Core Insights - Eurozone inflation has slightly decreased to 2.1% in October from 2.2% in September, still above the 2% target, indicating persistent price stickiness, particularly in the services sector [1][3] - Core inflation remains unchanged at 2.4%, slightly above the market expectation of 2.3%, highlighting ongoing concerns about underlying price pressures [3] - The European Central Bank (ECB) has maintained interest rates at 2% for the third consecutive meeting, with President Lagarde noting that the assessment of inflation prospects has not significantly changed, although uncertainties remain high [3] Inflation Trends - The decline in overall inflation is attributed to a slowdown in food price increases and a notable decrease in industrial goods prices, which offset a slight acceleration in service prices [1] - France's inflation rate for October is reported at 0.9%, down from 1.1% in September, driven by a 5.6% drop in energy prices, while food price growth has slowed from 1.7% to 1.3% [4] - Germany's inflation rate for October stands at 2.3%, continuing to exceed the ECB's target, indicating persistent price pressures in the Eurozone's largest economy [5] Divergence Among Member States - There is significant divergence in inflation levels among Eurozone member states, with France consistently below the ECB's target for over a year, while Germany remains above the target [4][5] - The ECB's upcoming quarterly forecast in December will include projections for 2028, potentially reigniting discussions on the need for further monetary policy easing [3]

Group 1 - The core CPI in Tokyo for October increased by 2.8% year-on-year, remaining above the Bank of Japan's inflation target of 2%, which sustains market expectations for a potential interest rate hike in the short term [1] - The Tokyo core CPI, excluding volatile fresh food prices, was higher than market expectations of 2.6%, with a previous value of 2.5% [1] - The Tokyo CPI year-on-year, which excludes both fresh food and energy prices, was reported at 2.8%, also exceeding the September figure of 2.5% [1] Group 2 - Despite consumer inflation being above the 2% target for over three years, the Governor of the Bank of Japan emphasized the need for caution in considering further interest rate hikes due to uncertainties surrounding the impact of U.S. tariff policies on the Japanese economy [1]

Core Viewpoint - The Federal Reserve is expected to announce the end of its balance sheet reduction (QT) during the upcoming meeting, which has led to a decline in the 10-year U.S. Treasury yield below 4.0% for the first time in a year [2]. Summary by Sections Federal Reserve's Balance Sheet Changes - Since March 2020, the Federal Reserve's balance sheet expanded from $4.31 trillion to nearly $9 trillion by April 2022, effectively doubling in size [4]. - The Fed initiated asset purchases in March 2020, announcing a $500 billion increase in Treasury securities [4]. - In December 2020, the Fed committed to purchasing at least $800 billion in Treasury securities and $400 billion in mortgage-backed securities (MBS) monthly [5]. - The tapering of asset purchases began in July 2021, with a gradual reduction in the pace of buying [5]. - The balance sheet reduction started in June 2022, with monthly reductions of $30 billion in Treasuries and $17.5 billion in MBS, increasing to $60 billion and $35 billion respectively by September 2022 [5]. - By March 2025, the reduction pace for Treasuries is expected to slow to $5 billion per month [5]. Reasons for Ending QT - The need to avoid increased market financing costs and tightening liquidity in the overnight money market [7]. - Core inflation has been affected by tariffs and wages, and aggressive rate cuts could exacerbate inflation [7]. - To prevent long-term Treasury yields from rising due to a new round of fiscal expansion [7]. - The U.S. housing market is closely linked to MBS and long-term rates, necessitating a careful approach to avoid destabilizing the housing market [7]. Market Impact of Ending QT - Gold prices are likely to rise due to improved liquidity, alongside declining real interest rates and a weaker dollar [8]. - U.S. Treasury yields are expected to trend downward in the medium to long term, influenced by rate cut expectations [8]. - Overall, the end of QT could support equity valuations due to improved liquidity and lower yield expectations, although it may also lead to increased volatility if interpreted as a reactive policy change [8].

