y confirm the “sticky” nature of price pressures. PPI data (0.5% m/m) and retail sales (0.3% m/m) will shed light on how resilient consumer demand and business margins remain under expensive credit conditions, while housing market and industrial production indicators will complement the picture of the real sector’s condition. In parallel, the US financial sector (JPMorgan, Citigroup, Goldman Sachs, Wells Fargo, BofA, Morgan Stanley), together with giants such as BlackRock, Johnson & Johnson, and UnitedHealth, will give the market the first fundamental signals about the quality of loan portfolios and corporate profits for the third quarter.
The decline of the Canadian dollar (CAD) to 1.43 CAD per US dollar (a 19‑month low) underscores the rapid deterioration of Canada’s macroeconomic foundation. A sudden drop in employment by 68.3 thousand jobs combined with an increase in unemployment to 6.5% has finally convinced markets that the Bank of Canada has fully completed its rate‑hiking cycle and will be forced to maintain an accommodative or neutral stance to support the labor market. GDP stagnation in July (0.0%) and modest growth of 0.2% in August only confirm that the country’s commodity sector is facing serious operational and external trade constraints.
The weakening of the Mexican peso (MXN) to 18.44 per US dollar and its approach to the yearly low clearly illustrate the market’s reassessment of interest rate differentials. The regulator Banxico’s shift toward potentially resuming the rate‑cutting cycle from the current 6.50% amid slowing core inflation (to 3.75%) and sluggish domestic demand directly contradicts the hawkish stance of the US Federal Reserve, where markets are pricing in a high risk of additional monetary tightening. The narrowing yield spread between Mexican and US government bonds undermines the attractiveness of the peso as one of the main favorite currencies for carry trade operations.
In Europe, by the end of the day on Friday, Germany’s DAX (DE40) rose by 1.13% (weekly result -0.65%), France’s CAC 40 (FR40) closed up 0.98% (weekly result -0.57%), Spain’s IBEX 35 (ES35) gained 0.55% (weekly result -0.66%), and the UK’s FTSE 100 (UK100) closed the trading session higher by 1.06% (weekly result +0.86%). A relatively calm European calendar will shift investors’ focus to confirming the inflation level in the Eurozone (3.8% y/y in September) and the pace of local industrial sector recovery (expected modest growth of 0.1% m/m). However, the key systemic risks for the region are concentrated in the United Kingdom, where GDP and industrial production fell by 0.1% in August amid a historic surge in 10‑year gilt yields to 5.51%, exacerbating London’s fiscal imbalances.
The decline in oil prices (WTI) toward $90 per barrel reflects a temporary easing of concerns about a physical shortage of distillates after the agreement between the United States and Russia on supplying Russian diesel to the global market. Previously, the United States had imposed tariffs on countries trading oil products with Russia. Nevertheless, the fundamental downside potential for prices remains constrained by the escalation in the Middle East: repeated Houthi strikes on key Saudi Arabian infrastructure and risks of direct US involvement in retaliatory operations against Yemeni groups keep the geopolitical premium elevated. For global central banks preparing for IMF and World Bank meetings in Bangkok, oil remaining near $90 means that the energy component of inflation will continue to pressure sovereign bonds.
In Asia on Friday, Japan’s Nikkei 225 (JP225) fell by 0.02% (weekly result -0.12%), China’s FTSE China 50 closed higher by 0.36% (weekly result +0.34%), Hong Kong’s Hang Seng (HK50) dropped by 2.60% (weekly result -2.25%), and Australia’s ASX 200 (AU200) closed Friday higher by 0.79% (weekly result -0.05%). The macroeconomic agenda of the Asia‑Pacific region for the upcoming week is focused on indicators of industrial activity, external trade, and the effectiveness of monetary stimulus. The main driver of sentiment will be the data flow from China. The projected acceleration of CPI to 1.1% y/y and PPI to 4.4% y/y indicates the pass‑through of high energy prices into production costs. At the same time, double‑digit export growth (25.3%) and import growth (23.5%), as well as the expected volume of new yuan loans (975 billion yuan), will shed light on the resilience of China’s domestic demand and the scale of support for key sectors of the economy amid intensifying trade friction with the European Union. In the corporate sector, the key event will be the quarterly report of Taiwan Semiconductor Manufacturing Company (TSMC). Against the backdrop of declining share prices of major US chipmakers and a reassessment of CapEx in AI infrastructure, TSMC’s results will provide a clear signal about actual demand for advanced semiconductor nodes and the resilience of the entire supply chain of the global technology sector.
S&P 500 (US500) 7,811.54 +46.18 (+0.59%)
Dow Jones (US30) 51,654.95 +423.31 (+0.83%)
DAX (DE40) 25,087.27 +280.30 (+1.13%)
FTSE 100 (UK100) 10,552.05 +110.45 (+1.06%)
USD Index 102.23 +0.09 (+0.09%)
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