Augur Digest #90 (Flash)

1. Headlines
2. Global Economics
   1. United States
   2. Canada
   3. Europe
   4. Asia-Pacific
   5. Emerging Markets ex China
3. Global Markets
   1. Equities
   2. Fixed Income
   3. FX

Headlines

• The US administration announced new tariffs effective October 1, including a 100 percent tariff on certain imported pharmaceuticals, a 50 percent tariff on kitchen cabinets and bathroom vanities, and a 30 percent tariff on upholstered furniture.
• The probability of a US government shutdown has reportedly increased, as legislative leaders remain at an impasse over the terms of a continuing resolution needed to fund government operations.

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Global Economics

United States

• The core PCE price index met expectations, rising 0.2% M/M and holding steady at 2.9% Y/Y in August. Headline PCE inflation ticked up to 2.7% Y/Y from 2.6% Y/Y, driven by a 0.3% M/M increase.

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Here's our aggregation of core PCE components.

• Personal income growth remained solid in August, beating consensus estimates (act: 0.4% M/M, est: 0.3%).

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• Consumer spending accelerated in August and came in above expectations, rising 0.6% M/M (est: 0.5%).

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• The Federal Reserve’s balance sheet was unchanged at $6.61 trillion for the week ending September 25.

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Canada

• Canada's economy grew by 0.2% M/M in July, beating expectations for a 0.1% expansion. However, the preliminary estimate for August points to flat growth (0.0% M/M), suggesting a loss of momentum.

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• Preliminary data showed Canadian wholesale sales fell in August, reversing the prior month's gain (act: -1.3% M/M, prev: 1.2%).

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Europe

• Spain's final Q2 GDP figures confirmed an acceleration in economic activity, with growth revised up to 0.8% Q/Q (or 3.3% annualized) from 0.6% and 3.1% Y/Y, both beating expectations.

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• Italian consumer confidence improved in September, rising slightly more than expected (act: 96.8, est: 96.5), while business sentiment was unchanged and marginally missed estimates (act: 87.3, est: 87.5).

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• Euro Area consumer inflation expectations for the next 12 months rose to 2.8% in August from 2.6% in July, moving further away from the ECB’s 2% target.

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• The French labor market showed signs of improvement as the number of jobseekers fell in August, reversing a sharp increase from the prior month. Unemployment benefit claims decreased by 11,700, while the total number of jobseekers declined to 3.02 million.

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• Sweden's trade balance swung to a deficit in August from a surplus in July (act: -8.9B, prev: 3.6B), reaching its worst level in nearly three years.

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Asia-Pacific

• Tokyo’s core inflation (ex-fresh food) was 2.5% Y/Y in September, below the 2.8% consensus, while headline inflation was also 2.5% Y/Y. The core-core rate (ex-food and energy) decelerated sharply to 2.5% from 3.0%, largely due to a one-off factor: a new free childcare policy in Tokyo. Excluding this distortion, underlying inflation is estimated to be significantly stronger at around 3.0% Y/Y.

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• Japanese investors continued to purchase foreign bonds last week, though at a slower pace, while foreign investors moderated their selling of Japanese stocks.

• South Korean business confidence was unchanged in September (act: 70, prev: 70), remaining at pessimistic levels.

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• Singapore's industrial production plunged unexpectedly in August, falling 9.7% M/M and 7.8% Y/Y. The results were significantly worse than consensus estimates of -4.6% M/M and -2.5% Y/Y, respectively, signaling a sharp downturn in the manufacturing sector.

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• New Zealand consumer confidence improved in September but remains subdued (act: 94.6, prev: 92.0).

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Emerging Markets ex China

• Brazil’s current account deficit narrowed more than expected in August (act: -$4.7B, est: -$5.4B), helped by a strong trade surplus. Foreign direct investment remained robust, easily beating consensus (act: $8.0B, est: $6.1B). However, the improving headline numbers mask a deteriorating underlying trend; on a 12-month rolling basis, FDI no longer fully covers the current account deficit, signaling increasing external vulnerability due to loose fiscal policy.

• Mexico’s trade deficit widened in August but was much smaller than anticipated (act: -$1.94B, est: -$2.60B). The beat was driven by strong manufacturing exports, although a seventh consecutive monthly decline in capital goods imports points to softening business investment.

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• Bank loan growth in India accelerated slightly in early September (act: 10.3% Y/Y, prev: 10.0%).

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• India's foreign exchange reserves edged down last week (act: $702.57B, prev: $702.97B).

• Consumer confidence in the Philippines improved in the third quarter but remained deeply pessimistic (act: -9.8, prev: -14.0).

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Global Markets

Equities

• The TOPIX Index has reached its 15th all-time high of the year.

• Korea's KOSPI Index sold off by 2.5% today.

• Philippines Stock Exchange PSEi Index registered its fifth consecutive day of losses, closing at the lowest level since April.

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Fixed Income

• US Treasury 5-year yield moved above its 50-day moving average.

• UK 10-year Gilt yield declined for the fifth day.

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FX

• The Canadian dollar has depreciated against USD for five consecutive sessions.

• The New Zealand dollar weakened further against the dollar.

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Disclaimer

Augur Digest is an automatically generated newsletter edited by humans. It may contain inaccuracies and is not investment advice. Augur Labs LLC will not accept liability for any loss or damage as a result of your reliance on the information contained in the newsletter.