US Economic Indicators
Despite having a government shutdown, ADP employment changes printed 32,000 job losses after its last revision to 3K, supporting on seeing a fragile labor market, while the market believes that this could reflect on cautious hiring from businesses.
Meanwhile, the ISM manufacturing purchasing managers’ index also dropped lower than the benchmark of 50, except for pricing in goods, suggesting a contracting growth in this sector, particularly in the employment level. So these two data—poor labor and inflation fear—along with the government shutdown that could lead to more disruption in the economic growth and raise more doubt on the labor market, all are pushing the FED to fully price in a 25 bps rate cut this time.
***Furthermore, the Labor Department also reported a delay in September’s nonfarm payroll this week in response to the government shutdown. Therefore, we only see the ISM non-manufacturing PMI data release on Friday.
The Federal Reserve
Meanwhile, the Supreme Court also denied Trump’s immediate ouster of the FED’s Lisa Cook, which will likely set oral argument on Trump’s bid for January. This also means the FED Governor Lisa Cook still remains in place for now.
Pharma Tariff
After his threat of 100 percent tariffs on certain drugs last week, the White House now says it may not need to impose them, leaving some confusion in the market, although some tension over the tariffs has somewhat eased. As per Lutnick, “going to let [the talks] play out and finish these negotiations, because they are the most important thing to the American people.”
Other Information:
- On September 29, President Trump signed an executive order on Qatar’s security, stating that the U.S. will view any armed assault on the nation as a direct danger to American peace and security.
- Trump on Truth Social, “In four weeks, I’ll sit down with China’s President Xi, and we’ll dive deep into soybeans as a key issue.”
