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Eurozone PPI down -0.6% mom in Step, led by energy prices

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    ActionForex.com
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    Eurozone’s PPI decreased by -0.6% mom in September, slightly exceeding the expected decline of -0.5% mom. On an annual basis, PPI fell by -3.4% yoy, marginally less than the anticipated -3.5% yoy drop.

    The monthly decline in Eurozone PPI was primarily driven by a significant -1.9% mom decrease in energy prices. Intermediate goods prices remained stable, while capital goods saw a slight decrease of -0.1% mom. In contrast, prices for both durable and non-durable consumer goods increased by 0.2% mom.

    Across the broader EU, PPI also dropped by -0.6% mom and -3.3% yoy. Among member states, Estonia, Spain, and Romania led the monthly declines with falls of -3.6%, -2.4%, and -2.2%, respectively, while Ireland recorded a significant 4.8% increase, followed by Finland and Greece with more modest gains of 1.0% and 0.7%.

    Full Eurozone PPI release here.

    Eurozone PMI services finalized at 51.6, PMI composite at 50.0

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      ActionForex.com
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      Eurozone PMI Services for October was finalized at 51.6, up from September’s 51.4. PMI Composite also moved to 50.0 from 49.6, indicating stagnation rather than expansion across the region. The services sector continues to play a vital role in keeping Eurozone’s economy afloat, yet concerns of a Q4 contraction remain.

      Spain topped the Eurozone with PMI Composite of 55.2, while Ireland followed at 52.. Italy’s index reached 51.0, a four-month high. Meanwhile, Germany’s reading improved to 48.6, still in contraction but at a three-month high. France recorded an eight-month low of 48.1.

      Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, remarked, “The modest expansion of the services sector has been crucial in keeping the currency union out of recession.” He highlighted that declining inflation and higher wages are likely bolstering consumer spending, which sustains demand in services. However, de la Rubia pointed out that their GDP Nowcast for Q4 indicates a “slight contraction” in overall Eurozone output.

      De la Rubia also noted that structural issues, such as labor shortages which exert upward wage pressures, continue to keep inflation elevated. “The ECB will find it “difficult, if not impossible”, to achieve the 2% inflation target in a sustainable manner in this environment,” he added.

      Full Eurozone PMI services final release here.

      BoJ minutes: Yen stabilization gives time to monitor global economic risks

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        ActionForex.com
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        Minutes from BoJ’s September meeting reveal a careful stance on monetary policy amid global economic uncertainties. At the meeting, BoJ kept its interest rate steady at 0.25%.

        Regarding future direction of monetary policy, members broadly agreed that if Japan’s economic and inflation outlook aligns with their projections, the Bank would “continue to raise the policy interest rate” and gradually adjust its level of monetary accommodation.

        The minutes also underscore the need for “high vigilance” given uncertainties in overseas economies, particularly in the US, and ongoing volatility in global financial markets.

        Some members pointed out that recent retracements in Yen’s depreciation have moderated upside risk to inflation from import prices. Given this development, they noted that the Bank has “enough time” to evaluate the effects of global economic shifts and recent policy rate hikes before deciding on further moves.

        Full BoJ minutes here.

        Japan’s PMI services finalized at 49.7, first contraction since Jun

          By
          ActionForex.com
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          Japan’s services sector slipped into contraction in October, with PMI Services index finalized at 49.7, down from September’s 53.1 and marking its first contraction since June. PMI Composite also declined to 49.6 from 52.0, signaling a contraction in private sector activity for the first time in four months and the lowest reading since November 2023.

          According to Usamah Bhatti, Economist at S&P Global Market Intelligence, the services sector’s performance “came to an abrupt halt” at the start of Q4. While the decline was modest, it was driven by a notable slowdown in new business inflows, particularly in export orders. Despite the dip, businesses maintained a positive outlook, though optimism weakened to its lowest in over two-and-a-half years, with companies citing concerns over labor shortages as a key factor.

          The services sector slowdown, combined with a continuing contraction in manufacturing, contributed to the steepest private sector contraction in nearly a year. New order inflows stagnated, particularly impacted by weakened demand in manufacturing order books. Business sentiment, overall, has also softened, with optimism now at its lowest since January 2021.

          Full Japan PMI services final release here.

