Global Economy Briefing — October 3, 2025

Global markets steadied Friday as a softer U.S. services reading collided with still-elevated price pressures and a patchwork of signals from Europe and emerging economies, while holiday closures in China and South Korea thinned liquidity across Asia.

In the United States, the ISM non-manufacturing index slipped to 50.0 in September from 52.0, with business activity at 49.9, new orders 50.4, and employment 47.2—pointing to a loss of momentum even as services-sector inflation stayed hot with prices paid at 69.4.

A parallel S&P Global survey was firmer at 54.2 (composite 53.9), underscoring a split picture that keeps the policy path sensitive to incoming data and remarks from Federal Reserve officials speaking through the day.

Europe offered a mixed growth read alongside disinflation at the factory gate. Germany’s services rose into expansion at 51.5 (composite 52.0), while France weakened further (services 48.5; composite 48.1).

Eurozone aggregates hovered just above 50 (services 51.3; composite 51.2). Producer prices fell 0.3% month on month and 0.6% year on year in August, reinforcing a cooling pipeline as investors parsed comments from ECB leaders. In the U.K., services cooled to 50.8, leaving growth near stall speed.

Global Economy Briefing — October 3, 2025

With China’s and South Korea’s markets shut for National Day, Asia’s lead was muted. Singapore’s retail sales rose 5.2% year on year and 0.5% month on month, hinting at resilient household demand despite regional cross-currents.

In the Americas, Canada’s services PMI remained in contraction at 46.3 as reserve assets eased to $126.6 billion. U.S. energy data showed Baker Hughes oil rigs at 422 and total rigs at 549, a marginal downtick that could temper future supply growth at the margin.

Latin America’s signals were two-sided. Brazil’s August industrial output rose 0.8% on the month but fell 0.7% on the year, while September PMIs slipped into contraction (services 46.3; composite 46.0).

Mexico’s July fixed investment rebounded 1.6% month on month but declined 6.6% from a year earlier, pointing to soft capex momentum into the second half.

Bottom line: With U.S. services losing altitude and euro-area prices easing, investors face a familiar trade-off—slower growth versus sticky services inflation—leaving the dollar, global rates, and cyclicals finely balanced into the U.S. session.

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