Eurozone PMI shows continued decent growth… outside of France
Economic indicators for October reveal a divergence in global performance, as the Eurozone maintains a level of resilience against energy price pressures while France faces a distinct downturn. Recent sentiment data suggests that third-quarter gross domestic product growth for the Eurozone likely remained respectable, even though industrial production figures for July were underwhelming. The early portion of the third quarter was supported by a brief decline in energy costs, but the landscape shifted as concerns regarding the French economy intensified toward the end of the period. The October Purchasing Managers Index, or PMI, indicates that the broader Eurozone economy has stayed robust despite elevated energy prices. However, France stands out as a significant exception to this trend. The French PMI plummeted from a previous reading of 51.1 down to 48.4, which is a level typically linked to economic contraction.
Trump Discusses Iran and Trade Deals
On the geopolitical front, Donald Trump addressed several international issues that have caught the attention of market participants. Trump questioned whether the United States should finish the war in Iran or let it wither, stating that the U.S. could take all of the oil in Iran and end the conflict very quickly. These remarks come as the market anticipates a potential escalation over the weekend. Consequently, WTI crude oil prices increased by $2.82 to reach $102.27, sitting just 40 cents below the daily peak. Trump also noted that a trade agreement with Mexico is very close and that Canada is working hard to reach a deal with the U.S. Additionally, he mentioned discussions with the United Kingdom regarding North Sea drilling and touched upon the status of Starlink in Ukraine. He noted he would speak with Elon Musk if service issues are not resolved, though he clarified he has not spoken to Musk yet. A call with the UK today also included some discussion regarding Ukraine.
In the United States, business activity growth experienced a slight deceleration in October but remained near the multi-year highs recorded in September. This performance was driven by improving order books, with growth rates in the manufacturing and services sectors ranking among the strongest observed in the last five years. Robust domestic demand and a resurgence in export growth have supported this expansion, while hiring remains at a high level.
US Business Activity and Treasury Yields
Meanwhile, U.S. Treasury yields saw an uptick on Friday. Despite the rise, yields stayed close to the lows of the previous day as investors looked for safety amid volatility in French government bonds. This market movement precedes a Federal Reserve meeting where officials are expected to maintain current interest rates on Wednesday. Analysts anticipate the central bank will resume a hiking cycle in December, as persistent inflation continues to impact consumer sentiment. The flight to safety in the bond market highlights the ongoing anxiety regarding European fiscal stability, even as domestic U.S. demand remains a primary driver of economic momentum.
Source: forexfactory.com · 2026-10-24