Global Economy Briefing: US Inflation Cools as Europe’s Prices Jump
Global economy briefing: US core PCE at 3.0% beat fears, but strong spending lifted the 10-year yield to 5.29%; Europe's inflation jumped. Today: US ISM.
Rio Times Global Economy Briefing
The Big Three
- US inflation cools, but the economy runs hot August core PCE inflation rose 0.2% on the month and 3.0% on the year, both below forecast. Yet consumer spending jumped 0.9%, ADP private payrolls rose 90,000 and the Chicago PMI leapt to 58.8. Futures trimmed the odds of an October Fed hike to about 37% from about 51%, but the 10-year Treasury yield still rose to 5.29%.
- Europe’s inflation jumps Flash September inflation beat forecasts in Germany (3.3%), France (3.4% on the EU measure) and Italy (4.1%). The figures raise pressure on the European Central Bank before Friday’s euro-area estimate. The Euro Stoxx 50 fell 0.81% and Germany’s DAX 0.79%.
- Colombia hikes, Latin America splits Colombia’s central bank surprised with a 25-basis-point rise to 12.25%. Brazil’s Ibovespa gained 1.37% and the real firmed 0.53% to 5.1743 per US dollar, while Mexico’s IPC fell 1.38%. Chile’s unemployment rose to 9.6% and its copper output hit a 15-year low.
Wednesday’s data, one by one
Our previous briefing told readers to watch US inflation, ADP payrolls and the Chicago PMI; Brazil’s fiscal data and producer prices; Chile’s labour and activity data; Colombia’s rate decision; flash inflation in Germany and France; and Japan’s Tankan survey. All of them came out. Here is each release, with the market reaction.
United States
| Indicator | Actual | Forecast | Prior | Verdict |
|---|---|---|---|---|
| ADP private payrolls, September | +90k | +70k | +36k (revised) | Hiring picks up |
| PCE price index, August (y/y) | 3.4% | 3.7% | — | Cooler than feared |
| Core PCE price index, August (m/m) | 0.2% | 0.3% | 0.1% | Below forecast |
| Core PCE price index, August (y/y) | 3.0% | 3.3% | — | Below forecast |
| Personal spending, August (m/m) | 0.9% | 0.8% | 0.1% | Strongest in over a year |
| Personal income, August (m/m) | 0.2% | 0.4% | 0.3% | Softer |
| GDP, Q2 third estimate (annualised) | 2.2% | 1.5% | — | Above forecast |
| Chicago PMI, September | 58.8 | 51.2 | 47.1 | Big jump |
The Bureau of Economic Analysis said the PCE price index rose 0.3% in August and core prices 0.2%, both a tenth below forecast. That cut bets on another Fed hike: futures put the chance of an October rise at about 37% by late Wednesday, from about 51% on Tuesday, according to CME FedWatch data cited by Kitco; Reuters put it at 41.5% shortly after the release. But spending rose 0.9%, ADP counted 90,000 new private jobs and the Chicago PMI surged, so the economy shows little sign of slowing. Bonds sold off at the long end: the 10-year yield rose 4.2 basis points to 5.291%, near its highest since 2002. The S&P 500 slipped 0.25% and the Dow 0.86%, while the Nasdaq gained 0.24%.
Europe & Asia
| Indicator | Actual | Forecast | Prior | Verdict |
|---|---|---|---|---|
| Germany inflation, September flash (y/y) | 3.3% | 3.2% | 2.9% | Hotter |
| France HICP, September flash (y/y) | 3.4% | 3.1% | 2.6% | Hotter |
| Italy HICP, September flash (y/y) | 4.1% | 3.8% | 3.2% | Above 4% |
| Japan Tankan, large manufacturers, Q3 | 24 | 25 | 22 | Mood improves |
| Japan Tankan, large non-manufacturers, Q3 | 35 | 36 | 37 | Slight dip |
Inflation accelerated across the euro area’s biggest economies. Germany’s rate rose to 3.3% (Destatis), France’s EU-harmonised rate to 3.4% (INSEE) and Italy’s to 4.1% (Istat). European shares fell: the Euro Stoxx 50 lost 0.81% and the DAX 0.79%. The Bank of Japan’s Tankan, released early on Thursday in Tokyo, showed big manufacturers’ mood rising to 24 from 22, just short of the 25 forecast.
