Global Economy Briefing — October 1, 2025

With China and Hong Kong closed for National Day, the center of gravity shifted to energy and inflation.

OPEC gathered against a backdrop of U.S. data showing a broad inventory build: crude +1.792 million barrels, gasoline +4.125 million, refinery utilization down 1.6 percentage points, and Cushing stocks -0.271 million.

The mix points to softer refinery runs and a less-tight market heading into the Northern Hemisphere winter.

Europe’s inflation cooled only slowly. Eurozone headline CPI ticked up to 2.2% year over year in September, core held at 2.3%, and the ex-energy/food gauge was 2.4%.

All were up just 0.1% on the month, but Germany’s 10-year Bund auction cleared at a fatter 2.720%, reminding investors that disinflation isn’t victory.

Manufacturing was mixed: Germany 49.5 (better than feared), France 48.2, Italy 49.0, Spain 51.5, euro area 49.8.

The U.K. stayed in contraction at 46.2 even as house prices rose 0.5% m/m and 2.2% y/y. Switzerland’s PMI slid to 46.3 and retail sales fell 0.2% y/y.

America’s cooling signals multiplied. ADP showed private payrolls down 32,000 in September.

ISM manufacturing eased to 49.1, with new orders 48.9 but employment improving to 45.3; S&P Global’s PMI sat at 52.0.

High mortgage rates bit hard: applications fell 12.7% while the 30-year rate rose to 6.46%.

Yet consumer demand wasn’t absent—annualized vehicle sales reached 16.40 million—and GDPNow still estimates 3.8% growth for Q3.

Oil builds complicate the near-term inflation outlook as ISM prices paid remained elevated at 61.9.

Asia’s policy tone stayed steady. India held the repo at 5.50%, CRR at 4.00%, and reverse repo at 3.35%; its factory PMI cooled to a still-strong 57.7. South Korea’s CPI re-accelerated to 2.1% y/y.

Japan’s monetary base contracted 6.1% y/y and a 10-year JGB auction tailed at 1.635%, underscoring a slow exit from ultra-easy policy.

Australia’s trade surplus shrank to A$1.825 billion as exports fell 7.8% m/m and imports rose 3.2%.

The Americas’ factory pulse weakened. Brazil’s PMI dropped to 46.5 and registered a net foreign-exchange inflow of $1.141 billion.

Mexico printed 49.60 and Canada 47.7; the Bank of Canada released meeting deliberations later.

European autos saw a mechanical rebound from August’s slump, with euro-area registrations up 38.9% m/m and 16.4% y/y; Italy was up 4.1% y/y.

The story behind the story

Three forces are pulling in different directions. First, energy: inventories rising while OPEC meets suggests supply discipline will decide whether oil stokes or soothes inflation into year-end.

Second, disinflation is slowing near 2% in advanced economies; that keeps real rates high even if central banks are on hold, restraining housing and capex.

Third, manufacturing is diverging: the U.S. shows demand resilience in autos but softer new orders; Europe is stabilizing at a low level; parts of Asia (India, Korea) remain comparatively firm.

Add tighter long-term financing—see Bunds at 2.72% and JGBs drifting higher—and you get a world economy that’s still expanding but increasingly rate-sensitive and uneven across regions and sectors.

Why this matters to readers everywhere

Oil outcomes over the next few weeks will shape winter heating costs and headline inflation prints globally.

A stickier core in Europe, plus firm U.S. prices-paid, argues against quick policy easing.

Meanwhile, fading factory momentum outside a handful of bright spots raises the risk that 2026 growth will depend more on services and government spending than on trade and industry.

What to watch next

• Friday’s U.S. payrolls for confirmation of the ADP softness.
• Any OPEC guidance on quotas and compliance as U.S. inventories build.
• Eurozone country-level inflation details and the next round of wage settlements.
• India’s October PMI to see if the gentle cooling continues.
• Australia’s October trade to confirm whether the export dip was a blip or a turn.

Bottom line

The global cycle is cooling, not collapsing: energy policy, slow-moving disinflation, and tighter long-term funding are now the main plot.

Whether growth merely downshifts—or stalls—will hinge on OPEC’s next move and the breadth of the U.S. labor slowdown.

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