Weekly Global Economy Overview: September 28–October 5, 2025

Global markets weighed disinflation in Europe, sticky U.S. services prices, and signs of a cautious Asia rebound across the week of September 28–October 5, 2025.

Energy dynamics stayed central as OPEC output edged higher while U.S. product inventories rose, complicating the inflation path.

Holiday-thinned Asian trading late in the week limited follow-through, leaving investors focused on next week’s U.S. labor prints and post-holiday China data.

United States

The soft-landing narrative persisted but momentum looked mixed. ISM manufacturing slipped to 49.1 (new orders 48.9) and ISM services cooled to 50.0, with prices paid elevated at 69.4.

ADP showed -32k jobs, yet pending home sales rose 4.0% m/m and GDPNow tracked Q3 at 3.8%. Dallas Fed surveys weakened, and consumer confidence eased to 94.2.

Treasury bill auctions cleared at 3-month 3.860%, 6-month 3.715%, and 52-week 3.540%.

The Fed’s balance sheet ticked down to $6.587T and reserve balances to $2.980T, while officials (Barkin, Goolsbee, Logan, Jefferson, Williams) balanced inflation vigilance with growth risks.

Europe & UK

Eurozone inflation neared target: headline CPI 2.2% y/y and core 2.3%, with unemployment at 6.3%.

Germany’s HICP ran 2.4% y/y and a Bund auction cleared at 2.72%; France posted HICP 1.1% y/y; Spain’s HICP was 3.0% y/y as confidence and industry sentiment stayed soft. PMIs showed euro manufacturing 49.8 and services 51.3.

In the UK, Q2 GDP grew 0.3% q/q (1.4% y/y) and the current account widened to -£28.9B. Nationwide house prices rose 0.5% m/m (2.2% y/y), but manufacturing PMI remained at 46.2; a 10-year gilt auction yielded 4.769%.

BoE speakers struck a cautious tone as credit conditions stayed tight and approvals were 64.7k.

Asia

China’s picture was mixed ahead of Golden Week: NBS manufacturing 49.8 and non-manufacturing 50.0 contrasted with stronger Caixin manufacturing 51.2 and services 52.9.

Japan’s data softened (industrial production -1.2% m/m; retail sales -1.1% y/y), while Tankan readings were mixed; JGB auctions saw the 10-year at 1.635% and 2-year at 0.949% as BoJ normalization talk lingered.

Korea’s external engine accelerated (exports +12.7% y/y; trade surplus $9.56B) with CPI 2.1% y/y. India kept policy settings steady; manufacturing PMI held a robust 57.7, FX reserves were $700.2B, and loan growth 10.4%.

The RBA stayed on hold at 3.60% as building approvals fell 6.0% m/m and the trade surplus shrank to 1.825B. Singapore’s PMI edged up to 50.1 and retail sales rose 5.2% y/y; Hong Kong retail sales increased 3.8% y/y.

Major Emerging Markets

Brazil’s signals were mixed: unemployment held at 5.6%; industrial production rose 0.8% m/m (-0.7% y/y); services and composite PMIs slipped to 46.3 and 46.0; CAGED showed +147k net jobs; budget metrics improved from July and FX flows were +$1.141B.

Mexico’s unemployment was 2.6% as fixed investment rose 1.6% m/m in July. South Africa’s PMI improved to 52.2, vehicle sales jumped 24.3% y/y, but the trade surplus narrowed to 3.97B.

Commodities & Flows

Oil’s backdrop tightened unevenly. OPEC production prints showed Saudi Arabia 9.85M b/d, UAE 3.35M, Iran 3.38M, Iraq 4.01M, Nigeria 1.55M. U.S. inventories rose (crude +1.79M; gasoline +4.13M), refinery utilization fell 1.6 pp, and rigs slipped (oil 422; total 549).

API signaled a crude draw (-3.674M), while EIA data pointed to product builds. U.S. natural gas storage rose 53 bcf. The mixed supply-demand signals kept inflation watchers alert and supported energy-linked FX.

Risks and Framing

Disinflation in Europe versus sticky U.S. services prices keeps policy paths divergent and curves sensitive to data surprises. A higher JGB yield trend amid BoJ normalization talk could nudge global term premia.

China’s post-holiday prints will test whether private-survey strength broadens. Energy remains a swing factor for headline CPI and real incomes.

Investors should monitor U.S. labor follow-through, ECB communication as CPI nears target, BoJ guidance, and any renewed volatility in oil and refined products.

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