News and Economic Update:

• China Caixin services PMI fell to 49.3 in September from 55.0 in August.
• Russia unleashed its most broad air assaults since the start of the Ukraine war on Monday, showering cruise missiles on cities during rush hour to avenge a blown-up bridge.
• The IMF estimated that global GDP will drop to 2.7% next year, 0.2% lower than its July forecast, and that 2023 will feel like a recession for millions.
• On Tuesday, G7 leaders began an emergency meeting to examine the latest round of missile attacks that Russian forces conducted against Ukraine.
• Bank of England expanded its emergency purchase to include inflation-linked debt in an effort to stop a rapid sell-off in the 2.3 trillion pound market for British government bonds.
• The Bank Of Korea has raised its key base interest rate 50 bps to 3.00% as expected
• API reports surprise 7.05M build in oil stockpiles
• EIA: U.S. crude supply up by 9.9 million barrels for the week ended Oct 7, the most since March 2021
• The Central Bank of Chile hike its interest rate by 50 bps to 11.25% on Friday, but suggested that they may hold off on rate moves at their next meeting.
• The Monetary Authority of Singapore tightened policy once again by re-centering its policy band
• According to Chicago Federal Reserve President Charles Evans, as supply chain pressures ease, there are some indications that inflation is slowing down.
• According to Fed Vice Chair Lael Brainard on Monday, the U.S. Federal Reserve is clear that restrictive monetary policy is necessary to reduce inflation, but the direction and rate of rate increases will remain “data-dependent.”
• The National Federation of Independent Business (NFIB) reported that its Small Business Optimism Index improved to 92.1 this month, marking the second consecutive month of gains.
• Fed’s Mester says there’s been no progress on inflation, so interest rates need to move higher
• U.S. Producer Price Index for September: +0.4% m/m vs. -0.1% m/m previous; core PPI was +0.4% m/m vs. +0.2% m/m previous
• U.S. mortgage interest rates rise to an average of 6.81%, the highest level since 2006; mortgage loan appliction volume fell -2.0% w/w and down -69% y/y
• U.S. monthly headline CPI up by 0.4% in Sept vs. 0.2 expected, core CPI also higher at 0.6% vs. 0.5% estimates; Annualized U.S. inflation slows to 8.2% –the lowest in seven months – but still higher than 8.1% estimates
• The Federal Reserve Open Market Committee (FOMC) meeting minutes from the most recent meeting showed that the FOMC members are surprised that inflation has been persistent and pulling back at a slower-than-expected pace.
• The Bank of England announced an expansion of its emergency bond-buying operation on Tuesday. widening its buying of index-linked gilts from Oct. 11-14.
• U.K. claimant counts increased in September at 25.5k vs. 4.2k forecast and 6.3k in August; the jobless rate ticked down from 3.6% to 3.5%; average earnings index popped higher from 5.5% to 6.0% vs. 5.9% forecast
• U.K. GDP in August: -0.3% m/m vs. +0.2% m/m previous; manufacturing production fell -1.6% m/m
• UK trade deficit widened to 7.1B GBP in August from a downwardly revised 5.4B GBP in July
• Eurozone industrial production increased by 1.5% m/m in August vs. -2.3% m/m drop in July
• erman final CPI unchanged at 1.9% m/m or 10% on year-over-year basis
• August saw the euro zone’s goods trade deficit with the rest of the world rise to about 51 billion euros ($49.7 billion), the largest deficit the group has experienced since Lithuania joined in January 2015 as its 19th member.
• Germany Wholesale prices jumped in September by 19.9% y/y and 1.6% m/m (vs. 0.1% m/m previous)
• Swiss Producer and Import Price Index rose by 0.2% m/m in September and +5.4% y/y; The rise was mostly a result of higher prices for steel, raw milk and dairy products, as well as vegetables and potatoes. Products made of aluminum and petroleum, on the other hand, became less expensive.
• Canada manufacturing sales for August fell -2.0% m/m to $70.4B vs. -0.6% m/m previous
• Canada Wholesale sales for August: +1.4% m/m to $81.3B vs. -0.6% m/m previous
• BusinessNZ: New Zealand’s manufacturing sector loses steam, drops from 54.8 to 52.0 in September
• New Zealand Food Price Index for September: +0.4% m/m vs. 1.1% m/m
• Australia AiG September services index 48.0 vs 53.3 in Aug.
• Australia’s Westpac consumer sentiment retreated by 0.9% after earlier 3.9% gain
• Australian NAB business confidence index slipped from 10 to 5 in Sept.
• Australia Household Spending Index fell 0.5% m/m in September, Commonwealth Bank of Australia announced Tuesday.
• The Household Spending Intentions Index fell 0.5% in September from a month earlier, Commonwealth Bank of Australia announced Tuesday.
• Australia’s MI inflation expectations unchanged at 5.4%
• Japan’s core machinery orders post -5.8% m/m decline, the biggest fall in 6 months. Core orders came in at +9.7% y/y vs. an expectation of +12.6% y/y
• Japan Reuters Tankan index hits 5-month low of 5 in Oct
• Japanese producer prices jumped from 9.4% to 9.7% y/y in Sept.