          NZ employment falls -0.5% in Q3, unemployment rate rises to 4.8%

            By
            ActionForex.com
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            New Zealand’s labor market showed signs of cooling in Q3, with employment falling by -0.5% qoq, in line with expectations. Unemployment rate rose from 4.6 to 4.8%, slightly better than the anticipated 5.0%, but still indicative of softening labor conditions.

            Labor force participation rate also declined, dropping from 71.7% to 71.2%, while the employment rate slipped from 68.4% to 67.8%, reflecting fewer people actively engaged in the workforce.

            On the wage front, growth showed deceleration. The labor cost index, which includes salary and wage rates with overtime, rose by 3.8% yoy, down from the previous quarter’s 4.3% yoy increase.

            The slowdown in wage growth suggests some relief in wage-driven inflation pressures, which could factor into RBNZ’s upcoming rate cut.

            Full New Zealand employment release here.

            BoC minutes reveals strong consensus for aggressive rate cut

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              ActionForex.com
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              Summary of BoC Governing Council’s October 23 meeting highlights a decisive stance among members to prioritize growth through an aggressive 50bps rate cut. While members initially discussed the possibility of a modest 25bps cut, a “strong consensus” emerged in favor of a larger reduction to counter economic headwinds.

              The Governing Council members expressed “increasingly confident” that inflationary pressures are expected to ease, reducing the need for a restrictive policy stance. Some members voiced concern that an unusual 50bps cut might be perceived as a signal of “economic trouble.” Despite this, they agreed that a more substantial cut was justified, given the “ongoing softness” in the labor market and the need to bolster growth to “absorb excess supply” in the economy.

              Full BoC minutes here.

              US ISM services rises to 56.0, employment jumps to 53

                By
                ActionForex.com
                -

                US ISM Services PMI rose to 56.0 in October, up from 54.9 in September and surpassing the forecast of 53.3. This is the index’s highest reading since July 2022, reflecting robust growth in the services sector and a resilient economy despite broader global uncertainties.

                Breaking down the components, business activity eased slightly to 57.2 from 59.9, while new orders also dipped to 57.4 from 59.4. Employment, however, saw a significant increase, jumping from 48.1 to 53.0, indicating solid hiring activity within the services sector. On the pricing front, prices fell to 58.1 from 59.4, suggesting a slight moderation in input costs.

                According to historical correlations, the October reading of 56.0 in Services PMI aligns with 2.3% annualized increase in real GDP.

                Full US ISM services release here.

                UK PMI services finalized at 52.0, sector slows on policy uncertainty

                  By
                  ActionForex.com
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                  UK PMI Services as finalized at 52.0, down from September’s 52.4 and marking the lowest level since November 2023. PMI Composite similarly slipped to 51.8, a decline from 52.6 the previous month, also the lowest since last November.

                  According to Tim Moore, Economics Director at S&P Global Market Intelligence, the delay in policy clarity ahead of the Autumn Budget created a “wait-and-see” atmosphere, dampening business confidence and spending. Added to this were broader geopolitical uncertainties and anticipation of the US election, both contributing to businesses holding back on investment decisions.

                  Higher wages contributed to another month of strong input cost inflation, which rose to a three-month high but remained lower than in early 2024. Nevertheless, Moore noted that output charge inflation stayed near the 43-month low observed in September, continuing the “longer-term trend of decelerating price pressures”.

                  Full UK PMI services final release here.

                  RBA stands pat, still not ruling anything in or out

                    By
                    ActionForex.com
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                    RBA maintained its cash rate at 4.35% today, as expected, while underscoring that inflation risks remain a concern. In its statement, RBA noted that although headline inflation has declined and is projected to stay lower in the short term, it considers underlying inflation as “more indicative” of inflation trends, and this measure remains “too high.”

                    In line with this cautious approach, the emphasized the need to remain “vigilant to upside risks to inflation,” signaling flexibility by reiterating that it is “not ruling anything in or out.” The ’s latest economic projections offer a more tempered outlook, with slight downward adjustments to growth and inflation forecasts, pointing to persistent caution amid moderated expectations.