Core Insights - The core inflation rate in the U.S. for September rose less than expected, indicating a potential for the Federal Reserve to continue lowering interest rates next week [1] - The core Consumer Price Index (CPI) increased by 0.2% month-over-month, marking the slowest growth in three months, and rose by 3% year-over-year [1] - The lower-than-expected data may encourage policymakers to consider another rate cut in December, especially in light of the ongoing government shutdown and the inability to release other official data [1]

Group 1 - Eurozone's unemployment rate is expected to remain at 6.2% in August, indicating a strong labor market but with a slowdown in job growth, raising risks of future unemployment increases as labor force expands [2] - Eurozone's inflation rate rose from 2.0% to 2.2% in September, driven by energy price base effects, aligning with expectations and potentially reaffirming the European Central Bank's outlook [3] - The manufacturing PMI in the Eurozone was slightly adjusted from 49.5 to 49.8 in September, indicating weakened manufacturing momentum, with expectations of further economic softening by year-end [3] Group 2 - In the US, the ADP report indicated a decrease of 32,000 private sector jobs in September, significantly below the expected increase of 50,000, suggesting overall labor market weakness [4] - The ISM manufacturing index rose from 48.7 in August to 49.1 in September, slightly above expectations, but production and employment growth were offset by declines in new and export orders [4] - The Swedish manufacturing PMI increased from 55.3 to 55.6 in September, supported by job and new order growth, with no significant impact from tariffs on production plans or supply chains [4][5] Group 3 - Norwegian manufacturing PMI rose from 49.6 to 49.9 in September, indicating a continued moderate slowdown, with mixed data on new orders and improvements in production and employment [5] - European stock markets saw significant gains, with the Stoxx 600 index rising by 1.2%, driven by investor confidence amid US government issues, while the S&P 500 index also reached a historical high [5] - Pfizer and the US government reached an agreement on tariff reductions, benefiting pharmaceutical and biotech stocks, while EU steel manufacturers' stocks rose due to potential cuts in steel import quotas [5]

Core Insights - India's Consumer Price Index (CPI) rose by 2.07% year-on-year in August, marking the first increase in 10 months and up from a revised 1.61% in July, signaling a warning for policymakers [1][2] - Despite the rise, inflation remains within the Reserve Bank of India's target range of 2% to 6%, with food prices showing a significant improvement as the decline narrowed to 0.69% from 1.76% in July [1][2] - Core inflation has increased to nearly 4%, driven by rising prices in services such as healthcare and personal care, indicating underlying economic pressures [1][2] Economic Factors - The normal rainfall in India for the 2025 monsoon season has positively impacted agricultural production, stabilizing vegetable prices and alleviating food inflation risks [2] - Strong demand in the service sector, reflected in the Purchasing Managers' Index (PMI) remaining in expansion territory for 16 consecutive months, is contributing to price rigidity in related services [2] - Input cost pressures from geopolitical factors and supply-demand dynamics are gradually affecting consumer prices, particularly in manufacturing sectors [2] Policy Implications - The moderate rise in inflation reflects a delicate balance between stimulating economic recovery and maintaining price stability, complicating policy decisions for the Indian government and central bank [2] - The core inflation increase and sticky service prices are constraining the central bank's ability to maintain an accommodative monetary policy [2] - The Indian government has announced a new round of tax reforms, which has positively impacted market sentiment and may represent a proactive step in addressing inflation concerns [3] Future Considerations - Key variables to monitor include whether food inflation will reverse with the end of the monsoon season and increased festive demand, and if service sector demand can remain robust amid potential interest rate hikes [3] - The current inflation rebound necessitates careful observation beyond seasonal factors to assess the true inflation landscape in India [3]

Core Insights - U.S. personal consumption expenditures (PCE) in August exceeded expectations, indicating strong consumer resilience [1] - Adjusted for inflation, consumer spending increased by 0.4% for the second consecutive month [1] - The core PCE price index, a key focus for the Federal Reserve, rose by 0.2% from July, with a year-over-year increase of 2.9% [1]

Group 1 - The USD/JPY exchange rate is currently fluctuating between the 10-day and 200-day moving averages, with the latest rate at 148.0100, reflecting a slight increase of 0.01% [1] - The Federal Reserve has entered a rate-cutting cycle, but Powell's hawkish tone has reinforced the resilience of the US dollar [1] - Japan's core consumer price index (CPI) rose by 2.7% year-on-year in August, down from 3.1% in July, marking the slowest growth since November of the previous year [1] Group 2 - The market expects the Bank of Japan to maintain interest rates at its upcoming two-day meeting due to the slowdown in core inflation and domestic political uncertainty [1] - The indicator excluding fresh food and energy showed a year-on-year increase of 3.3%, slightly lower than the previous value of 3.4% [1] - Investors are focused on the policy guidance from Bank of Japan Governor Ueda after the meeting, with a potential 25 basis point rate hike in October still being considered [1] Group 3 - The USD/JPY exchange rate broke through the resistance level of 147.50-147.60 and surpassed the 148.00 mark, indicating a bullish technical outlook [1] - The daily momentum indicators suggest that buying pressure is increasing [1] - Key resistance levels are identified at the 200-day moving average of 148.55-148.60, with potential challenges to the 149.00 and 149.20 levels if broken [2]

