Economic Highlights

Unemployment jumped from 4.1% to 4.5% in August (f/c 4.3%). Even so there were some positive developments in September, with a net 20k new payroll employees and 488k vacancies posted. However, any optimism could be reversed once existing furlough schemes are unwound at the end of October. Still, Christmas is not far away, and shoppers are already out in force in advance judging by the 5.6% y/y increase in

Shoppers are also displaying confidence in the US, possibly as a result of all the forced savings earlier in the pandemic, as well as the delivery of another payment to the unemployed. Retail Sales rose 1.9% m/m in September. This mood was also reflected in the University of Michigan Sentiment survey, which rose from 80.4 to 81.2 (f/c 80.5), boosted by a positive expectations component and relatively subdued longer term inflation projections.

No signs of inflation in the euro zone, which continues to invite the European Central Bank to remain generous with its policies, possibly looking to expand asset purchases in December. Headline CPI was confirmed at -0.3% y/y, with the Core reading at +0.2%. The ZEW economic sentiment index fell back from 73.9 to 52.3 in the light of increasing Covid cases and tighter restrictions.

Although Q3 GDP missed a consensus forecast of +5.5% y/y with a rise of 4.9%, China remains the only major economy to see annual growth measures in positive territory. Within that figure, and encouragingly, Industrial Production (+6.9% y/y) and Retail Sales (+3.3%) both beat forecasts (+5.8% and +1.6% respectively).