                    Key revisions in the RBA’s projections include:

                    • Year-average GDP growth: 2024 unchanged at 1.2%, but lowered for 2025 from 2.5% to 2.2% and for 2026 from 2.4% to 2.3%.
                    • Year-ended CPI: Forecast for December 2024 is revised down from 3.0% to 2.6%, with December 2025 held steady at 3.7%, and December 2026 slightly reduced from 2.6% to 2.5%.
                    • Trimmed mean inflation: Forecast for December 2024 lowered from 3.5% to 3.4%, with additional downgrade for December 2025 from 2.9% to 2.8%, and December 2026 from 2.6% to 2.5%.

                    These adjustments reflect an outlook of moderated economic growth and slightly eased inflation pressures. However, RBA’s flexible stance indicates it is prepared to act if inflation risks become more pronounced, balancing economic stability with its inflation objectives.

                    Full RBA statement here.

                    Full RBA SoMP here.

                    China’s Caixin PMI composite rises to 51.9, policy impact begins to show

                      By
                      ActionForex.com
                      -

                      China’s Caixin Services PMI rose to 52.0 in October, surpassing expectations of 50.5 and marking the highest rate of growth in three months. The services sector continues its expansionary streak that began in January 2023. PMI Composite also increased from 50.3 to 51.9, its highest level in four months, maintaining expansion for the 12th consecutive month, driven largely by service-sector resilience.

                      Wang Zhe, Senior Economist at Caixin Insight Group noted that challenges noted that a range of supportive policies has since been introduced by the Politburo since September. The recent Caixin PMI readings for both manufacturing and services suggest that “market demand stabilized and optimism improved,” signaling early effects of the new policies.

                      Full China Caixin PMI services release here.

                      Eurozone Sentix investor confidence rises slightly to -12.8, inflation fears resurface

                        By
                        ActionForex.com
                        -

                        Eurozone Sentix Investor Confidence index showed modest improvement, rising from -13.8 to -12.8 in November, though it fell just short of the anticipated -12.7. Current Situation index also moved up slightly from -23.3 to -21.5, while the Expectations index held steady at -3.8.

                        Sentix noted that Germany continues to be the “problem child” of the Eurozone, with ongoing economic struggles that have drawn widespread media attention. However, investors remain largely unfazed by these issues, showing limited reaction to the concerns surrounding Germany’s economic policy.

                        Meanwhile, inflationary concerns have re-emerged, with Sentix highlighting a significant drop in its “Inflation” theme barometer from +11 to -12.25—the lowest reading since July 2023.

                        This slump underscores a difficult situation for ECB. A struggling economy would typically benefit from more accommodative monetary policy, but inflationary pressures could restrict the ECB’s ability to cut rates further.

                        Full Eurozone Sentix release here.

                        Eurozone PMI manufacturing finalized at 46 in Oct, intense competition pressures margins

                          By
                          ActionForex.com
                          -

                          Eurozone manufacturing showed mild signs of stabilization in October, with PMI Manufacturing index finalizing at 46.0, up from September’s 45.0. This marks a slight improvement, but activity remains firmly in contraction.

                          By country, Spain led the group with a PMI Manufacturing of 54.5, a 32-month high, followed by Ireland at 51.5 and Greece at 51.2. In contrast, the Netherlands and Austria reported significant declines, with PMIs at 47.0 and 42.0 respectively. Germany saw a modest rise to 43.0, marking a three-month high but still in contraction territory, while France’s index held steady at 44.5, a two-month low.

                          Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, commented that while the manufacturing recession “did not deepen further” in October, challenges persist. Production and new orders both declined at a slower rate, leading to a Q4 GDP nowcast indicating a -0.1% contraction in industrial output.

                          The environment remains “deflationary,” benefiting purchasing departments with lower input costs but intensifying competitive pressures, particularly with firms passing on price reductions to customers. De la Rubia noted that this “fierce competition,” likely amplified by competition from China, is squeezing profit margins across the sector.

                          Full Eurozone PMI manufacturing final release here.

                          Oil prices edge up as OPEC+ delays output increase

                            By
                            ActionForex.com
                            -

                            Oil prices saw a modest uptick during the Asian session following OPEC+’s announcement to delay a planned increase in oil production of 2.2 million barrels per day by one month. On Sunday, the group also reiterated the members’ “collective commitment to achieve full conformity” with the established output targets.

