Interest Rate Decisions - The Federal Reserve cut rates by 0.25% [1] - The Bank of Japan kept interest rates steady [1] - The Bank of Canada has cut rates for the second consecutive time [2] - The ECB left rates unchanged, having already cut rates by 2% this year [3] Economic Outlook - The market is pricing in a high probability of a rate cut in December [1] - Signs of a slowing labor market and continued pressure on consumer prices are present [1] - Trade uncertainty is a key driver for the Bank of Canada's rate cuts [2] - Uncertainty about the economic outlook remains elevated across various regions [3] Regional Economic Performance - The Japanese economy has so far weathered the hit from higher US tariffs [1] - Corporate profits, business sentiment, and capex plans are holding up in Japan [1] - The Bank of Canada is dealing with higher than anticipated inflation [2]

Interest Rate Policy - The Federal Reserve (Fed) cut the benchmark lending rate by 0.25 percentage point, setting a new target range of 3.75% to 4% [1] - Two policymakers dissented: one favored a 0.5 percentage point cut, and the other preferred no change [1] - The Fed's administered rates for interest on reserves and the primary credit rate mechanically decreased by 0.25 percentage point [1] Balance Sheet - The Fed will stop redeeming maturing Treasury securities at the end of November [1] - Principal payments will be rolled over going forward [1] - The mortgage cap of $35 billion a month remains in place [1] - As of December 1st, all principal payments on maturing agencies will be reinvested in Treasury bills [1] Economic Assessment - Economic activity has been expanding at a moderate pace [1] - Job gains have slowed this year, and the unemployment rate has edged up but remained low through August [1] - Downside risks to employment rose in recent months, and uncertainty about the economic outlook remains elevated [2] - There is no change to their forward guidance, and the Fed will consider many factors when considering additional adjustments to the target rate [2]

Interest Rate Decisions - The Federal Reserve (Fed) cut the benchmark lending rate by 0.25 percentage point, setting the target range to 3.75%-4% [1] - Two dissents occurred: one favored a 0.5 percentage point cut, and another preferred no change [1] - The Fed's administered rates for interest on reserves and the primary credit rate mechanically decreased by 0.25 percentage point [2] Balance Sheet Adjustments - The Fed will stop redeeming maturing Treasury securities at the end of November, rolling over principal payments going forward [2] - The mortgage cap remains at $35 billion per month, but starting December 1st, all principal payments on maturing agencies will be reinvested in Treasury bills [3] Economic Assessment - Available indicators suggest that economic activity has been expanding at a moderate pace [3] - Job gains have slowed this year, and the unemployment rate has edged up but remained low through August [3] - Downside risks to employment rose in recent months, and uncertainty about the economic outlook remains elevated [4] - There is no change to the Fed's forward guidance; additional adjustments to the target rate will consider many factors [4]

Economic Outlook & Trade Tensions - US-China trade tensions, including export controls and potential tariffs, pose risks to the economic outlook [1] - Asia Pacific growth is forecasted at 45% this year, decreasing to 41% next year, but is subject to downside risks due to trade tensions [2] - Global economic growth is projected at 31% in the baseline scenario, but could be 03% percentage points lower with greater tariffs and supply chain disruptions [3][4] China's Economic Impact - China's exports to the US have declined sharply since 2017-2018, while exports to the rest of Asia, especially ASEAN, have increased [6][7] - Deflationary pressures in China are leading to lower export prices, impacting countries around it, including ASEAN [8][9] - Weak domestic demand in China exacerbates the issue, suggesting that boosting consumption and fixing the real estate sector could alleviate the spillover effects [9][10] Policy Recommendations for China - China provides approximately 4% of policy support every year for priority sectors, including EVs [11] - The report calls for China to scale back such policies and remove trade and investment restrictions to restructure growth and reduce internal and external imbalances [12]

