A Breakthrough in U.S. Govt Shutdown & Weak Data Spur Hopes of Fed Interest Rate Cut Next Month
November 10, 2025
(166) Two pieces of concerning U.S. economic data emerged Friday: 1) Challenger’s monthly layoff estimate flagged the most October layoffs since 2003 and 2) the preliminary U. Michigan index of U.S. consumer confidence fell to 50.3 in November from 53.6 in the prior month, 61.7 as recently as July and 79.4 in March 2024. The 50.3 reading is the weakest since 50.0 in mid-2022 and the second lowest score ever.
Eight Democrats joined Republicans in a 60-40 senate vote late yesterday on terms to end the shutdown through end-January. This deal still needs to be passed by both the full Senate and House chambers and then signed by President Trump. It notably would not extend affordable care tax credits but allows for negotiations on controversial healthcare elements of the big beautiful budget bill passed last summer.
Financial markets at the start of this new week are attaching marginally greater likelihood than they did last week to the Federal Reserve cutting its interest rate target by 25 bps next month.
Equities have kicked off the new week with optimism, closing up 3.0% in South Korea, 1.6% in Hong Kong, 1.3% in Japan 0.8% in Taiwan and Australia. Gains so far in Germany, France, Italy and Spain exceed 1%, and the British Ftse’s rise is close to that threshold. The SPX, Nasdaq and Russell 2000 in futures trading point to a rise exceeding 1.0%, too.
The ten-year Japanese Government Bond yield rose three basis points after a dovish summary of last week’s BOJ policy review was published and on signals that the Takaichi government wants the central bank to approach rate normalization in a cautious way. Other ten-year sovereign debt yields are up today by two basis points in the U.S. and a single basis point in Germany and the U.K. but also a basis point lower in France, Italy and Spain.
The prices of gold and Bitcoins jumped so far today by 2.6% and 1.6%. Oil is up by a lesser 0.4%.
With the notable exception of a 0.4% rise against the dollar, the greenback is a tad softer this Monday.
Among price data reported around the world today,
- Chinese consumer price inflation exceeded expectations, alleviating deflationary concerns to some expected. Total CPI inflation accelerated from -0.4% in August and -0.3% in September to a 9-month high of +0.2%, and core inflation increased 0.2 percentage points to 1.2%. Also, a 2.1% year-on-year drop in producer prices was its smallest 12-month decrease in 14 months.
- Norwegian consumer price inflation retreated to a 3-month low 3.3% from Septembers 7-month high of 3.6% and a cyclical peak of 7.5% in October 2022. Norwegian producer prices (down 6.9%) recorded their largest on-year drop in 19 months.
- Danish CPI inflation slowed 0.2 percentage points to a 2-month low in October of 2.1%.
- But in Latvia, Moldova and Lithuania, CPI inflation rose last month to 26-, 2- and 6-month highs of 4.3%, 7.0% and 4.1%. Greek inflation edged up to 2.0% in October from 1.9% in September but well down from 3.1% in June.
- Croatian producer price inflation fell from September’s 13-month high of 1.7% to a 2-month low of 1.3% last month.
- In Kazakhstan, producer price inflation printed at a 6-month high in October of 8.4%. After peaking at 50.2% in June 2021, this wide-ranging variable crashed to -11.8% in July 2023.
Industrial production figures were released in many European economies today for the month of September. Compared a year earlier, output fell by 1.7% in Austria (most in 9 months), 1.3% in Slovenia (most in 3 months), 1.8% in Finland (least in 3 months), and 5.5% in Bulgaria (most in 7 months). Industrial production also rose year-on-year by 10.3% in Ireland ( least in 2 months) and 0.7% in Slovakia (most in six months.
Japan’s index of coincident economic indicators, whose trend characterization has been “halting to fall” since May 2024 rose to a 3-month high in September, but the index of leading economic indicators rose for a fourth straight time to an 8-month high. Japanese international reserves rose $6.1 billion in October and by $43 billion over the past three months to $1.35 trillion, its highest level since early 2022. The improvement, as in China, reflected dollar appreciation, not currency market intervention.
The Sentix measure of Euroland investor sentiment deteriorated this month to a reading of -7.4 this month from -5.4 in October and +0.2 back in June.
Copyright 2025, Larry Greenberg. All rights reserved.
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