InvestMacro

Yesterday, the Dow Jones (US30) fell by 0.52% on Thursday. The S&P 500 (US500) dropped by 0.28%. The tech-heavy Nasdaq (US100) closed 0.08% lower. Market sentiment worsened due to a government shutdown, which delayed the release of key economic data. This caused investor focus to shift to the upcoming third-quarter earnings reports, offering insight into the state of the economy, and to AI-driven growth. Shares of Apple, Alphabet, Tesla, and Walmart all lost more than -0.7%, while PepsiCo rose by 4.2% after reporting higher-than-expected revenue and profit. Delta Air Lines jumped 4.3% on optimistic guidance, Nvidia added 1.8% after the US approved billions of dollars in chip exports to the UAE, and Costco climbed 3.1% on strong September sales.

The Canadian dollar weakened to a level above 1.400 per US dollar, hitting its lowest level since early April amid a stronger dollar and lower oil prices. In Canada, attention turns to Friday’s official September jobs report, which is expected to show further labor market softening with the unemployment rate rising from 7.1% to 7.2%. This data could provide new insight into the Bank of Canada’s rate-change prospects.

Mexico’s annual inflation accelerated for the second consecutive month, reaching 3.76% in September 2025, up from 3.57% in August, though still within the central bank’s 2-4% target range. Analysts had anticipated a slightly higher figure of 3.79%. Every month, consumer prices rose by 0.23% after a 0.06% increase in August, compared to market estimates of 0.27%.

European equity markets were mostly down yesterday. Germany’s DAX (DE40) gained 0.06%, France’s CAC 40 (FR 40) closed down 0.23%, Spain’s IBEX35 (ES35) fell by 0.60%, and the UK’s FTSE 100 (UK100) closed down 0.41% on Thursday. European stocks fell from record highs on Thursday. European banks lost over 1%, driven mainly by the drop in HSBC, whose shares fell by 4.5% after announcing a proposal to privatize its 63% owned Hong Kong subsidiary, Hang Seng Bank. Luxury and consumer goods stocks also took a hit: Ferrari plunged 15% after slashing its full-year and 2030 forecasts and cutting its electric vehicle sales targets, while LVMH, Hermès, and L’Oréal fell 2.6%, 2.2%, and 1.7%, respectively. Today, the focus was on France as President Macron pledged to name a new Prime Minister within 48 hours following the resignation of Sebastien Lecornu, amid calls to avoid appointing another centrist ally.

The spot price of silver jumped more than 4% to a record high of $51 per ounce, surpassing the previous peak recorded during the Hunt brothers’ market squeeze in 1980, as strong safe-haven demand met limited supply. The precious metal has surged over 70% this year, outperforming gold. This surge is driven by concerns over US financial risks, the possibility of interest rate cuts, questions about the Federal Reserve’s independence, and unsustainable levels of global deficits and debt. A shortage of freely available silver in the London market is providing further support for prices.

The US natural gas prices dropped to around $3.3 per million British thermal units (MMBtu), retreating from an 11-week high following a larger-than-expected inventory build. The US Energy Information Administration reported a storage injection of 80 billion cubic feet (bcf) for the week ending October 3rd, exceeding the forecast of 77 bcf and slightly above last year’s 78 bcf, though below the five-year average of 94 bcf.

Asian markets were mostly up yesterday. Japan’s Nikkei 225 (JP225) rose by 1.77%, China’s FTSE China A50 (CHA50) gained 0.85%, Hong Kong’s Hang Seng (HK50) declined 0.29%, and Australia’s ASX 200 (AU200) posted a positive result of 0.25%.

The Australian economy is performing well with inflation within the central bank’s target range (2-3%) and the labor market remaining resilient, Governor Michele Bullock told a parliamentary committee on Friday. Household consumption is growing, offsetting weaker government demand and supporting growth. Last month, the Reserve Bank left interest rates at 3.6% after three cuts since February. Bullock noted that services inflation remains “sticky” and highlighted global uncertainty, including US protectionist policies, geopolitical tensions, and slowing Chinese demand. However, the worst-case scenarios for tariffs have not materialized.

