The end of US government shutdown was not enough to drive a lasting recovery in markets’ risk appetite, with equity and bond markets weakening towards the end of the week. While the government reopening itself has a positive impact on the economy, the focus remains on the backlog of key US macro data which is now set to be released over the next few weeks. The latest Fed speakers have sounded increasingly hawkish and notably, three of the new incoming voters for 2026 (Kashkari, Logan and Hammack) have all said they opposed the previous decision to cut rates in October. Markets price the Fed’s December rate decision as essentially a coin-flip between a cut and a hold, and we maintain our call for an unchanged rate decision.
The first major datapoint due for release will be the September Jobs Report, out most likely early next week. September JOLTs, PCE and Q3 GDP are expected to follow within roughly a week. The fate of October releases remains less clear, as the shutdown interfered with the data collection periods. The Bureau of Labor Statistics (BLS) could receive some responses for the October establishment survey (used for calculating the nonfarm payrolls) as it collects the November data. But the household survey, which is used to calculate the unemployment rate, is missing completely. Similarly, 2/3 of the inflation data for the CPI is collected with in-person visits to stores and is now also naturally missing.
As such, the White House suggested the October releases might even be cancelled altogether. Alternatively, BLS could release delayed, and heavily imputed estimates in conjunction with the November data. In any case, the November Jobs Report (scheduled for December 5th) will be the first major ‘real-time’ release to look out for. The data collection for November reports should have already started, so minor delays are still possible. This could end up being problematic for the Fed, as the important November CPI report is scheduled for the same day as the FOMC’s next rate decision (10 December).
But while we wait, incoming data flow has generally been weaker than expected. The latest German ZEW index disappointed as the future expectations component declined. Similarly, the Sentix index of Euro Area investor confidence fell (-7.4, from -5.4) against expectations of a modest rebound. UK employment growth turned negative in October (-32k) as did the September estimate of GDP growth (-0.1%). October credit and production data from China signalled that support from past stimulus measures is starting to fade. And finally, the weekly private sector payroll estimates from ADP showed that US employment growth turned negative (-11k per week) during the four weeks leading up to October 25th.
As such, we will closely follow next Friday’s flash November PMIs from euro area, the UK and the US to gain a clearer sense of the current growth momentum. PMIs have signalled improving growth outlook across developed markets through most of this year.
ECB’s indicator of negotiated wages is due for release on Friday. While wage pressures remain a key indicator for gauging underlying inflation, the indicator is heavily influenced by one-off inflation compensation bonuses from last year. And finally on the other side of the Atlantic, the minutes from FOMC’s October meeting could gather more attention than usual given the highly varying views heard from Fed speakers lately.
 could receive some responses for the October establishment survey (used for calculating the nonfarm payrolls) as it collects the November data. But the household survey, which is used to calculate the unemployment rate, is missing completely. Similarly, 2/3 of the inflation data for the CPI is collected with in-person visits to stores and is now also naturally missing.){kind=link}