Another Upbeat Day in the Marketplace in Spite of Ongoing U.S. Shutdown and a Disappointing ISM Non-Manufacturing PMI Report – Currency Thoughts
Another Upbeat Day in the Marketplace in Spite of Ongoing U.S. Shutdown and a Disappointing ISM Non-Manufacturing PMI Report
October 3, 2025
U.S. equities rose further into record territory, led by a 1.2% advance thus far in the small cap-laden Russell 2000 (+1.2%) and a 0.9% climb in the DOW. Key stock markets from other economies have also experienced a fine day, with advances of 2.7% in South Korea, 1.5% in Taiwan, 1.9% in Japan, and 0.6% in the U.K. and Spain.
Prices for oil, bitcoin and gold are currently showing gains of 1.0%, 0.9% and 0.6%.
The 10-year U.S. Treasury and Japanese JGB yields are up two and one basis points, respectively, while their French and Spanish counterparts have eased a basis point.
The dollar relinquished some ground on this Friday, slipping 0..3% against the kiwi, peso and sterling, 0.4% relative to the Swiss franc, and 0.2% versus the euro and Australian dollar. There was one disappointing U.S. data point out this mid-morning, but this first Friday of the month was missing labor market news from the Bureau of Labor Statistics due to the federal government shutdown. While the lack of this crucial report is concerning to the Federal Open Market Committee, which is flying without being sure where the economy is going, the lack of such potentially surprising news is one less thing for financial market participants to worry about.
Today’s piece of souring news in the form of the Institute of Supply Management’s U.S. non-manufacturing purchasing managers survey for September, which showed a much sharper deterioration than analysts were predicting. the overall PMI fell 2.6 index points to a stagnant reading of 50.0, weighed down by an air pocket in demand and and production and associated with a much higher reading on price pressure.
Although not nearly as alarming as the ISM’s survey, the S&P Global-compiled U.S. composite and service sector PMI scores for September retreated to 3-month lows of 53.9 and 54.2.
Among PMI news for other economies released today, Euroland’s composite survey scored a 16-month high of 51.2 (including an 8-month peak in the service sector figure) and was all in all consistent with quarterly GDP growth of about 0.4% (not annualized) in the summer quarter that just ended. The German, Italian and Spanish composite PMI scores of 51.5, 52.5 and 54.3 constituted their best levels in 8, 4 and 2 months. The French 48.5 reading was down from 49.8 in August and at a 2-month low, however.
In spite of a 2-month high in services, Japan’s composite PMI slid 0.8 points to a 4-month low of 51.3.
Great Britain’s revised September PMI surveys yielded 5-month lows in the composite index of 50.1 and also in services of 50.8. In August, those readings had been at 53.5 and 54.2.
A 37-month high in service sector activity lifted Sweden’s composite PMI from a respectable 53.9 in August to a robust score of 57.1 in the ensuing month.
Australian composite and service PMI’s were each at 52.4 last month, their lowest readings in 3 months.
Composite and service-sector PMI readings for Brazil in September of 46.0 and 46.3 were each close to 5-year low points.
Canada’s composite and service PMIs were also below 50 and at 3-year lows of 46.3.
Manufacturing purchasing manager surveys reported today included a 7-month high in Lebanon of 50.3, a 6-month high in Singapore of 50.1 and a 2-month high of 50.2 for South Africa. The non-oil PMI of the United Arab Emirates climbed 0.9 points higher to a 7-month peak of 54.2.
Inflation data reported today included
- August dips of 0.3% on month and 0.6% on year in Euroland producer prices. The on-year reading was its most deflationary indication in nine months. A comparison of July-August PPI to the second quarter average was still 0.6% into positive territory, however.
- Turkish CPI inflation accelerated 0.3 percentage points to 33.3% in September. The uptick was the first one of 2025 and came as a surprise to forecasters. Producer price inflation also accelerated in Turkey last month, rising by 1.4 percentage points to an 8-month high of 26.6%. Turkey is an often-cited example from the post-covid era of the inflationary dangers posed when political leaders tried to override monetary policy independence.
- Armenian and Georgian consumer price inflation had September readings of 3.7% and 4.8%, respectively.
French industrial production defied expectations of an increase in August, instead slumping by 0.7%. The on-year rise of output as a result imploded to 0.4% from 1.8% in July and 1.7% in June.
Copyright 2025, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: composite and service sector purchasing manager surveys, Turkish CPI and PPI
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