Economic Announcements - The U.S. Jobless Claims for the week are expected to be released with a consensus of 229K for initial claims [2] - The PPI-Final Demand for September is anticipated to rise by 0.3 percent, compared to a decrease of 0.1 percent in the previous month [3] - The Commerce Department's Retail Sales for September is projected to increase by 0.4 percent, down from a 0.6 percent rise in August [3] - The Philadelphia Fed Manufacturing Index for October is expected to be 7.5, a significant drop from 23.2 in the prior month [3] - Business Inventories for August are forecasted to increase by 0.2 percent, consistent with the previous month [4] - The Housing Market Index for October is expected to be 33, slightly up from 32 [4] Federal Reserve Speeches - Fed Governor Michael Barr will discuss 'Stablecoins' at 9.00 am ET [6] - Fed Governor Christopher Waller will address the economic outlook at the Council on Foreign Relations at 9.00 am ET [6] - Fed Vice Chair Michelle Bowman will speak at the Federal Reserve Stress Testing Research Conference at 10.00 am ET [7] - Richmond Fed President Thomas Barkin will present on 'Staying Sanguine About the Horizon' at 4.30 pm ET [7][8] Market Performance - Asian shares finished mostly higher, with Japan's Nikkei average rising by 1.27 percent to 48,277.74 [9] - The Australian benchmark S&P/ASX 200 climbed 0.86 percent to a record closing high of 9,068.40 [10] - In the Asian trading session, gold prices reached above $4,230 an ounce, marking a record run [10]

Market Focus - Powell is scheduled to deliver an 'Economic Outlook' speech on October 14th [2] - The market stream will be live during Powell's speech [1] Economic Indicators & Terms Anticipation - Expectation of "Payroll" being mentioned, with a price target of less than 75 cents [2] - Anticipation of "Inflation" being mentioned more than 35 times [2] - Expectation of no mentions of "Tariff", "Trump", "Rate Cut", "AI / Artificial Intelligence", "Recession / Depression", or "Pardon Me / Sorry" [2]

Sentiment among US small businesses fell in September to a three-month low on less optimism about the economic outlook and greater concern about excess inventory https://t.co/wMXGWXNUcv ...

Monetary Policy - Fed Chair Powell is scheduled to speak on Economic Outlook and Monetary Policy at 12:20 P.M ET [1] - The market is anticipating whether Powell will mention potential rate cuts [1]

Economic Outlook Speech Focus - Payroll data is likely to be mentioned, mirroring previous speeches where it was highlighted [1] - Consumer spending is expected to be acknowledged due to its relevance to the economy [1] Topics Unlikely to be Addressed - A "Pardon Me / Sorry" remark is not anticipated, as it was a one-off occurrence [1] - A rate cut is unlikely to be discussed, as the Economic Outlook focuses on the overall economy, unlike FOMC meetings [1] - Artificial Intelligence (AI) is not expected to be a primary topic, as it is typically addressed during Q&A sessions [2]

Core Insights - The GEP Global Supply Chain Volatility Index showed little change in September, indicating that global supply chains are still operating below full capacity [1][4] - Chinese factories reported a significant increase in purchasing, leading to a rise in global manufacturing procurement activity, while North American supply chains faced challenges due to tariff-related delays and economic concerns [2][7] - European supply chains remained underutilized, with manufacturers in key countries reducing purchasing and stockpiles, marking the weakest activity level since March [3][8] Regional Key Findings - **Asia**: Chinese manufacturers increased purchasing sharply in September, resulting in the busiest level for Asia's supply chains since June 2022 [7][8] - **North America**: Manufacturers were hesitant to stockpile further due to economic outlook concerns, with tariff-related disruptions impacting manufacturing activity [8] - **Europe**: Supply chain activity in Germany, France, and Italy declined, leading to a six-month low in the region's index [8] Demand and Inventory Trends - September saw a revival in factory purchasing, particularly in Asia, driven by increased demand in China [8] - The frequency of global manufacturers stockpiling due to price or supply fears decreased, indicating reduced concerns about inflation or item availability [8] - Global supply shortages tracker showed a decrease, suggesting robust item availability for manufacturers [8][14] Transportation and Labor Insights - Global transportation costs remained in line with historically normal levels during September [14] - Staffing capacity was not a constraint for global manufacturers, with reports of backlogs due to labor shortages falling below the long-term average [14]