At Thursday’s close, the Dow Jones Index (US30) was down 0.14%, while the S&P 500 Index (US500) decreased by 0.21%. The NASDAQ Technology Index (US100) closed negative 0.05%. The US stocks closed slightly lower on Thursday following the release of a sharper-than-expected inflation report, adding to uncertainty over the Federal Reserve’s upcoming rate decision in November.

The US inflation eased to 2.4% in September but exceeded average expectations of 2.3%, halting recent progress on disinflation amid rising housing, transportation, and food prices. Nevertheless, bullish assets received support from a surge in jobless claims, which refuted the view that the US labor market remains too resistant to restrictive interest rates following the release of the latest jobs report. Despite the inflation data, Fed officials are divided on whether to keep cutting rates, with some favoring a pause.

The Canadian dollar weakened to 1.37 per US dollar in October, hitting a nine-week low amid declining foreign exchange inflows and a stronger US dollar. Canada’s trade deficit widened to 1.10 billion Canadian dollars in August, the widest since May. This was helped by a 1.0% drop in exports, particularly a 4.1% drop in shipments of crude oil, the country’s main export. In addition, expectations of softening labor market data due out today fueled speculation of further monetary easing by the Bank of Canada.

Equity markets in Europe mostly fell yesterday. Germany’s DAX (DE40) fell by 0.23%, France’s CAC 40 (FR40) closed down 0.24%, Spain’s IBEX 35 (ES35) lost 0.72%, and the UK’s FTSE 100 (UK100) closed negative 0.07%.

In Europe, reports from the ECB’s last monetary policy meeting in September showed that the ECB wanted to keep options open for the next meetings and took a cautious stance on the next move. The Central Bank is expected to cut interest rates by 25 bps next week, the third cut this year.

WTI crude prices rose by 3.5% to $75.8 a barrel on Thursday amid rising demand for fuel in the US after Hurricane Milton hit Florida, concerns about supply disruptions from the Middle East, and expectations of rising energy demand in the US and China. Hurricane Milton knocked out power to more than 3.4 million homes and businesses, and nearly a quarter of gas stations across the state ran out of gasoline. These outages in one of the world’s largest oil-consuming regions contributed to the price spike. In addition, markets remain choppy, especially after Israel’s defense minister vowed that the response to Iran will be “deadly, precise and unexpected.” Additional pressure on prices comes from weak demand estimates, reinforced by China’s recent briefing, which provided few specifics on additional stimulus measures.

The US natural gas (XNG/USD) prices fell to $2.66/MMBtu, extending their decline from a three-month high of $3, as evidence of high supply reinforced weaker demand caused by hurricanes in the southeastern United States. New data from the EIA showed that natural gas inventories in the lower 48 states rose by 82 billion cubic feet in the week ending October 4, the biggest increase since March, and sharply above market expectations of a 71 billion cubic feet increase. Bearish pressure was also driven by the aftermath of Hurricane Milton on Florida’s Gulf Coast, which forced residential power outages and reduced electricity demand from gas-fired generators.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) was up 0.26%, China’s FTSE China A50 (CHA50) jumped 2.24%, Hong Kong’s Hang Seng (HK50) added 2.98%, and Australia’s ASX 200 (AU200) posted a modest 0.43% gain. Investors are cautiously awaiting the announcement of further stimulus measures from the Finance Ministry’s press conference on Saturday. Markets anticipate that officials will announce a major fiscal stimulus package, which is expected to amount to 2–3 trillion yuan. On Thursday, China’s Central Bank opened a 500 billion yuan swap facility to fund stock purchases by financial institutions as the recent stimulus rally began to fade.

The Bank of Korea cut its benchmark rate by 25 bps to 3.25% at its October meeting, the first cut since May 2020, in line with market estimates. The move brought borrowing costs to the lowest level in nearly two years, reflecting easing inflation, lower economic output, and efforts to curb household debt caused by mortgages.