Group 1: UK Monetary Policy - The Bank of England maintains the benchmark interest rate at 4%, with a 7:2 vote in favor, indicating a dovish stance among some members who support a 25 basis point cut [2] - The quantitative tightening scale is reduced from £100 billion to £70 billion, effective from October [2] - Inflation remains a concern, with August inflation at 3.8%, nearly double the target, and expected to reach 4% this month [3] Group 2: Japan's Economic Indicators - Japan's core CPI rose by 2.7% year-on-year as of August, still above the Bank of Japan's 2% target, but marking the lowest increase in nine months [3] - The Bank of Japan is expected to keep interest rates stable at 0.5% during its upcoming meeting [3] Group 3: Russia's Tax Policy - President Putin announces tax increases to address budget deficits, raising corporate tax from 20% to 25% starting January 1, 2025, and implementing a progressive personal income tax system [3] - The government plans to increase VAT from 20% to 22% by 2026 to counteract declining energy revenues and rising defense spending [3] Group 4: US Labor Market - Initial jobless claims in the US fell to 231,000, marking the largest drop in nearly four years, exceeding expectations [4] - Despite the decline in initial claims, the number of continuing claims remains above 1.9 million, with the average unemployment duration extending to 24.5 weeks, the longest since April 2022 [4] Group 5: Nvidia and Intel Partnership - Nvidia announces a $5 billion investment in Intel, becoming one of its largest shareholders with over 4% ownership, aimed at joint development of PC and data center chips [6] - Following the announcement, Intel's stock rose by 22.77%, while Nvidia's increased by 3.49% [6] Group 6: Google's AI Integration - Google plans to integrate its self-developed AI model, Gemini, into the Chrome browser, enhancing user experience with features like webpage content explanation and multi-tab information integration [8] - This move is a strategic response to competition from OpenAI and other companies that have recently launched AI browser tools [8] Group 7: Microsoft's AI Data Center Investment - Microsoft announces a $7.3 billion investment in Wisconsin to build two AI data centers, deploying tens of thousands of Nvidia GPUs, significantly enhancing computational power [8] - This investment is seen as a critical step for Microsoft to strengthen its AI infrastructure amid competition from OpenAI and Oracle [8] Group 8: SoftBank's Vision Fund Restructuring - SoftBank confirms a 20% workforce reduction in its Vision Fund, marking the third round of layoffs since 2022 [9] - This restructuring follows a record quarterly investment return of ¥726.8 billion, indicating a strategic shift towards AI investments, including a planned $500 billion project [9] Group 9: Hyundai's Production Strategy - Hyundai adjusts its production strategy in response to US tariffs, lowering its operating profit margin target from 7%-8% to 6%-7% due to a loss of 4.248 billion won from tariffs [10] - The company anticipates a recovery in profit margins by 2027, aiming for 7%-8% and 8%-9% by 2030 [10]

Inflation Data Summary - In August, China's CPI decreased by 0.4% year-on-year, worse than the expected decline of 0.2% and down from the previous month's 0.0%[3] - The PPI fell by 2.9% year-on-year, matching expectations but improving from a previous decline of 3.6%[3] - Core CPI rose by 0.9% year-on-year, marking the highest level in 18 months and continuing to improve for four consecutive months[5] Price Dynamics - Food prices significantly dragged down the overall CPI, with food items declining by 4.3% year-on-year, compared to a 1.6% decline in the previous month[5] - Pork prices saw a substantial drop of 16.1% year-on-year, contributing to the weaker-than-expected CPI data[5] - Service items and industrial consumer goods prices remained stable, with service CPI increasing by 0.6% year-on-year and industrial consumer goods rising by 1.5%[5] PPI Insights - The PPI's month-on-month change stabilized at 0.0%, marking the first halt in decline since November 2024[8] - Upstream prices showed notable stabilization, particularly in black metal mining and smelting, with increases of 2.1% and 1.9% respectively[8] - Downstream industrial product prices showed minimal improvement, with automotive and general machinery PPI declining slightly[8] Future Outlook - The weak August CPI reflects a significant divergence in consumption structure, primarily influenced by high base effects and supply-side factors[6] - There is potential for CPI to gradually recover post high base effects, especially if international commodity prices rebound and domestic policies align[10]