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• Prior 51.5
• Final Composite PMI 53.9 vs 53.8 prelim
• Prior 52.0

Key findings:

• Employment increases for first time in three months

Comment:

Commenting on the PMI data, Nils Müller, Junior Economist at Hamburg Commercial Bank, said:

“Germany’s services sector started the fourth quarter with renewed momentum, as the HCOB Services PMI surged to 54.6
in October, marking its highest reading in nearly two-and-a-half years. The acceleration in business activity was
accompanied by a solid rise in new work, which recorded only its second increase in over a year.

“Employment rebounded after two months of decline, with service providers returning to hiring mode amid rising backlogs of
work – the first such increase in 18 months. The accumulation of outstanding business, albeit modest, signals growing
capacity pressures, which surveyed firms attributed to stronger demand, supply shortages, and a lack of qualified staff.
However, optimism about future activity ticked down slightly from September’s recent high, suggesting some caution
remains despite the overall upbeat tone.

“Inflationary pressures intensified, with input costs rising at the fastest pace since April, which was largely driven by wage
increases, as firms reported. Output prices followed suit, climbing at the quickest rate in eight months. These developments
point to a sector regaining pricing strength amid improving demand conditions.

“Taken together, the October PMI data suggest that Germany’s services economy is regaining its footing after a subdued
period. The combination of rising demand, renewed hiring, and stronger pricing power bodes well for the broader economy,
even as firms remain watchful of external risks and cost pressures.”

This article was written by Giuseppe Dellamotta at investinglive.com.

• Prior 48.5
• Composite PMI 47.7 vs 46.8 prelim
• Prior 48.1

Despite the positive revision, it still marks a renewed downturn in France’s services sector with activity levels falling at its quickest pace since April. Some good news at least is that jobs growth held up while input price inflation saw its slowest increase in over four-and-a-half years. Meanwhile, business expectations for the year ahead also remained positive overall. HCOB notes that:

“The downward trend in France’s private sector economy continues unabated at the start of the fourth quarter. After the
HCOB manufacturing PMI already signalled weakness in October, conditions in the service sector also deteriorated. As a
result, the HCOB Composite PMI Business Activity Index has declined once again, marking the fourteenth consecutive
month in which the French private economy has failed to register growth.

“The French service sector is under pressure, with weak demand emerging as the central issue. This is reflected in declining
business activity and a disappointing level of new orders. Key drivers include customer caution and restraint, intense
competitive pressures and ongoing political uncertainty. Business expectations for the coming 12 months have further
deteriorated in October and remain well below the historical average. Several companies with a pessimistic outlook explicitly
cited the political situation as a contributing factor.

“On a more positive note, hiring activity in the service sector has so far remained resilient. The corresponding index has
stayed in expansion territory for three consecutive months, suggesting that the sluggish overall performance has yet to deter
hiring. However, caution is warranted: if demand remains subdued, employment dynamics are likely to weaken over time.
Declining backlogs of work serve as an additional warning sign, indicating that current hiring intentions may be built on shaky
ground.”

This article was written by Justin Low at investinglive.com.

• Prior 52.5
• Composite PMI 53.1 vs 51.7 prior
• Full report here

Key findings:

• Growth in new work accelerates, supported by fresh rise in exports
• Input cost inflation at four-and-a-half year low
• Job creation only fractional despite stronger rise in activity

Comment:

Commenting on the PMI data, Nils Müller, Junior Economist at Hamburg Commercial Bank, said:

“Italy’s services sector entered the fourth quarter on a strong footing, as the HCOB Italy Services PMI rose to 54.0 in
October. The acceleration in activity growth was accompanied by a robust rise in new business, fresh customer wins, and a
renewed rise in export orders. The improvement in services fed through to the broader economy, lifting the HCOB Italy
Composite PMI to 53.1, marking the strongest reading since March 2024. While manufacturing output also returned to
growth, the momentum was clearly concentrated in the service sector.

“Price dynamics in the Italian service sector were mixed. Input cost inflation eased to a four-and-a-half year low, offering
some relief to firms. However, operating expenses continued to be elevated, with higher energy, insurance and consultancy
costs cited. In response, service providers raised their charges at a faster pace, aiming to protect margins amid improved
demand conditions.

“Employment growth remained subdued, with firms adding staff only fractionally, often through temporary hires. Despite the
stronger rise in workloads, backlogs continued to fall, pointing to persistent spare capacity. Business confidence stayed
positive but was below historical norms, reflecting a cautious outlook in the face of persistent global headwinds.

“Overall, October’s PMI data highlight the resilience of the service sector, which remains the main engine of growth within
Italy’s private economy. With overall demand firming and export orders showing early signs of recovery, the outlook has
brightened – even if hiring and sentiment remain restrained.”

This article was written by Giuseppe Dellamotta at investinglive.com.

Fundamental
Overview

After the big selloff, gold
got stuck in a consolidation since last Tuesday despite a more hawkish than
expected Fed Chair Powell. It might be a sign of a short-term bottom, but it
could also be just some exhaustion after the 11% drawdown.

