Global News Summary 29 Oct to 4 September 2025
The final week of September into early October was dominated by the US government shutdown, Fed uncertainty, and AI-driven market exuberance. While the Fed continued to debate rate-cut pacing, shutdown risks triggered safe-haven flows into gold (new highs) and Treasuries, while equities held firm on AI optimism. Europe grappled with debt, inflation divergences, and policy signaling, while the UK faced sticky inflation and fiscal strains. China’s industrial and factory data showed mixed resilience, while Australia’s economy outperformed expectations. Globally, synchronized yield curve steepening signaled more reflationary soft-landing bets than recession fears, though risks of fiscal overhang and policy missteps remain.
United States (USD)
Politics & Shutdown: Trump met congressional leaders (29 Sep) ahead of a shutdown that began on 2 Oct, threatening hundreds of thousands of jobs and billions in lost output. White House signaled layoffs targeting Democratic districts.
Economy: GDP surged +3.8% Q2 (Q1 –0.6%, est +3.3%) on stronger consumer spending (+2.5%, est +1.6%).
Jobs: ADP reported –32k payrolls in Sep (cons +50k). Shutdown delayed official NFP release.
Monetary Policy: Fed officials split — Miran supported a 50bps cut, Goolsbee warned against rushing cuts, Powell pushed back on aggressive easing.
Markets: Dollar swung sharply, weakening into Oct 4. 10Y yields held ~4.12%. Gold hit $3,887/oz on Oct 4, 7th weekly gain. Equities stretched — S&P 500 longest streak since July (114 sessions w/out 5% pullback).
United Kingdom (GBP)
Inflation: OECD projected UK inflation +3.5% in 2025 (2024 +2.5%), the highest in G7. Shop price inflation rose to 1.4% in Sep (Aug 0.9%).
Housing: House prices rose 0.5% MoM in Sep, supported by jobs and wage growth. GLA plans to cut affordable housing requirements to spur construction.
Fiscal Policy: Reeves hinted at breaking election tax pledges to maintain fiscal discipline. Businesses warned against another tax raid at Labour’s conference.
Monetary Policy: BOE split — Bailey open to further cuts, Greene wanted to pause; Mann warned inflation expectations drifting away from 2% target.
Eurozone (EUR)
Debt & Fiscal: Morningstar downgraded French debt to AA from AA(high). ECB officials (Lagarde, de Guindos, Makhlouf) signaled steady policy but openness to adjustments.
Growth: France/Italy inflation accelerated (1.1% and 1.8%), Germany at 2.4%, EZ overall inflation 2.2% in Sep. PMI improved slightly to 51.2. Spain raised 2025 growth forecast to 2.7%.
Policy Risk: EU prepared to join US/Canada in slapping tariffs (up to 50%) on Chinese steel. Draghi warned EU competitiveness is in retreat.
Japan (JPY)
Economy: Confidence among large manufacturers rose to 14 (prev. 13), showing resilience despite US tariffs. Exports fell –0.1% YoY Aug, led by cars and steel.
Monetary Policy: BOJ likely to hold rates at 0.5% but pressure is mounting for hikes; one board member urged not to be overly cautious. Speculation rising for a move by year-end.
China (CNY)
Growth & Industry:
Industrial profits surged +20.4% YoY in Aug.
Factory activity: 49.8 in Sep (Aug 49.4) — 6th straight monthly contraction, longest since 2019.
Retail sales growth slowed (Aug +3.4% vs cons 3.9%).
Trade: Trump tightened semiconductor export curbs (30 Sep). Xi pressed firms to tackle overcapacity price competition.
Markets: Hang Seng Tech Index up +41% YTD on AI and chip self-sufficiency push.
Australia (AUD)
Fiscal: Reported narrower 2025 deficit than forecast, thanks to strong employment.
Inflation: +3% YoY in Aug, mainly housing.
Housing: Home prices surged +0.8% in Sep, strongest in 2 years, driven by supply shortages and incentives.
Policy: RBA to weigh stronger-than-expected performance at its next meeting.
New Zealand (NZD)
Growth: Q2 GDP –0.9% (Q1 +0.9%, cons –0.3%).
Confidence: Consumer confidence rose to 94.6 in Sep (Aug 92).
Artificial Intelligence (AI)
US/UK:
Nvidia in talks for $500mn investment in Wayve (UK); broader £2bn UK AI pledge.
Nvidia planning $100bn OpenAI stake, joint infra build.
OpenAI Stargate data center project now $400bn; valuation hit $500bn after secondary sale.
Microsoft integrating Anthropic models into its AI assistant and bundling AI into Office.
ESG / Other Themes
UK businesses urged Labour to address health-related workforce crisis.
Meta to use chatbot conversations for targeted ads, sparking privacy debates.
EU pushing joint steel tariffs with US/Canada to counter China’s cheap supply.
Inflation
US: PCE +0.2% MoM, +2.9% YoY (in line).
EZ: Inflation rose to 2.2% Sep.
Germany: +2.4% (Aug +2.1%).
UK: OECD forecast +3.5% in 2025.
France/Italy: 1.1% and 1.8%.
Australia: +3% YoY.
Recession Risks
Yield Curves: Steepened globally, suggesting reflationary outlook rather than recession.
Jobs: US ADP payrolls shock (–32k) raised short-term slowdown fears, but GDP and spending strength counterbalanced.
ISM Services: First contraction since pandemic, signaling demand cooling.
Market Tone: Despite slowdown signals, equities remain buoyant, suggesting recession risks may be overpriced relative to yield-curve and market signals.