Thursday Recap
October 2, 2025
This second day of the U.S. Federal government shutdown has been uneventful in world financial markets. Some two hours before the close of the U.S. stock exchange, major indices are flat to marginally firmer, which is still a smaller improvement than experienced in some foreign stock markets such as South Korea (2.7%), Singapore (1.7%), Australia (1.1%), and France and Germany (both 1.2%). Even Taiwan ended 1.5% higher, even though China likely has a greatly improved opportunity to invade Taiwan without eliciting a U.S. military response. The dollar is up marginally as well. Ten-year U.S. and British sovereign debt yields are just two basis points firmer, while comparable yields have dipped a basis point in Germany, France, Italy and Spain. Oil and gold prices have fallen 0.8% and 1.3% on the day, whereas Bitcoin is 1.0% higher.
Japan’s consumer confidence measure improved last month to its best level since December but, at 35.3, remained depressed historically.
September consumer price data releases today in South Korea, Switzerland and Cyprus recorded year-on-year changes of only +2.1%, -0.2% and -0.7%. Romanian producer price inflation accelerated to a 5-month high of 3.2%.
Euroland’s jobless rate ticked back up 0.1 percentage point in August following July’s record low of 6.2%.
The Central Bank of Egypt‘s overnight deposit rate underwent its fourth cut since April. Analysts were anticipating a reduction of 100 basis points or perhaps as much as the April and August cuts of 200 bps. Monetary officials went with 100 basis points. The six percentage point cumulative drop so far to 21.0% has been more or less aligned with the deceleration of CPI inflation from 16.8% in May to 12.0% by August. Egyptian inflation crested at 38% in September 2023 and was at or above 24% for two straight years from January 2o23 through January 2025. Against that history, Egyptian inflation has receded much more sharply than the drop of the central bank interest rate from the 27% peak to 21% currently.
Copyright 2025, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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