The US economy continued to demonstrate strength in October, according to the latest flash PMI data.
October’s flash US PMI survey showed a continued rise in business activity, marking a strong start to the fourth quarter. This growth was driven solely by the service sector, as manufacturing output declined for the third month. Employment also saw a slight decrease for the third month in a row, reflecting uncertainties related to the Presidential Election.
However, confidence in the outlook for the upcoming year rebounded after a significant dip in September, with companies predicting more stability and certainty post-election. The survey also reported a slower pace of inflation for input costs and prices charged, with the latter dropping sharply to its lowest level since May 2020, largely due to a significant easing in service sector inflation.
Source: S&P Global
Markets ended the week focused on central bank policy and geopolitical developments as the ECB delivered its expected rate hike while investors assessed the outlook for further tightening.
Markets remained cautious on Thursday as investors balanced rising geopolitical risks with key central bank expectations. The dollar index neared a two-month high at 100 as Middle East conflict risks and inflation acceleration kept December Fed hike bets alive.
Markets turned their attention to the European Central Bank on Wednesday as the euro recovered modestly from recent lows.
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