KUWAIT: The consumer price index in the US rose 0.2 percent month-over-month in September, matching the increases seen in August and July, however higher than expectations of a 0.1 percent increase. The all items index increased 2.4 percent y/y, also slightly higher than the expected 2.3 percent figure, while core CPI rose 3.3 percent y/y. Increases were seen in food and shelter, which rose 0.4 percent and 0.2 percent respectively, making up 75 percent of the monthly all items increase. While the energy index fell 1.9 percent for the month, following a 0.8 percent decline the previous month. The figures suggested that the Fed will be more cautious about further rate cuts this year. Markets are currently pricing in 45 bps worth of cuts in 2024.

Unemployment claims

The weekly initial jobless claims ticked higher in September, with the figure showing a 258k claims for the month, up from 225k in August and beating expectations of 231k claims. The increase was mainly seen in unadjusted claims in North Carolina, Florida, and Washington. Economists expect the short term labor market to be distorted due to recent weather storms in the US which resulted in the destruction of homes as well as some casualties.

Producer Price Index

The producer price index for final demand in the US was unchanged in September, versus the previous 0.2 percent increase. Meanwhile, final demand prices rose 0.2 percent for the month, and 1.8 percent compared to the same month last year. Core PPI rose 0.2 percent for the month, slightly lower than July’s 0.3 percent figure while meeting expectations.

The UoM Consumer Sentiment report showed a slight decrease in October, with the index dropping 1.2 points to 68.9. Despite the decrease, sentiment remains stronger than a year ago, with the index increasing 8 percent y/y. Long term business conditions have improved, while consumers continue to express concerns about rising prices. With the November elections coming up, some consumers appear to be withholding judgment about the longer term trajectory of the economy. The US dollar index closed the week at 102.890.

In September, Canada added 46.7k jobs, marking a 0.2 percent increase and pushing the unemployment rate down to 6.5 percent, down from 6.6 percent previously. Gains were seen among youths (aged 15-24) and core aged women (aged 25 to 54). Sectors like information, culture, wholesale, and technical services saw notable growth. Provinces like Ontario and Quebec saw growth, while British Columbia saw declines. Meanwhile, average hourly wages rose 4.5 percent, a softer pace than the 4.9 percent increase recorded the previous month. Participation rate also declined slightly to 64.9 percent, down from 65.1 percent The USD/CAD currency pair closed the week at 1.3762.

UK gross domestic product

UK’s economy grew by a modest 0.2 percent in August, meeting expectations and marking an increase from July and June’s no growth figures. Services output grew by 0.1 percent, while production output grew by 0.5 percent following a revised 0.7 percent fall in July. Construction output grew by 0.4 percent, after falling 0.4 percent in July. In a statement by Rachel Reeves, Chancellor of the Exchequer, Rachel stated that "Growing the economy is the number one priority of this government so we can fix the NHS, rebuild Britain, and make working people better off”. The GBP/USD currency pair closed the week at 1.3066.

Australia consumer sentiment

The Australian Westpac-Melbourne Institute Consumer Sentiment Index for October 2024 shows an increase of 6.2 percent, reaching 89.8. The report highlights sharply falling consumer expectations for interest rates, with cost-of-living pressures moderating. Moreover, there are signs that homebuyer sentiment has improved. The AUD/USD currency pair closed the week at 0.6750.

The Reserve Bank of New Zealand has decided to lower its official cash rate by 50 basis points in its October meeting, reaching 4.75 percent. The reduction in rates is considered the second rate cut of the year and in line with market expectations, after inflation in New Zealand reached 3.3 percent in Q2 of 2024, down from 4.0 percent the previous quarter and below market expectations of 3.5 percent. The RBNZ has decided to give little indication about future moves, while emphasizing that they intend to avoid unnecessary instability in output, employment, and exchange rates. The NZD/USD currency pair closed the week at 0.6109.

Japan’s producer price

Japan’s producer prices increased by 2.8 percent y/y in September 2024, up from 2.6 percent in August and exceeding market expectations of 2.3 percent. This marked the 43rd consecutive month of producer inflation, driven by rising costs in various sectors such as transport equipment, electrical machinery, and beverages. Prices for petroleum, coal, and iron & steel also rebounded. However, some categories, like non-ferrous metals, saw slower price increases. On a monthly basis, producer prices remained flat, beating the forecasted 0.3 percent decline, after a 0.2 percent drop in August. The USD/JPY currency pair closed the week at 149.13.

Kuwait

Kuwaiti dinar

USD/KWD closed last week at 0.30585.