10 Things You Need To Know: October 8, 2024
Key data releases this week include: consumer credit (Mon), NFIB Small Business Optimism (Tue), FOMC meeting minutes (Wed), CPI (Thu), PPI (Fri), and consumer sentiment (Fri).
Haver
October 3, 2024
The U.S. ISM Services PMI rose to 54.9 in September, the highest level since February 2023, after a 0.1-point uptick to 51.5 in August. he Action Economics Forecast Survey had expected 51.7 for September. The prices index rose to 59.4 in September.
Haver
October 4, 2024
Nonfarm payrolls increased 254,000 (1.5% y/y) in September after rising 159,000 in August and 144,000 in July. Expectations had been for a 150,000 rise in the Action Economics Forecast Survey. The three-month average change of 186,000 is the strongest since May. The unemployment rate, measured in the household survey, edged down to 4.1% in September from 4.2% in August.
Capital Economics
October 3, 2024
After falling to 1.8% in September, headline inflation in the euro-zone is almost certain to rise in the final few months of 2024. But we think that falling oil and natural gas prices will cause it to drop back again next year and average about 1.5% in 2025 and 2026. The core rate should reach 2% by the end of next year. We now expect the ECB to cut interest rates by 25bp at each of its next four meetings, taking the deposit rate down from 3.5% currently to 2.5% in March.
South China Morning Post
October 6, 2024
The use of the Chinese yuan in cross-border trade rose by 21.1% in the first eight months of the year, reaching 41.6 trillion yuan. The People’s Bank of China has been hoping to increase the yuan’s cross-border use, supporting Shanghai’s growth as a financial center and expanding offshore yuan markets. Despite a slight drop in the yuan’s share of global transactions, it remains the fourth most-used payment currency.
Barron’s
October 7, 2024
Central banks are fueling gold’s rise. Led by China, India, Poland, and others, central banks bought more than 1,000 metric tons of gold in both 2022 and 2023, according to the World Gold Council. Central-bank buying has represented up to a quarter of global gold demand in recent years. Recently, however, purchases have begun to slow. Overall, central-bank purchases amounted to just 183 metric tons in the second quarter, down 39% from 300 metric tons in the first quarter.
Barron’s
October 7, 2024
Gross domestic income, which is supposed to equal more widely followed gross domestic product, was revised up for the second quarter to show 3.4% annual real growth in the second quarter, massively higher than the 1.3% previous estimate. The reason: Personal income was much higher, which meant the saving rate was 5.2%, rather than the paltry 3.3% previously reported. In other words, Americans weren’t tapped out.
Capital Economics
October 4, 2024
September’s blockbuster employment report and the rebound in the October ISM services index mean that any hopes of another 50bp rate cut are long gone. We continue to expect the Fed to take a more measured approach from next month’s FOMC meeting onwards – cutting rates by 25bp at each meeting until the policy rate is down to between 3.00% and 3.25%.
The Wall Street Journal
October 2, 2024
Countries with rapid GDP growth often deliver the lowest stock market returns, contradicting the intuitive assumption that economic growth translates directly to financial gains for investors. Reasons include high market expectations, governmental interference, and currency devaluation impacting dollar-denominated investments.
Bloomberg
October 3, 2024
The private credit market could reach $30 trillion, driven by infrastructure lending and increased involvement from pension funds, says Rob Horn, global head of infrastructure and asset-based credit at Blackstone. Horn highlights a shift toward financing large, quality projects beyond private equity, with growing interest from insurers and pension funds in asset-based finance.