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In August, the wording was that: The Japanese economy is recovering at a moderate pace, while the effects caused from the US trade policies and so on are seen in some areas.

In September, that is changed ever so slightly to: The Japanese economy is recovering at a moderate pace, while the effects caused from the US trade policies are seen mainly in the automotive industry.

That reflects their concerns on auto tariffs by the US more than anything else. Besides that, the report shows a better view on the outlook for consumer spending as the government notes that private consumption is showing movements of picking up. That’s the first time that they raised the view on that since August 2024.

At the same time, they also lifted their view on capital spending since March 2024 noting that it is seen picking up moderately.

The full report can be found here.

This article was written by Justin Low at investinglive.com.

• Prior -15.5
• Economic confidence 95.5
• Prior 95.2; revised to 95.3
• Industrial confidence -10.3
• Prior -10.3; revised to -10.2
• Services confidence 3.6
• Prior 3.6; revised to 3.8

Economic confidence continues to hold steady and the overall outlook towards the end of Q3 is still one that is affording the ECB much flexibility in keeping their policy options open. For now, the central bank is comfortable in pausing and that’s the name of the game as we look to the winter months as well.

This article was written by Justin Low at investinglive.com.

• Prelim was 55.4
• Prior was 58.2
• Current conditions 60.4 vs 61.2 prelim
• Expectations 51.7 vs 51.8 prelim
• 1 year inflation 4.7% vs 4.8% prelim
• 5 year inflation 3.7% vs 3.9% prelim

This is a dovish bent but the UMich survey is rarely a market mover these days accounting to extreme politicization in the survey responses.

This article was written by Adam Button at investinglive.com.

Political change is hard to predict but at the moment, anti-immigration sentiment is rising globally. Trump leaned into that theme this week at the UN when he said that countries are “going to hell” over immigration policy.

Today, Trump’s Department of Transportation immediately restricted who can obtain non-domiciled Commercial Driver’s Licenses. The government estimates that 200,000 current non-domiciled US commerical driving licence holders may lose licence eligibility and that only 6000 renewals are expected annually under the new rules.

Last week, we saw a severe restriction on H1-B visas.

This is part of a clear, broader strategy of deportation and limiting immigration. Ultimately, it will limit US population growth or lead to a decline but will maintain a tight jobs market. Between this and AI-related disruption, there will be a slow loss in US jobs but unemployment may not rise.

I don’t think that’s a path to GDP growth but it should ensure a standard of living for Americans. The tougher question to answer is whether it’s inflationary. Stephen Miran argues that the drop in population is deflationary for housing prices and that’s intuitive but it’s also inflationary for labor costs and greatly diminishes capacity.

I think it’s also hard to say whether other countries copy this strategy and if it will erode the long-term dynamism of the US economy. For now, the thing to realize is that it’s happening and that it will continue at least for the remainder of Trump’s term.

Today, Richmond Fed President Thomas Barkin said that the monthly breakeven jobs rate in the US is now flat to +50,000. Citadel founder Ken Griffin said something similar yesterday. I’d argue it can be -100K in the years ahead with unemployment still staying low. That will be a very difficult set of circumstances for traders and policymakers to navigate. My guess is that they cut too much into it and plant the seeds of serious inflation.

This article was written by Adam Button at investinglive.com.

• Prior +2.7%
• HICP +3.0% vs +3.0% y/y expected
• Prior +2.7%

The headline estimates might be a little higher than in August but core annual inflation is seen easing just a touch from 2.4% to 2.3%. So, the ECB can take comfort in that but they won’t quite feeling the urgency just yet unless we see more positive signals on prices in the likes of Germany especially.

This article was written by Justin Low at investinglive.com.

The main agenda of the gathering will be discussing the draft of China’s next five-year plan, which will involve everything and anything related to the country’s economic, political, and social goals.

For some context, China’s 14th five-year plan is currently in its final year and so the 15th one will cover the period of 2026 to 2030. This plan will have to be endorsed by a plenary session before being submitted to the annual legislative session in March next year for final approval. It’ll be interesting to see if we do get any mentions on how they want to approach the trade conflict with the US, besides the domestic stuff that is.

This article was written by Justin Low at investinglive.com.

This week has been something of a gamechanger in the mood around the US economy as several reports beat estimates. That change has been underscored by the latest update from the Atlanta Fed, whose GDPNow Q3 tracker is up to 3.9% from 3.3%.

