Macro Softer US employment and inflation data shifted expectations towards later Fed tightening, while European fiscal stress intensified. The implied probability of an October hike fell from approximately 64% to 23% over the week, although markets still priced roughly one additional 25bp increase by December. September payrolls rose just 29k against 90k expected, with downward revisions bringing the three-month average to 51k. Nevertheless, unemployment at 4.2% remained within its recent…

Macro Stronger US activity reduced near-term slowdown risks while making the inflation challenge harder to resolve. September’s flash composite PMI rose to 58.4 from 56.0, with manufacturing and services both strengthening alongside new orders and employment. Business investment provided supporting evidence: August core capital goods orders increased 1.6% month-on-month and shipments rose 0.6%, suggesting the improvement extends beyond surveys. Initial jobless claims below 200,000 also indicated limited deterioration in employment.…

Macro The Fed delivered the long-awaited return to tightening, reinforcing confidence that persistent inflation would ultimately take precedence over political pressure for lower rates. The widely anticipated 25bp hike to 3.75–4.00% was the first increase since 2023 and, more importantly, received unanimous FOMC support, strengthening the signal of institutional independence. The economic justification had broadened beyond the energy shock: August core CPI rose 0.3% MoM and 2.4% YoY, while retail…

Macro The Middle East energy shock moved from geopolitical risk premium toward physical supply disruption this week, while global activity remained surprisingly resilient. Brent rose 8.65% Friday-to-Friday from $96.28 to $104.61/bbl and reached $109.97 intraday, while WTI gained 9.37% to $100.05. Iranian exports remain a fraction of their pre-war 1.5-1.7 mb/d level, Saudi Arabia closed the East-West pipeline after drone attacks from Iraq, Hormuz remains under active military contest, and…

Macro Global growth remained resilient, led by a renewed acceleration in US activity, but the underlying labor data were firm rather than unequivocally inflationary. US payrolls increased by 162,000 in August against 55,000 expected, unemployment held at 4.1%, participation rose to 61.6% and average weekly hours increased to 34.4. Average hourly earnings advanced 0.27% month-on-month and 3.09% year-on-year, showing no renewed wage acceleration. Hiring was concentrated: food services added 59,000…

Macro The US growth-inflation mix deteriorated at the margin, although the apparent stickiness in PCE may overstate underlying inflation pressure. Core PCE rose to 3.34% YoY and headline PCE to 3.70%, while real consumption was flat, retail sales fell 0.6% MoM and Chicago PMI dropped to 47.1. However, core PCE is now 88bps above core CPI, largely because PCE contains a small number of unusually large price increases: the gap…