The Dow Jones (US30) Index ended Tuesday down by 0.20%. The S&P 500 (US500) dropped 0.38%. The technology-heavy Nasdaq (US100) closed lower by 0.67%. The prolonged government shutdown continues to cloud the economic outlook, delaying the release of key data and putting pressure on policymakers to reach an agreement. Indices were also weighed down by a sharp sell-off in Oracle shares following weaker-than-expected reports on cloud segment margins. Tesla fell by 4.4% after presenting a lower-cost Model Y, Ford plunged 7.6% due to a supplier’s fire, and gold futures jumped above $4,000 per ounce as investors sought safe-haven assets. In the absence of new economic data, investors relied on secondary indicators and Federal Reserve statements, which pointed to a potential rate reduction amid the uncertainty.

The US consumer inflation expectations for the coming year rose to 3.4% in September 2025, the highest reading in five months, up from 3.2% in August. Meanwhile, five-year inflation expectations also increased from 2.9% to 3.0%, while three-year expectations remained at 3.0%. Unemployment expectations climbed 2.0 percentage points to 41.1%.

The Ivey Canadian Purchasing Managers’ Index (PMI) surged to 59.8 in September 2025 from 50.1 in August, hitting a 16-month high and beating market expectations of 51.2. The employment level also improved (50.2 vs. 46.0). Canada’s trade deficit widened to C$6.3 billion in August 2025, up from C$3.8 billion the previous month and significantly exceeding market expectations of C$5.6 billion, making it the second-largest trade deficit on record. Exports shrank by 3% month-over-month to C$60.6 billion, the first drop since April, extending a period of volatility that began after the US tariff threat and implementation. In turn, imports grew by 0.9% to C$66.9 billion, driven by a more than 500% surge in purchases of gold, silver, and platinum-group metals, which offset earlier declines this year due to tariff uncertainty.

Equity markets in Europe rose slightly yesterday. Germany’s DAX (DE40) edged up by 0.03%, France’s CAC 40 (FR40) closed higher by 0.04%, Spain’s IBEX35 (ES35) slipped 0.19%, and the UK’s FTSE 100 (UK100) closed up 0.05%.

The US natural gas prices jumped more than 2.5% on Tuesday to $3.45/MMBtu, nearing the 11-week high of $3.476 reached on October 1st, amid a drop in daily production. Output in the US 48 states averaged 106.5 billion cubic feet per day (bcfd) in October, down from September’s 107.4 bcfd and the record high of 108.0 bcfd in August.

Asian markets traded mixed yesterday. Japan’s Nikkei 225 (JP225) edged up by 0.01%, China’s FTSE China A50 (CHA50) and Hang Seng (HK50) did not trade yesterday, and Australia’s ASX 200 (AU200) posted a negative result of 0.27%.

The Reserve Bank of New Zealand (RBNZ) cut the Official Cash Rate (OCR) by 50 basis points to 2.5%, exceeding market expectations for a 25 basis point reduction, bringing the borrowing cost to its lowest level since mid-2022. Policymakers cited persistent spare capacity, subdued domestic activity, and downside risks from cautious household and business behavior that could slow the economic recovery, prompting them to implement a more significant easing. Inflation also remains near the upper bound of the 1-3% target band but is expected to return to the 2% midpoint by mid-2026 as tradable goods pressures ease. The committee remains prepared to ease policy further to anchor inflation near the 2% target.

The Dow Jones (US30) Index ended Monday down by 0.14%. The S&P 500 (US500) gained 0.36%. The technology-heavy Nasdaq (US100) closed higher by 0.78%. Indices continue to rally amid the artificial intelligence boom, despite the US government being in a shutdown for the second consecutive week. AMD shares surged by 23.7% after the announcement of a multi-year deal to supply AI chips to OpenAI, with an option to acquire up to a 10% stake in AMD, fueling optimism for broader M&A activity.