After recent releases from the US Census Bureau, the US Bureau of
Economic Analysis, and the National Association of Realtors, a decrease
in the nowcast of third-quarter real gross private domestic investment
growth from 6.4 percent to 4.1 percent was more than offset by increases
in the nowcast of third-quarter real personal consumption expenditures
growth from 2.7 percent to 3.4 percent and the nowcast of the
contribution of net exports to third-quarter real GDP growth from 0.08
percentage points to 0.58 percentage points.

It’s still early in the quarterly cycle for Q3 but this is the highest reading so far.

This article was written by Adam Button at investinglive.com.

WTI crude oil prices are up 0.70 cents and they have been bid all week, in part because of reports suggesting that Russia is losing oil exporting capacity due to drone attacks.

The Kremlin could have much bigger problems ahead if this latest WSJ report is true:

President Trump told Ukrainian President Volodymyr Zelensky he was open to lifting restrictions on Ukraine’s use of American-made long-range weapons to strike inside Russia, but he didn’t commit to doing so during a meeting Tuesday, according to a senior U.S. official and a Ukrainian official.

During the sideline discussion at the United Nations, Zelensky asked Trump for more long-range missiles and approval to use such weapons to strike targets on sovereign Russian territory. Trump replied that he did not oppose the idea, though both officials said the president didn’t make any commitments to reverse a U.S. ban on such attacks.

Now I strongly suspect this isn’t a true leak but is being put out there to pressure Russia to negotiate. But that doesn’t mean it’s not a real threat.

Zelensky asked for Tomahawk missiles with a range of 2400 km. They are also highly accurate systems that could be used to hit energy infrastructure, which appears to be the west’s strategy in economically defeating Russia.

This article was written by Adam Button at investinglive.com.

The White House is saying:

• Latest pharmaceutical tariff standpoint countries with negotiated trade deals

Whoops.

Trump posted last night that 100% tariffs on every possible product unless the company pledges to build its manufacturing plant in America.

This article was written by Greg Michalowski at investinglive.com.

Major European indices had a solid day led by Spain’s Ibex which rose by 1.3%. Other major indices were up by 0.77% or more:

• German DAX, +0.87%
• France’s CAC +0.97%
• UK’s FTSE 100 +0.77%
• Spain’s Ibex +1.3%
• Italy’s FTSE MIB +0.96%

US stocks have pushed into positive territory with the NASDAQ index leading with a gain of 0.06%:

• Dow industrial average +0.59%
• S&P index +0.34%
• NASDAQ index +0.06%

At session lows, the NASDAQ index successfully tested its 100 hour moving average giving the buyers some hope from a technical perspective (see post here).

A look around other markets shows:

• Crude oil is up $0.93 at $65.90.
• Gold is up $26.50 or 0.70% at $3775.23.
• Silver is up $0.99 or 2.21% at $46.16. That is a new high going back to 2011.
• Bitcoin is up $370 at $109,400.

This article was written by Greg Michalowski at investinglive.com.

A quiet data calendar for the session here. The data from Japan is unlikely to move markets around too much at all upon release.

As a heads up, New Zealand clocks were wound forwards and hour for daylight saving time over the weekend.

This article was written by Eamonn Sheridan at investinglive.com.

Trump firing the head of the BLS after a poor jobs report was a major warning sign for the quality of upcoming economic data, but that’s not the only problem with non-farm payrolls right now.

A fresh report is coming up this upcoming Friday and it’s a minefield. The main problem for traders is accounting for immigration. There is a compelling argument that the sharp drop in US immigration along with self-deportation and enforced deportation is having material impacts on the labor market. It’s extremely hard to model but the Fed’s Barkin this week said he envisions 0-50K monthly jobs as a baseline for a stable market. That’s in contrast to 100-150K in the post-pandemic era.

There will be all kinds of downstream impacts from this but for traders, I think the risk is in over-reacting to jobs numbers close to zero. On the surface that may look ‘weak’ but unemployment may stay flat. That’s why I think the number to doubly focus on is unemployment while ignoring swings in the non-farm payrolls headline.

In addition, I fear that the Fed may over-react to low headline numbers and cut rates too low. That’s something that will plant the seeds of a future inflation shock or asset bubble.

This article was written by Adam Button at investinglive.com.