Global Economy Briefing: October 23, 2025

A clearer day for the global tape: U.S. existing-home sales inched higher, euro-area sentiment and France’s business survey improved, and UK funding costs eased even as factory orders slumped.

In Asia, Japan’s inflation firmed to 2.9% while PMIs softened, contrasting with Singapore’s ultra-low inflation and steady housing.

Mexico’s retail momentum picked up; Canada’s rebound showed cracks. Product stocks stayed tight in the U.S., keeping fuel costs volatile despite a larger natural-gas build.

United States

Housing showed a faint heartbeat: existing home sales rose 1.5% in September to 4.06 million, helped by marginally easier funding at the short end (4-week bills 3.945%, 8-week 3.900%).

Regional activity firmed, with the Kansas City Fed’s manufacturing index up to 15 and the composite to 6. Natural-gas storage built by 87 bcf, adding a mild headwind to near-term energy prices.

Treasury inflation protection cheapened at the margin (5-year TIPS auction 1.182%), a small vote of confidence in the disinflation path even as overall financial conditions remain tight.

Europe & UK

Signals brightened but remain fragile. France’s business survey jumped to 101, Spain’s trade deficit widened to €6.0 billion, and euro-area consumer confidence improved to −14.2 (from −14.9).

In the UK, the five-year gilt auction cleared at 4.004% (down from 4.095%), even as industry orders slumped to −38 in the CBI survey.

The mix—cheaper funding but softer order books—keeps the Bank of England cautious: enough cooling to avoid new hikes, not enough momentum to declare victory.

Switzerland’s backdrop was steady (CPI low, policy assessment watched).

Asia

Two different inflation stories crossed: Singapore’s prices are calm—headline CPI 0.7% y/y, core 0.4%—with private home prices up 0.9% q/q, a soft-landing profile that helps real incomes.

Japan’s picture is the opposite: national CPI firmed to 2.9% y/y (core 2.9%), while PMIs showed manufacturing still in contraction (48.3) and services slowing (52.4)—inflation is stickier just as growth cools.

Hong Kong inflation stayed benign at 1.1% y/y. Norway’s jobless rate eased to 4.8%.

Major Emerging Markets and Canada

Mexico’s pulse improved: retail sales rose 0.6% m/m (2.4% y/y), while first-half October inflation was contained (headline 0.28% m/m; core 0.18%), giving Banxico room to stay patient.

Canada’s August retail sales recovered 1.0% m/m (core 0.7%), but a flash estimate flagged a 0.7% drop in September—evidence of consumers tapping the brakes again.

Brazil’s National Monetary Council met with markets focused on credit conditions and fiscal anchors; no major data prints hit.

South Africa released its monetary policy review, with attention on how to balance a slow growth trend against gradually rising core prices.

Commodities & Flows

A larger U.S. gas build and firmer refinery runs earlier in the week point to easier energy into winter than feared, even as logistics and crack spreads keep fuel costs volatile.

U.S. reserve balances slipped to $2.93 trillion and the Fed’s balance sheet to $6.59 trillion—still tight, but off recent peaks—while strong bill demand provided modest relief at the margin.

Risks and Framing

The story behind the story: inflation pressure is migrating from the U.S. to Japan, while Singapore and the UK show incremental cooling.

Europe’s sentiment is stabilizing but fragile; North America’s consumer is resilient, not roaring.

For readers outside these markets, watch three levers that travel fast across borders—fuel prices, mortgage costs, and export demand.

They will decide whether this “almost soft landing” holds into year-end.