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Singapore Industrial Production (YoY) came in at 16.1%, above forecasts (0.5%) in September

Markets have been starved of key US economic data for almost a month now but the wait is finally over. And it doesn’t come any bigger than the US CPI data release. This will be for the month of September and is the main thing on the agenda to end the week. Given that it is the only major release this month, the focus, attention and scrutiny on the data is going to be much more amplified compared to anything else before.

The reason for this release during the government shutdown? Well, the BLS is making an exception on the grounds of having to calculate social security payments. So, what can we expect?

For one, this is arguably possibly the last piece of economic data that might not be significantly impacted by the government shutdown. That being said, there will still be some scrutiny on data quality surely even if not entirely justified.

The estimates indicate that core annual inflation is expected to hold at 3.1%, with headline annual inflation seen picking up to 3.1% – up from 2.9% in August. On a monthly basis, core prices are expected to increase by 0.3% with headline prices up 0.4%.

The couple of things to watch will be the same as before. The first one is to scrutinise for any further impact from tariffs passthrough. Core goods inflation rose 0.28% in August and the estimate this time around is for an increase of 0.35%. A notable beat of +0.4% could mark the highest reading in said category since May 2023 and raise some eyebrows at least.

However, the impact there should be offset by softer core services inflation – which is estimated at 0.31%, down from 0.35% in August. Softer rent/shelter prices compared to the month before is expected to help see services inflation moderate a little in September.

The expectation is that even with stronger core prices in suggesting further evidence of tariffs passthrough, it is to be offset by slowing services inflation. And for some analysts, they are still expecting tariffs passthrough to be evident but to a lesser extent i.e. 0.29% (Deutsche), 0.25% (Wells Fargo). This will still be more than double the 0.12% average of the prior 12 months though.

But overall, the signs seem to be pointing towards the notion that the impact from tariffs has been rather manageable with prices continuing to hold more stable despite that. And with a softer labour market weighing on the balance of scales, it still supports the narrative that the Fed can cut in October and December this year.

Just a little caveat though that after the report this week, there will be data quality concerns on the reliability of the next few releases next month (October report) and in December (November report). And it comes at a crucially sensitive time with some analysts expecting this period to be when stronger evidence of tariff pressures to manifest. So, do keep that in mind for the future.

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

Two major federal gambling prosecutions rocked the NBA, ensnaring the Portland Trail Blazers head coach, and alleged Mafia members.

Citing US President Donald Trump, the Financial Times (FT) reported on Friday that he is ending trade negotiations with Canada.

• Recap – Japan’s core inflation rises to 2.9% but Bank of Japan expected to wait
• China Communist Party research office head expect China GDP to reach 140tln yuan this year
• China President Xi says we should strive to break through key core technologies
• Trump on the warpath against Canada again – says all trade talks cancelled
• Trump: All trade negotiations with Canada terminated (over an ad)
• Gold Technical Analysis After Intel’s Post Earnings Rise
• Japan fin min: Ueda has emphasised importance of maintaining accommodative monetary policy
• Japan’s Rengo union demands 5% pay hike for 2026 to beat inflation
• ICYMI – Australia’s Sunrise energy deal with Lockheed Martin scandium deal
• China state planner says will implement some major investment projects
• China officials says must move faster to implement new development paradigm
• IMF warns Asia’s resilience is at risk from a stronger US dollar
• Is Intel Stock a Buy After Its Full 9.1% Earnings Rise?
• ICYMI – JPMorgan says gold could double by 2028
• ICYMI – Chinese President Xi and US’ Trump will meet on October 30
• South Korea seeks major US investment package amid tariff talks, smaller than US$350bn
• China needs fiscal push to fix trade war damage, says PBOC adviser
• PBOC sets USD/ CNY mid-point today at 7.0928 (vs. estimate at 7.1192)
• Japan finmin Katayama on the possibility of raising financial income tax
• Canada announces ‘significant’ reductions to import quotas of General Motors & Stellantis
• Japan preliminary manufacturing PMI (October) 48.3, 19 mth low (down from 48.5 September)
• RBA Governor Bullock makes no mention of interest rates or economy in speech on payments
• South Korea fin min: Will act swiftly if needed to stabilize financial markets
• AUD traders – Reserve Bank of Australia Governor Bullock speaking imminently (live link)
• Japan September headline inflation 2.9% y/y (expected 2.9%)
• Japan PM Takaichi arranging 1st phone talks with Trump for Saturday
• UK consumer confidence hits 14-month high but budget fears loom
• Aberdeen says December BoE rate cut more likely after inflation surprise
• Trump administration signals support for attacks on Russian energy, analyst warns
• Canada has slashed how many American vehicles Stellantis and GM can import tariff-free
• Australia flash manufacturing PMI (October) drops to 49.7 (from 51.4 in September)
• UBS Sees EUR/CHF rising to 0.94 as the probability of SNB intervention gains
• Goldman Sachs Stands by $4,900 Gold Forecast Despite 6% Price Dip
• investingLive Americas FX news wrap 23 Oct: Stocks/yields higher/USD lower. CPI tomorrow.
• China and US start fifth round of trade talks in Malaysia today to prep for APEC

After the US close, President Trump was reported as saying “Will be seeing land action in Venezuela soon.” There wasn’t much media follow-up, but such a remark could be highly consequential if it signals plans to deploy US troops. Keep an eye out for knee-jerk flows into safe-haven assets should that materialise.

