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The latest October PMI readings today don't paint a particularly encouraging picture of the health of the euro area economy. Growth is slowing and businesses are feeling the pinch, but inflation pressures are still refusing to go away. And that is the sort of headache that the ECB really doesn't need right now.

The data showed disappointing readings from both the manufacturing and services sectors, with the latter slowing rather markedly. A lot of that can be attributed to France though, as business activity there returned to contraction in October. And while Germany continues to hold up better, the broader slowdown across the region is becoming more difficult to ignore as we look to the final quarter this year.

With that in mind, this is…

Bitcoin erased all the weekly gains in the past couple of days as widespread risk aversion weighed on the crypto market. The risk-off flows started late Wednesday following reports that the US military was reducing its troop presence at bases in the Middle East, while the State Department ordered staff cuts at diplomatic posts amid rising security risks and the possibility of renewed military action against Iran.

The selling pressure then intensified after The New York Times reported that the US and Israeli militaries had developed detailed plans for potential strikes on Iran following the US midterm elections. The report also said that the US was building up…

• Prior 52.1
• Manufacturing PMI 52.8 vs 51.7 expected
• Prior 51.9
• Composite PMI 53.1 vs 51.8 expected
• Prior 52.0

Key findings:

Business activity growth accelerates to its fastest since February, helped by rebound in new orders

Comment:

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence:

“The UK economy has picked up momentum in October, with early PMI data indicating the strongest rate of growth since February. This encouraging sign of economic resilience is underscored by firms taking on additional workers for the first time since hiring was hit by the 2024 Autumn Budget.

"There are reports of paused spending due to a lack of clarity on domestic economic policy in the run up to the Budget, meaning the promising economic…

• Eurozone October flash services PMI 51.7 vs 52.5 expected
• Prior 53.0
• Eurozone October flash manufacturing PMI 52.4 vs 52.7 expected
• Prior 52.9
• Eurozone October flash composite PMI 51.9 vs 52.7 expected
• Prior 53.1

After the softer prints from France and Germany, the weaker-than-expected results for the overall euro area are not all too surprising. But at least for now, business activity continues to grow with both output and new orders increasing for the fourth successive month in October, albeit at the slowest pace during this sequence.

A key drag on growth was a renewed drop in business activity in the French services sector. But there were also signs of weakness elsewhere in the region as growth also edged lower in the rest of the euro area…

Gold extended the losses yesterday after breaking below the 4,070 support as widespread risk aversion tightened financial conditions. It looks like gold have been driven mainly by liquidations to cover losses in the stock market, much like what we’ve seen in 2025.  

To understand the mechanics, imagine that an investment fund holds stocks, gold and government bonds. Some stocks suddenly crash, and the fund suffers losses on leveraged positions. The fund may need to raise cash to meet margin calls, reduce leverage or satisfy investor redemptions. Rather than selling only the assets that caused the losses, it may sell whatever it can liquidate quickly. Gold is particularly…

IC – Europe Fundamental Forecast | 23 October 2026

What happened in the Asia session?

Asian markets were cautious on Friday, 23 October, as concerns about AI investment costs and technology-sector valuations triggered further stock-market weakness. Investors moved toward safer assets, supporting government bonds and the yen, while oil prices remained elevated because of Middle East supply risks. The key instruments to watch were Asian stock indices, USD/JPY, gold, Brent crude, and WTI crude. Later U.S. PMI and consumer-sentiment releases could create additional volatility in the dollar, gold, and oil markets.

What does it mean for the European & US sessions?

Friday’s main trading focus is on European and UK flash PMIs, followed by U.S.…

IC – Asia Fundamental Forecast | 23 October 2026

What happened in the U.S. session?

The U.S. session on Thursday was dominated by technology-stock losses, falling Treasury yields and rising oil prices. Investors became more cautious about AI spending and potential geopolitical escalation involving Iran. U.S. jobless claims were better than expected, but this did not prevent the broader flight toward safer assets.

What does it mean for the Asia Session?

Asian traders should focus on Singapore inflation, the reaction to Japan’s latest data, China’s growth outlook, the U.S. dollar and Treasury yields, and oil prices on Friday, 23 October 2026. The yen could react to changing Bank of Japan expectations, while the Australian dollar and…

• Prior 53.9
• Services PMI 51.7 vs 52.5 expected
• Prior 52.9
• Composite PMI 52.8 vs 53.3 expected
• Prior 53.8

Key findings: 

Economic activity softens in October

Comment:

Phil Smith, Economics Associate Director at S&P Global Market Intelligence:

"October's flash PMI results encouragingly showed a sustained upturn in business activity across Germany, although a slowdown in growth underscored that the recovery in the eurozone's largest economy remains fragile. Inflows of new work rose only modestly and at the slowest rate for three months at the start of the fourth quarter, with a stalling of new business growth in the service sector highlighting the ongoing headwinds to demand from elevated inflation and uncertainty.

"Labour market conditions…

• France October flash services PMI 48.4 vs 50.7 expected
• Prior 51.2
• France October flash manufacturing PMI 49.3 vs 50.5 expected
• Prior 50.6
• France October flash composite PMI 48.4 vs 50.5 expected
• Prior 51.1

That's not a good sign as the French private sector falls back into contraction in October, amid political and financial concerns. Weighing on activity levels was the sharpest decline in demand for French goods and services since May, which surveyed businesses attributed to heightened uncertainty and economic pressures.

The only good news perhaps for the ECB is that the survey's price gauges decreased from September to signal an easing of input cost and output charge inflation rates.

Looking at the breakdown, manufacturers and service…

●         Asian Stock Markets : Nikkei down 0.85%, Shanghai Composite down 1.20% Hang Seng up 0.49% ASX down 0.13%

●        Commodities : Gold at $4,024.85 (-0.89%) Silver at $53.833 (-2.14%), Brent Oil at 113.62 (0.39%), WTI Oil at 100.02 (0.56%)

●        Rates : US 10-year yield at 4.956, UK 10-year yield at 5.3396, Germany 10-year yield at 3.3365

●        (USD)  Unemployment Claims  194K to 200K  expected

U.S. stock futures were little changed on Thursday evening after technology shares tumbled amid concerns that enthusiasm surrounding artificial intelligence (AI) investments may be weakening.

Dow Jones Industrial Average futures rose 52 points, or 0.1%, while S&P 500…

• Eurostoxx -0.3%
• Germany DAX -0.5%
• France CAC 40 -0.6%
• UK FTSE -0.2%
• Spain IBEX -0.1%
• Italy FTSE MIB flat

European indices are opening slightly lower across the board as the more cautious risk mood carries over from yesterday. The selling pressure isn't quite as intense for now, but there's little reason for investors to be feeling too optimistic either.

The selloff in Wall Street yesterday continues to cast a shadow over broader sentiment, with concerns surrounding AI-related stocks and elevated oil prices keeping investors on edge. US futures are also looking more tepid today, with S&P 500 futures down 0.1% for the time being.

And to kick start the session, economic data isn't offering much comfort either. France's October flash PMI figures were…