Economic context
The soft landing of the U.S. economy has continued and the process of global disinflation is still ongoing. Can the conflict between Israel and Hamas derail this scenario? This is unlikely as long as there is no conflagration of the Middle East and extension to Israel's neighboring countries.
In the United States, manufacturing activity picked up slightly, while services activity remained at a decent level. With a job market still buoyant in September with more than 300k private sector jobs created, soft landing is still relevant. Nevertheless, we believe that growth will slow more sharply by the end of the year in view of the letters of intent to lay off and the coming decline in consumption, which in turn has been accelerated by the rebound in the price of petrol at the pump. History shows that we must be careful with the idea of a soft landing as it is difficult to predict the evolution of the economy. One thing is certain, however, that price growth continues to moderate and inflation to fall, albeit at a slower pace than in the first half of the year.
In Europe, there were no surprises, with a continued and combined contraction in manufacturing and services. Two countries stand out, however, since German industry continues to slow down and France is falling sharply in services. Thanks to the economic slowdown, inflation is falling rapidly with price decreases recorded during the quarter and everything suggests that disinflation will continue.
In China, visibility remains limited. While the official Purchasing Managers’ Index (PMI) are timidly recovering and a slight improvement in industrial production has been recorded, consumer prices are once again flirting with deflation and the country has recorded the fifth consecutive month of decline in exports. While there is nothing to expect from the real estate sector, the government is considering further announcements to support the economy.
Central Banks