The data focus of the session was Japan’s September CPI, which once again came in well above the Bank of Japan’s 2% target across all measures:
• Headline inflation 2.9% y/y
• CPI ex-fresh food 2.9% y/y
• CPI ex-food, energy 3.0% y/y
• Service-sector prices +1.4% y/y
• Goods prices +4.2% y/y

The persistent gap between goods and services inflation remains the key soft spot. Service-sector inflation continues to lag far behind, suggesting firms are still only gradually passing on higher labour costs — a crucial prerequisite for the BOJ to resume its rate-hike cycle. The yen weakened through the session after the release.

From China, a barrage of supportive remarks landed today. Various officials pledged further measures to bolster the economy and domestic consumption, a core policy goal. Notably, the state planner (NDRC) said several major investment projects will be auctioned, including new urban infrastructure in underground pipeline networks worth more than 5 trillion yuan.

The Canadian dollar was also active. Late Thursday, Trump said he was terminating trade negotiations with Canada, accusing the country of airing an advertisement that misrepresented Ronald Reagan’s stance on tariffs. In reality, the ad quoted Reagan verbatim from a 1987 speech warning that “over the long run, such trade barriers hurt every American worker and consumer.” Earlier in the session, Canada had slashed how many US vehicles Stellantis and GM can import tariff-free — another irritant for Washington, though Trump didn’t mention it in his reasoning.

Apart from FX already mentioned the USD was mainly range bound ahead of the CPI data due later (8.30am US Eastern time).

Asia-Pac
stocks:

• Japan
  (Nikkei 225) +1.58%
• Hong
  Kong (Hang Seng) +0.54%
• Shanghai
  Composite +0.48%
• Australia
  (S&P/ASX 200) -0.08%

This article was written by Eamonn Sheridan at investinglive.com.

I’ve bolded a section below that I think could be key to BOJ hold at its next meeting, October 29 and 30.

Japan’s core consumer inflation accelerated in September, keeping pressure on the Bank of Japan (BOJ) ahead of its policy meeting next week, though a closer look at the data revealed a slowdown in the underlying trend.

Core consumer prices, which exclude fresh food but include fuel, rose 2.9% year-on-year, government data showed on Friday. This matched market forecasts and was an acceleration from the 2.7% rise in August, keeping inflation well above the central bank’s 2% target.

However, the BOJ’s preferred “core-core” index, which strips out both food and volatile energy costs, provided a different picture. This gauge, seen as a better measure of underlying demand, rose 3.0%, marking a slowdown from the 3.3% increase in August.

The headline acceleration was driven by a renewed rise in energy costs and stubbornly high food prices, which climbed 7.6%.

A key sign of weakness for the BOJ was the persistent lag in service-sector inflation, which rose just 1.4%. This slow pace, far behind the 4.2% jump in goods prices, indicates that firms are only gradually passing on higher labour costs—a crucial prerequisite for the BOJ to resume its rate-hike cycle.

Analysts noted this mixed report gives the BOJ cover to remain cautious. “As things stand, both inflation… are on track to meet or overshoot the BOJ’s forecast for the ongoing fiscal year,” said Abhijit Surya, senior economist at Capital Economics. “Even so, the Bank’s messaging has remained cautious… and it doesn’t suggest that a rate hike is imminent.” Surya projects the BOJ will wait until January before hiking rates from their current 0.5% level.

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This mixed report will likely reinforce the Bank of Japan’s cautious, “wait-and-see” stance, which should put downward pressure on the Japanese Yen (JPY). While the 2.9% headline figure keeps rate-hike expectations on the table, traders will likely focus on the slowdown in the “core-core” index and weak service inflation. This reduces the immediate pressure on the BOJ to hike, which in turn should support Japanese government bonds (JGBs) and provide a tailwind for the Nikkei, as a weaker yen benefits exporters.

This article was written by Eamonn Sheridan at investinglive.com.

USD/CAD appreciates after registering little gains in the previous session, trading around 1.4020 during the Asian hours on Friday.

Japan’s inflation picked up in September, with core CPI (excluding fresh food) rising from 2.7% to 2.9% yoy, matching expectations and marking the first acceleration in four months. The key gauge has stayed at or above the BoJ’s 2% target since April 2022. Headline CPI also rose from 2.7% to 2.9% yoy, in line with […]

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