                            This adjustment comes as part of OPEC+’s broader strategy, which agreed in June, to gradually restore output in controlled monthly increments after significant cuts over the past two years. Before Sunday’s decision, the plan was to start unwinding the 2.2 million bpd cut beginning December 2024, with further increases scheduled into the next year.

                            Technically, for the near term, considering bullish convergence condition in 4H MACD, WTI could have formed a short term bottom at 67.14. Break of 72.85 resistance will support this case and bring stronger rally back towards 78.87 resistance, as part of the sideway pattern from 65.63 low.

                            Nevertheless, there is no clear sign that the down trend from 87.84 has completed. As long as 78.87 resistance holds, another fall through 65.63 is still in favor after the consolidation pattern from there completes.

                            RBNZ flags geopolitical risks as key threat to New Zealand’s financial stability

                              By
                              ActionForex.com
                              -

                              RBNZ highlighted significant geopolitical risks as a major concern for New Zealand’s financial stability in a pre-release of findings from its upcoming Financial Stability Report. Key threats stem from global tensions involving Russia, China, and the Middle East, which RBNZ may incorporate into next year’s solvency stress test.

                              RBNZ noted that in some scenarios, “global supply chains were disrupted,” triggering renewed inflationary pressures and elevated interest rates. The report mentions a “more extreme scenario” involving a conflict in the Asia-Pacific region with one or more of New Zealand’s key trading partners. This may allude to risks of a major disruption if China attempts to assert territorial claims in the South China Sea or to use force in the Taiwan Strait.

                              Kerry Watt, RBNZ’s Director of Financial Stability Assessment & Strategy, commented on the increased “concern about geopolitical tension,” emphasizing that “as a small open economy, dependent on international trade and investment, geopolitical risks are clearly relevant to our financial system. Their potential impacts cannot be underestimated.”

                              Full RBNZ release here.

                              US ISM manufacturing falls to 46.5, prices surge

                                By
                                ActionForex.com
                                -

                                US ISM Manufacturing PMI declined from 47.2 to 46.5 in October, falling short of the expected 47.6 and marking its lowest level since July 2023. This contraction is the index’s 23rd in the past 24 months.

                                Key components showed mixed results: new orders ticked up slightly from 46.1 to 47.1, but production dropped sharply from 49.8 to 46.2. Employment remained subdued, inching up only marginally from 43.9 to 44.4, while the prices index saw a notable increase from 48.3 to 54.8, suggesting upward cost pressures.

                                According to ISM, “demand remains subdued,” as firms remain hesitant to invest in capital and inventory, largely due to uncertainties surrounding Fed’s monetary policy and concerns about inflation resurgence driven by fiscal policies from both major parties. October’s reading aligns with a modest 1.1% annualized growth in real GDP.

                                Full US ISM manufacturing release here.

                                US NFP grows only 12k in Oct, unemployment rate steady at 4.1%

                                  By
                                  ActionForex.com
                                  -

                                  US non-farm payroll employment grew only 12k in October, well below expectation of 106k. That compares to average monthly gain of 194k over the prior 12 months.

                                  Nevertheless, unemployment rate was unchanged at 4.1%, matched expectations. number of unemployed people was little changed at 7.0m. Participation rate ticked down from 62.7% to 62.6%.

                                  Average hourly earnings rose 0.4% mom, above expectation of 0.3% mom. Annual growth of average hourly earnings ticked up from 3.9% yoy to 4.0% yoy.

                                  Full US NFP release here.

                                  UK PMI manufacturing finalized at 49.9, wait-and-see ahead of budget

                                    By
                                    ActionForex.com
                                    -

                                    UK’s PMI Manufacturing was finalized at 49.9 for October, down from September’s 51.5, marking the first contraction since April.

                                    Rob Dobson, Director at S&P Global Market Intelligence, noted that the sector has entered Q4 on an “uncertain footing,” as businesses adopt a wait-and-see approach amid policy speculation leading up to the recent Budget. This cautious stance has weighed on investment and spending, with business optimism hovering just above September’s nine-month low.

                                    However, there was positive news on inflation. Input costs dropped to a 10-month low, with inflation easing significantly—one of the largest declines in the survey’s 33-year history. Selling price inflation also moderated, giving BoE additional flexibility to support growth should demand weaken further.

                                    Looking forward, Dobson noted that November’s PMI release will be closely watched for signs of how the Budget impacts business conditions and confidence level.