Latin America
| Indicator | Actual | Forecast | Prior | Verdict |
|---|---|---|---|---|
| Colombia policy rate decision | 12.25% | 12.00% | 12.00% | Surprise hike |
| Colombia unemployment, August | 9.4% | 8.1% | 8.6% (Aug 2025) | Highest in 20 months |
| Brazil gross government debt, August (% of GDP) | 82.9% | 83.1% | 82.5% | Still rising |
| Brazil primary balance, August | R$10.0bn deficit (US$1.9bn) | — | — | Deficit |
| Brazil producer prices, August (m/m) | +0.36% | −0.4% | −0.83% | Back to rises |
| Chile unemployment, June–August | 9.6% | 9.5% | 9.5% | Higher |
| Chile industrial production, August (y/y) | −5.7% | −3.0% | −5.1% | Deeper fall |
Colombia’s Banco de la República raised its rate to 12.25% on a 4–2–1 vote, against a consensus for a hold; the peso firmed 0.68% to 3,307.50 per US dollar. Brazil’s central bank reported a public-sector primary deficit of 10.0 billion reais (about US$1.9 billion) in August and gross debt at 82.9% of GDP. IBGE’s producer prices rose 0.36%, up 2.53% over 12 months. The real gained 0.53% to 5.1743 per US dollar and the Ibovespa rose 1.37%. In Chile, INE reported unemployment of 9.6%, industrial production down 5.7% and copper output down 12.8% to 369,500 tonnes, the lowest in about 15 years. Chile’s IPSA fell 0.78%.
| Instrument | Level | Session |
|---|---|---|
| S&P 500 (US) | 7,652 | -0.25% |
| Ibovespa (Brazil) | 186,340 | +1.37% |
| USD/BRL | 5.1743 | -0.53% |
Source: RT live market data, close of Wednesday 30 September 2026.
Today’s Economic Calendar — Thursday, October 1, 2026
Times in UTC (Brasília is UTC−3). China’s mainland markets are closed for the Golden Week holiday from 1 to 7 October.
| Time (UTC) | Country | Event | Consensus | Prior |
|---|---|---|---|---|
| 08:00 | PE | Inflation, September (y/y) | 4.7% | 4.44% |
| 09:00 | EU | Unemployment rate, August | 6.4% | 6.4% |
| 11:30 | CL | Economic activity (Imacec), August (y/y) | −0.4% | −1.5% |
| 12:00 | MX | Business confidence, September | 48.2 | 48.1 |
| 12:30 | US | Initial jobless claims, week to 26 September | 200k | 197k |
| 13:00 | BR | S&P Global manufacturing PMI, September | 46.5 | 46.3 |
| 13:05 | US | Fed speakers: Barkin, Collins, Schmid | — | — |
| 14:00 | US | ISM manufacturing PMI, September | 55.0 | 54.6 |
| 14:00 | US | ISM manufacturing prices, September | 72.3 | 71.1 |
| 14:00 | US | Fed Governor Waller speaks | — | — |
| 15:00 | MX | S&P Global manufacturing PMI, September | 50.0 | 49.8 |
| 15:00 | CO | Davivienda manufacturing PMI, September | 52.9 | 54.3 |
| 19:00 | US | Fed speakers: Bowman (19:00), Williams (19:30), Logan (22:45) | — | — |
Live Market IntelligenceGlobal Markets — Live Board
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Global Markets — Live Board
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| SPX | 7,751 | +0.29% | — | — | — | — | — |
| NDX | 29,799 | +0.93% | — | — | — | — | — |
| DJI | 53,810 | +0.03% | — | — | — | — | — |
| RUT | 3,041 | +0.46% | — | — | — | — | — |
| US10Y | 4.6760 | -0.17% | — | — | — | — | — |
| VIX | 14.60 | -4.45% | — | — | — | — | — |
| DAX | 26,331 | -0.23% | — | — | — | — | — |
| FTSE | 10,833 | -0.10% | — | — | — | — | — |
| CAC | 8,675 | -0.46% | — | — | — | — | — |
| STOXX | 659.48 | -0.16% | — | — | — | — | — |
| NIKKEI | 67,524 | +0.83% | — | — | — | — | — |
| HSI | 25,440 | -0.83% | — | — | — | — | — |
| KOSPI | 6,579 | +3.68% | — | — | — | — | — |
| CSI300 | 4,691 | +0.58% | — | — | — | — | — |
| NIFTY | 24,436 | -0.15% | — | — | — | — | — |
| TSX | 36,619 | +0.39% | — | — | — | — | — |
| GOLD | 4,461 | +1.78% | +33.20% | 4,383 | 4,503 | 4,421 | 139,824 |
| SILVER | 65.59 | +1.26% | +73.05% | 64.77 | 66.98 | 64.81 | 46,406 |
01 Cooler prices, hotter growth, higher yields
Wednesday’s US data sent mixed signals. Inflation was softer than feared: the PCE price index rose 3.4% on the year, against a 3.7% forecast, and core prices 3.0%. That eased fears of another quick Fed hike after the September increase.
