The Evolution Payroll Seasonality
In last week’s employment report September nonfarm payroll employment increased 254k (223k private), well above the trailing three-month average of 140k (103k private), which raised discussion on the seasonal adjustment.
Euro area: Making progress on disinflation
Progress on Euro area disinflation is undeniable. Headline inflation is now below 2%oya having peaked at 10.6% two years ago. Meanwhile, core inflation is now 2.7%oya, a 3%-pts drop since March 2023.
US: Dollar policy in a second Trump presidency
A recent Bloomberg Businessweek interview with Republican presidential nominee Trump began with an open-ended question: “What kind of economy do you want for the American people in terms of innovation, opportunity and global competitiveness?”
China's 3-Arrows Policy Stimulus
China launched a new round of policy easing in late September, and the comprehensive package beat market expectations. The positive surprise raised market expectations for further stimulus measures.
He’s not leaving
The FOMC cut its target rate by 25bp today, as expected, taking the fed funds range
down to 4.5-4.75%. Chair Powell’s press conference sounded a little dovish to us.
Solid August wage data point to sustained momentum in pay growth
Our forecast for a series of policy rate rises reflects a call that the BoJ will look through volatility in the cyclical activity data to focus on what it terms a “virtuous cycle” between rising wages and higher prices.
Oil Giveth Taketh Away
Tensions in the Middle East drove crude oil prices higher in recent weeks, raising concerns that this shock could boost inflation and dampen global growth.
Greater China VS TRUMP TRADE WAR
The Trump win in the U.S. presidential election significantly increased the external risk faced by the Chinese economy. On our base case scenario that US tariffs on Chinese imports will be hiked to 60% in 1H25, China’s growth outlook will be damaged by around 2%pts
China trump trade cross-hairs
While the broader trade war (10%-20% tariffs on all US imports) will likely be put on hold, tariffs on China are expected to ramp up quickly. The average effective tariff rate on Chinese goods in the 2018-19 trade war was lifted from 3% up to 20%.