US President Donald Trump stated on Monday that a 25% tariff will be imposed on all medium and heavy-duty trucks imported into the US starting November 1st. Last month, Trump announced that new tariffs would be placed on heavy-duty truck imports starting October 1st for national security reasons, saying the duties were intended to protect manufacturers from “unfair foreign competition.” Under trade agreements with Japan and the EU, the US agreed to a 15% tariff on passenger vehicles, but it remains unclear if this rate will apply to larger vehicles. The Trump administration also allowed manufacturers to deduct the value of US-made components when calculating tariffs on light vehicles assembled in Canada and Mexico.

Equity markets in Europe were mostly lower yesterday. Germany’s DAX (DE40) edged down by 0.01%, France’s CAC 40 (FR40) closed lower by 1.36%, Spain’s IBEX35 (ES35) dropped 0.18%, and the UK’s FTSE 100 (UK100) closed down 0.13%. European stock indices mostly closed lower on Monday as renewed political turmoil in France sparked fresh concerns over financial instability across major Eurozone economies. Markets were shaken by the resignation of Prime Minister Lecornu, as the French parliament remained opposed to spending cuts in the country’s budget, just weeks after he took office and the day after President Macron unveiled a new cabinet. French banks and insurance companies fell sharply as the drop in OATs (French government bonds) put pressure on their balance sheets and raised their liquidity metrics, with BNP Paribas falling 3.5% and AXA dropping 2.5%.

WTI crude oil prices rose by 1.3% to $61.7 per barrel on Monday after OPEC+ agreed to a smaller-than-expected production increase, easing concerns about a significant supply surge. The group announced it would only raise output by 137,000 barrels per day in November, matching the October increase, despite earlier reports of a much larger hike. This restrained decision came amid internal disagreements within the alliance, with Moscow advocating for a moderate increase to protect prices, while Riyadh pushed for a more aggressive expansion to regain market share. Prices were further supported by reports of a fire and a drone attack that led to the shutdown of the Russian Kirishi oil refinery, heightening fears of supply disruptions.

Asian markets traded mixed yesterday. Japan’s Nikkei 225 (JP225) surged 4.75%, China’s FTSE China A50 (CHA50) did not trade yesterday, Hong Kong’s Hang Seng (HK50) fell by 0.67%, and Australia’s ASX 200 (AU200) posted a negative result of 0.07%.

The Nikkei 225 (JP225) Index climbed above 48,200, and the broader Topix Index rose to 3,240 on Tuesday, with both indices hitting new record highs after Sanae Takaichi, a proponent of soft fiscal policy and economic stimulus, won the leadership of the ruling Liberal Democratic Party over the weekend, positioning her as Japan’s next prime minister. Takaichi is expected to press the Bank of Japan to maintain its ultra-easy monetary policy, which is leading to a sharp decline in the yen’s value.

The Australian dollar climbed to around $0.661 on Tuesday, marking its third consecutive session of gains, as markets scaled back expectations for a near-term policy easing by the Reserve Bank of Australia. RBA Governor Michele Bullock recently indicated that rates are likely to remain on hold as persistent consumer spending and inflation, particularly in housing and services, reduce the need for cuts. Investors are now pricing in only a 40% chance of a 25 basis point rate cut in November, down from near-certainty a month ago. On the economic front, the Westpac-Melbourne Institute Index of Consumer Sentiment fell 3.5% month-over-month to 92.1 in October, the steepest contraction since April, reflecting growing household concerns over sustained inflation.

The New Zealand dollar slipped to around $0.584 on Tuesday as investors anticipated looser monetary policy from the Reserve Bank. Markets have fully priced in a 25 basis point rate cut on Wednesday, with growing bets on a more significant 50 basis point reduction. Expectations for deeper easing were supported by weak business sentiment survey results, which suggest the economy may have contracted again in the third quarter, increasing the risk of a renewed recession.