                                    Full UK PMI manufacturing final release here.

                                    Swiss CPI down further to 0.6% yoy in Oct

                                      By
                                      ActionForex.com
                                      -

                                      Switzerland’s CPI decreased by -0.1% mom in October, missing expectations of flat growth. Core CPI, which excludes fresh and seasonal products, energy, and fuel, edged up by 0.1% mom. Prices for both domestic and imported products each declined by -0.1% month-over-month.

                                      On an annual basis, headline CPI dropped to 0.6% yoy from 0.8% yoy, falling short of the anticipated 0.8% yoy increase. Core CPI similarly softened, slipping from 1.0% yoy to 0.8% yoy. Domestic product prices grew at a slower pace, declining from 2.0% yoy to 1.8% yoy, while imported product prices saw a deeper contraction, from -2.7% yoy to -3.1% yoy.

                                      Full Swiss CPI release here.

                                      Distorted NFP data to challenge Dollar’s strength

                                        By
                                        ActionForex.com
                                        -

                                        US non-farm payrolls report takes center stage in global financial markets today. Expectations are for an increase of 106k jobs in October, which would mark the lowest monthly gain in nearly four years. Unemployment rate is projected to remain unchanged at 4.1%, and average hourly earnings are anticipated to rise by 0.3% mom. However, given one-off factors like recent strikes and storms impacting the numbers, markets may largely discount the report’s implications for the broader employment trend.

                                        Recent economic indicators offer a mixed picture. ADP Employment report showed a robust gain of 233k net new jobs in October, up from the previous month’s upwardly revised 159k. Conversely, the four-week moving average of initial unemployment claims increased to 236k from 224k, suggesting some softening in the labor market. The employment components of the ISM manufacturing and services reports are yet to be released.

                                        Regarding the Fed’s policy outlook, two additional 25 basis point rate cuts are expected by year-end, one this month and another in December. Under the Fed’s dual mandate, resurgence in inflation—not strong employment data—is more likely to prompt a slowdown or pause in the rate-cutting cycle. Even a significant downside surprise in today’s NFP report is unlikely to bring a 50bps cut back into consideration at the next meeting. However, it would factor into Fed’s deliberations in December, alongside upcoming inflation and employment data.

                                        Technically, Dollar Index could have formed a short term top at 104.63 already. Nevertheless, consolidations should be relatively brief as long as 23.6% retracement of 100.15 to 104.63 at 103.57 holds. Break of 104.63 will resume the rally from 100.15 towards 106.13 resistance next.

                                        However, firm break of 103.57 will open up deeper correction to 38.2% retracement at 102.91, which is close to 55 D EMA (now at 102.86).

                                        Sterling drops as market questions growth impact of Reeves’ budget

                                          By
                                          ActionForex.com
                                          -

                                          Sterling fell sharply overnight, alongside with 10-year government bond and FTSE, as markets reacted to Chancellor Rachel Reeves’ new budget. Critics argue the budget is being heavy on spending, tax hikes, and borrowing but light on measures to stimulate economic growth. Beside, the higher short-term borrowing plans outlined in the budget are casting doubts on whether BoE can proceed with a robust rate-cutting cycle.

                                          The Office for Budget Responsibility revised its economic outlook, forecasting GDP growth of 2.0% in 2025, only a slight improvement over the previous 1.9% projection. Additionally, the OBR raised its inflation forecast for next year to an average of 2.6%, up sharply from the previous estimate of 1.5%.

                                          Although BoE is still expected to implement a 25 bps rate cut next week, taking the rate to 4.75%, the budget’s spending and borrowing plans may limit the central bank’s ability to lower rates further. Market pricing now reflects fewer anticipated rate cuts, with expectations that the BoE’s base rate will only fall to around 4% by the end of 2025, higher than previously projected.

                                          While a slower pace of monetary policy easing could be supportive of the Pound, traders are increasingly worried about the UK’s growth prospects under the new fiscal strategy.

                                          Technically, EUR/GBP’s break of 0.8433 resistance should confirm short term bottoming at 0.8294, on bullish convergence condition in D MACD. Stronger rally should be seen to 55 W EMA (now at 0.8502) Decisive break there will be the first sign of medium term bullish trend reversal, and target 0.8624 resistance for confirmation.

                                           

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