Key Points
- U.S. trade gap shrank sharply and productivity jumped; unit labor costs fell again.
- Europe’s goods pulse improved on German orders, but confidence stayed soft and funding costs rose.
- EM signals split: South Africa built reserves but its factories sank; Mexico cooled on inflation; Korea’s surplus surged.
United States
The day’s anchor was disinflation with better trade. The October trade deficit narrowed to $29.40B as exports rose to $302.0B and imports fell to $331.4B.
Productivity jumped to 4.9% q/q in Q3. Unit labor costs fell 1.9% q/q. Claims were calm: initial 208k; continuing 1.914m; the 4-week average 211.75k.
Consumer credit slowed to $4.23B. Wholesale inventories rose 0.2% as sales fell 0.4%. Natural gas drew 119 bcf. Bills eased again (4-week 3.550%; 8-week 3.540%).
Fed assets rose to $6.574T and reserve balances to $3.023T. Consumer inflation expectations ticked up to 3.4%. GDPNow jumped to 5.4%, a volatile nowcast that can swing on one data batch.
Read-through: the U.S. is importing less inflation, paying workers more efficiently, and keeping funding stable.
Europe and UK
Germany’s factory orders surged 5.6% m/m, a strong signal for the euro area’s goods chain. Italy’s unemployment fell to 5.7%.
Eurozone jobless eased to 6.3%. Producer prices rose 0.5% m/m but were still −1.7% y/y, so the pipeline remains soft.
Business and consumer survey slipped to 96.7 and services sentiment eased, while price expectations rose.
France’s external position worsened: current account −€0.80B and trade −€4.2B as imports rose. French reserve assets increased to €362.7B.
Funding costs moved higher at auctions (France 10-year 3.53%, 30-year 4.46%; Spain 5-year 2.512%, 7-year 2.938%).
The UK softened: Halifax fell −0.6% m/m and 0.3% y/y, though mortgage rates edged down to 6.77%.
Net: Europe’s orders improved, but households stay cautious and financing is not getting cheaper.
Asia-Pacific
Japan’s household confidence eased to 37.2, but household spending later in the day surged (2.9% y/y; 6.2% m/m).
Japanese reserves rose to $1.3698T. China’s CPI held at 0.8% y/y and PPI stayed negative at −1.9% y/y, keeping goods inflation low.
Korea’s current account widened to $12.24B, strengthening regional buffers. Colombia’s CPI eased to 5.10% y/y.
India’s M3 jumped to 12.1% y/y, signaling easy liquidity. Singapore was quiet; Australia had no major prints.
Latin America and Africa
Mexico’s inflation cooled: CPI 3.69% y/y with core 4.33% y/y; monthly CPI 0.28% and core 0.41%. PPI slowed to 2.10% y/y.
That supports Banxico’s cautious easing path. Brazil’s IGP-DI rose 0.10% m/m while industrial production was flat m/m and −1.2% y/y, a mild growth drag.
Chile’s CPI fell (−0.2% m/m; core −0.1% m/m), reinforcing a disinflation trend. Argentina’s industry contracted −8.7% y/y, a hard demand signal.
South Africa’s reserves jumped to $75.89B, but PMI fell to 40.5 and manufacturing output slid (−1.1% m/m; −1.0% y/y).
What it means
The U.S. trade shock and falling unit labor costs reduce global inflation risk and ease dollar pressure. China’s negative PPI extends the disinflation channel into global goods.
Europe gets a lift from German orders, but higher auction yields show markets still want discipline.
EMs split by credibility and buffers: Korea and South Africa built external cushions; Mexico and Chile look disinflation-friendly; Brazil and Argentina remain growth-challenged.
Tilt: keep quality duration; favor U.S. services and exporters helped by a smaller trade gap; add selectively to euro industrials tied to German orders.
Prefer Mexico and Chile in LATAM while watching Brazil’s flows; avoid weak-demand stories until output stabilizes.