Activity data pointed the other way. Consumer spending rose 0.9% in August, ADP counted 90,000 new private jobs in September and the Chicago PMI jumped to 58.8. A strong economy with inflation above 3% leaves the Fed little room to relax.
Bond investors focused on that. The 10-year Treasury yield rose to 5.291%, near its highest since 2002, while gold fell 0.70% to about US$4,156 an ounce. For Latin America, US yields above 5% raise the bar for carry trades and keep pressure on local borrowing costs.
02 Europe’s inflation problem returns
Flash figures from Germany, France and Italy all beat forecasts. Italy’s harmonised rate passed 4%, and France’s jumped to 3.4% from 2.6%. That adds pressure on the European Central Bank: board member Isabel Schnabel warned on Wednesday that central banks cannot wait for inflation to show up before acting.
The euro-area estimate is due on Friday, with a forecast of 3.6% against 3.2% in August. European stocks fell, and the euro slipped 0.12% to 1.1327 per US dollar.
Oil added to the worry. Brent crude rose 0.92% to US$103.53 a barrel, recovering part of Tuesday’s 2.6% fall, as US–Iran talks stalled, according to Bogotá brokerage Acciones y Valores.
03 Latin America: a hike in Bogotá, a rally in São Paulo
Colombia’s central bank chose to fight inflation even as unemployment rose to 9.4%. Its 25-basis-point hike to 12.25% lifted the peso and hit rate-sensitive shares; the COLCAP fell 0.38%.
Brazil was the region’s winner. The Ibovespa rose 1.37% to 186,340 points and the real firmed 0.53%. Argentina’s Merval gained 1.32%.
Mexico and Chile lagged. Mexico’s IPC fell 1.38% to 64,214 points, and Chile’s IPSA lost 0.78% after weak jobs, factory and copper data.
What to watch today and this week
- Thursday: US ISM manufacturing index and jobless claims, plus seven Fed speakers; manufacturing PMIs for Brazil, Mexico and Colombia; Mexico business confidence; Chile’s Imacec activity index; Peru inflation. China’s mainland markets are shut for Golden Week until 7 October.
- Friday: US September employment report (forecast 90,000 jobs, unemployment 4.1%) and August factory orders; euro-area flash inflation (forecast 3.6%); Brazil’s August industrial production and São Paulo IPC-Fipe inflation.
- Ongoing: The US 10-year yield near 5.3%, the dollar, oil and the Middle East, and their spillovers into Latin American currencies and rates.
Frequently Asked Questions
Why did US bond yields rise despite softer inflation?
August PCE inflation came in below forecast, but spending, private hiring and the Chicago PMI were strong. Investors focused on the strength of the economy, and the 10-year Treasury yield rose 4.2 basis points to 5.291%.
What did the US PCE data show?
The PCE price index rose 0.3% in August and 3.4% on the year. Core prices, which exclude food and energy, rose 0.2% on the month and 3.0% on the year, both below forecasts.
Why is European inflation in focus?
Flash September inflation rose to 3.3% in Germany, 3.4% in France and 4.1% in Italy on the EU-harmonised measure, all above forecasts. That raises pressure on the European Central Bank.
What happened in Latin America on Wednesday?
Colombia’s central bank raised its rate to 12.25%. Brazil’s Ibovespa rose 1.37% and the real firmed 0.53%, while Mexico’s IPC fell 1.38% and Chile’s IPSA lost 0.78%.
What is the key US event this week?
Friday’s September employment report. Economists expect 90,000 new jobs and unemployment of 4.1%.
Source: RT live market data, close of Wednesday 30 September 2026; releases from the US Bureau of Economic Analysis, ADP, MNI Chicago, Destatis, INSEE, Istat, the Bank of Japan, the Banco de la República, DANE, the Central Bank of Brazil, IBGE and Chile’s INE.
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