New Month Beckons With Continuing U.S. Federal Shutdown, October Batch of Manufacturing PMI Surveys, Some Price Data and a Japanese Holiday Closure – Currency Thoughts
New Month Beckons With Continuing U.S. Federal Shutdown, October Batch of Manufacturing PMI Surveys, Some Price Data and a Japanese Holiday Closure
November 3, 2025
Economic pain from the unresolved 5-week-old U.S. federal government shutdown is expected to intensify in early November. On this first business day of November, manufacturing purchasing manager surveys have been reported for a slew of countries, but Japanese markets are closed for the Culture Day holiday. Two news highlights today are President Trump’s disclosure that sales of the most sophisticated chips produced by Nvidia will be limited to U.S. firms and an announcement by OPEC+ that the progressive increase of oil production is to halt after December.
Financial markets continue to react to Fed Chairman’s recent admonishment that another rate cut in December should not be considered a foregone conclusion. The recent FOMC meeting experienced a wide diversity of strongly held opinions on both sides about about interest rate decisions beyond last month’s 25-basis point easing. Ten-year sovereign debt yields today are two basis points higher than Friday closing levels in the United States, Germany, France and Spain, and there have been one-basis point increases in Italy and the United Kingdom.
Also, the dollar is trading firmly on this first session of the new month, with gains of 0.3% against the Swiss franc, 0.2% versus the euro and Canadian dollar and 0.1% relative to the yen and sterling. The weighted DXY dollar index is hovering around a 3-month high, but a flat to modestly higher uptick is suggested by U.S. stock futures. Equities in the Pacific Rim closed up 2.8% in South Korea, 1.4% in Indonesia, 1.0% in Hong Kong and 0.6% in China. A 1.1% advance of the German Dax leads other major European equity advances so far this session.
Bitcoin, whose price dropped dropped over 4% during October, declined 2.3% overnight, and gold continued to grind slowly higher. Oil has held steady this Monday.
Euroland’s manufacturing purchasing managers index for October was left unrevised from the 2-month high of 50.0 estimated originally. The result, with both the overall PMI measure and the sub-index for orders straddling the threshold separating improvement from deterioration, signals a “delicate sprout of recovery” but no more than that. Inventories continue to be run off, and 1-year ahead expectations printed above 50 but below September’s level.
Within the joint European currency bloc, the results for Greece, Spain, Italy, Germany, Austria and France each printed also at a two-month high, but Ireland’s 50.9 reading was at a 10-month low. The Dutch manufacturing PMI had climbed toa 38-month high of 53.7 in September but relapsed to a 4-month low of 51.8 last month. At 53.5, Greece topped the euro area leader board, while France’s reading of 48.8 was the lowest figure.
The British manufacturing PMI for October was revised marginally higher and edged closer to 50 with a one-year high of 49.7. In Switzerland, which faces the highest tariff levy of any European economy and suffers additionally from a chronically overvalued franc that poses a deflationary risk to that economy, the manufacturing PMI recovered to a 2-month high but again fell short of 50 with a reading of 48.2.
In Eastern Europe, the PMI scores of Romania (47.6), Poland (48.8) and the Czech Republic (47.2) were all under the neutral 50 level, and Hungary’s index dropped 0.6 points to a 2-month low of 51.0. Russia’s PMI slid to a 3-month low of 48.6, its fifth straight sub-50 reading.
Sweden‘s PMI declined half a point to a 3-month low but stayed comfortably above 50 at 55.1. Norway‘s reading fell 2.2 points to a 6-month low of 47.7.
Turkey‘s manufacturing PMI fell to a 3-month low of 46.5. The lower-than-expected Absa-compiled South African PMI dropped 1.6 points to a 4-month low of 49.2. Australia‘s manufacturing PMI was left unrevised from the 10-month low of 49.7 reported earlier.
Turning to Central and East Asia, China’s 51.2 factory PMI slipped below expectations and the previous month’s six-month high to a 2-month low of 51.2. South Korea also posted a 2-month low, dropping under 50 to 49.4, and Malaysia’s PMI of 49.5 constituted a 4-month low. In contrast, India’s PMI reading among manufacturers was revised upward to a 2-month high of 59.2. The Thai and Vietnamese readings of 56.6 and 54.3 were at 29- and 15-month highs. Indonesia’s PMI improved 0.8 points to a 2-month high of 51.2, and a score of 50.1 for the Philippines was also at a 2-month high. Although below 50 at 47.7, Taiwan’s PMI was the best score in 5 months. In Singapore, the SIPP-compiled PMI (50.0 in October) has fluctuated hardly at all in a 49.9-50.1 range for 5 straight months.
Brazil’s manufacturing PMI stayed in contractionary territory (48.9), but the rate of slide was the slowest in 3 months.
Turkey continues be a prime example of the inflationary trouble that can result when politicians attempt to override independent monetary policymaking. Consumer price inflation in Turkey peaked like in many other economies in October 2022 but at the particularly elevated level of 85.5%. After receding to 38.2% in June of the following year, it spiked back up 75.45% in May 2024. While down to 32.9% by last month, a 47-month low, the rate of improvement has slowed to a barely discernible crawl. And Turkish producer price inflation, also reported today, was at a 9-month high of 27.0% last month.
At the other extreme, Swiss consumer prices fell 0.3% on month in October, resulting in the lowest on-year rise (just 0.1%) in four months. Core Swiss consumer price inflation of 0.5% matched May’s 0.5%, which had been the lowest reading since September 2021.
In between, consumer price inflation in Kazakhistan slid below September’s 25-month high of 12.9% to 12.6% last month. Pakistani CPI inflation of 6.2% last month was its highest in a year and up from 0.3% in April. And in Georgia, inflation has also climbed lately, reaching a 31-month high of 5.2% in October versus just 0.3% posted a year earlier in October 2024.
Copyright 2025, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: manufacturing purchasing manager surveys, Swiss and Turkish CPI
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