Last week saw pockets of volatility, amplified by the continued absence of official U.S. economic data due to the federal government shutdown — a disruption that has finally been resolved after more than a month. With investors relying on central-bank commentary, private-sector surveys, and a heavy earnings calendar, markets experienced pronounced day-to-day swings.
Regional performance diverged: the UK market reached all-time highs despite disappointing prints on unemployment, GDP, and industrial production. China’s industrial output also came in below expectations, while eurozone GDP delivered a modest upside surprise. FX markets were relatively stable, with the U.S. dollar losing some ground against major peers. Commodities — from gold to crude oil to copper — ended the week with limited net change.
Key Points to Watch
- Nvidia takes centre stage on Wednesday, with expectations that its results could re-energise the AI trade. Walmart and Target will also offer important insight into U.S. consumer trends.
- As federal agencies resume operations, September’s long-delayed NFP report is expected on Thursday, helping clarify expectations for December’s policy decisions.
- Friday’s global PMI releases will shed light on near-term momentum across manufacturing and services in major developed markets.
United States
Earnings from major retailers and Nvidia will likely dominate sentiment. Traditional sectors have recently outperformed technology, with the Dow Jones reaching new highs. The FOMC minutes on Wednesday and Thursday’s long-awaited NFP release may shift expectations for December, which currently lean toward no change.
Europe & UK
UK inflation and retail-sales data from mid-week onward could influence the pound. In the eurozone, remarks from multiple ECB officials — including Vice President de Guindos — will be closely watched. Euro-area inflation data are due Wednesday, followed by Friday’s PMIs.
Asia
Focus remains on rising tensions between China and Japan, with Beijing advising caution around travel and study plans in Japan. Japanese GDP showed a smaller-than-expected contraction this morning. Markets will look to Thursday’s PBoC meeting for policy signals.
Conclusion
Volatility is expected to increase from mid-week, driven by Nvidia’s anticipated results and their impact on U.S. and global indices. Thursday’s delayed NFP report — official but partly supported by private-survey inputs due to BLS disruptions — should finally offer clarity on the U.S. labour market after nearly 40 days without visibility.