There are no strong reasons
for more upside at the moment, so the consolidation could extend for weeks or
even months if we don’t get new catalysts to trigger a sustained move on either
side. Right now, the picture is more neutral/bearish.

Strong US data, especially on the labour market side, should keep weighing on gold as it would keep the market speculating on rate cuts pause. Conversely, weak data is likely to support the precious metal as it would give the Fed more reasons to keep cutting rates.

In the bigger picture, gold
should remain in an uptrend as real yields will likely continue to fall amid
the Fed’s dovish reaction function. But in the short term, a further hawkish
repricing in interest rate expectations should keep weighing on the market.

Gold
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that gold has been consolidating between the 4000 and 3900 level. There’s
not much we can glean from this timeframe, so we need to zoom in to see some
more details.

Gold Technical Analysis
– 4 hour Timeframe

On the 4 hour chart, we can
see that we have a strong resistance zone around the 4000 level where the price
got rejected from several times in the past week. That’s where we can expect
the sellers to step in with a defined risk above the resistance to position for
a drop into the 3820 level next. The buyers, on the other hand, will want to
see the price breaking higher to pile in for a rally back into the 4150 level.

Gold Technical Analysis
– 1 hour Timeframe

On the 1 hour chart, there’s
not much else we can add here as the sellers will look to short from the
resistance, while the buyers will target a breakout. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we have the US ADP report and the US ISM Services PMI. On Friday, we
conclude the week with the US University of Michigan Consumer Sentiment report.

Video

This article was written by Giuseppe Dellamotta at investinglive.com.

• Prior 54.3
• Composite PMI 56.0
• Prior 53.8

Spain’s services sector posts its fastest growth in 10 months amid a pick up in both activity and new business. Meanwhile, confidence in the outlook also strengthened- reaching a seven-month high. That said, input price inflation remained elevated despite dropping to a three-month low while selling prices were raised at a stronger degree than the month before. HCOB notes that:

“Spain’s private sector is entering the fourth quarter with noticeable momentum. The HCOB Composite PMI recorded a solid
increase, reaching 56.0 points, which is the highest level so far this year. This improvement is driven by accelerated growth
in both manufacturing and services. Following the robust GDP expansion in the third quarter, the October PMI figures fuel
optimism that Spain’s GDP could grow by nearly 3.0 percent in 2025, thereby maintaining its exceptional position among the
four major euro area economies.

“Business activity in Spain’s services sector picked up significantly in October. This development is underpinned by a solid
inflow of new orders, which firms attribute directly to stronger market demand. Only foreign orders showed signs of
weakening growth, reflecting the uncertain international business environment.

“Spanish service providers are expanding their workforce to keep pace with sustained business momentum. This is also
evident in rising backlog of work, which has now increased for four consecutive months. Against this backdrop, firms remain
confident about their business outlook for the coming year. Their optimism is reflected in ambitious growth plans, the
expansion of commercial activities, and expectations of continued strong demand in 2026.
“Price developments remain a point of concern. Both input and output price indices are significantly above the levels seen
between 2009 and 2020. Panellists report rising personnel and energy costs, which have compelled many firms to adjust
their prices accordingly.”

This article was written by Justin Low at investinglive.com.

• Eurostoxx -0.5%
• Germany DAX -0.6%
• France CAC 40 -0.5%
• UK FTSE -0.2%
• Spain IBEX -0.5%
• Italy FTSE MIB -0.4%

The risk appetite has picked up since the depths of Asia trading, with S&P 500 futures also trimming losses to just 0.1% on the day. For some context, they were down as much as 0.8% at the lows earlier on. Tech shares remain vulnerable, with Palantir’s near 8% plunge yesterday reverberating across Wall Street. For now, things are kept in check but the danger isn’t over yet. In other markets, Bitcoin is also managing to stave off a firm break under $100,000 so that’s also helping a little – at least for now.

This article was written by Justin Low at investinglive.com.

It is reported that Beijing has issued a guidance that requires new data centre projects that have received any state funds to only use domestically developed AI chips. Thus, ruling out the use of foreign AI chips with authorities even ordering data centres that are less than 30% complete to remove all previously installed foreign chips.

Adding to that, the government has also order for said centres to cancel plans to purchase foreign chips as it appears that there is a continued fallout between the US and China on this matter at least.

For some context, most data centres in China do received some form of state funding in their setting up. So, this ruling will impact the majority of the development in this space. One of the sources say that this directive is already starting to have impact with a facility in the northwestern province now being suspended after earlier planning to deploy Nvidia chips instead.

The source also adds that the guidance issued will cover Nvidia’s H20 chips as well as B200 and H2000 processors. On the latter two, they have been banned by Beijing but had been widely available in China through backdoor channels. So, the government is moving to outright just ban their usage it would seem.

This article was written by Justin Low at investinglive.com.