Overnight
A softer-than-expected US jobs report reset the rate debate heading into the weekend. Non-farm payrolls rose by just 29,000 in September, well short of the roughly 84,000 forecast, and the unemployment rate ticked up to 4.2%; revisions stripped a further 60,000 jobs from July and August combined. New York Fed president John Williams said there was "no need for urgency" on the next move. Futures markets now put October hike odds near 17%, down from about 36% a week earlier; December remains the live question, priced at roughly nine-in-ten.
Asia and Europe
European Central Bank board member Olli Rehn told a financial-stability conference this week that surging bond yields are already doing some of the central bank's work, slowing growth and blunting how much of the latest energy-price spike reaches consumers — even as he warned the economy is edging toward the ECB's "adverse" inflation scenario. Eurostat's flash estimate put September euro-area inflation at 3.8%, above forecasts and the highest since 2023, with energy costs up close to 19% on the year and core inflation at 2.5%. Asia closed out the week mixed: Hong Kong's Hang Seng gave up 2.6%, Tokyo's Nikkei slipped about 0.9%, while Wall Street and European benchmarks finished firmer, led by a 1.2% gain on the Nasdaq.
FX, rates and commodities
The US 10-year yield sits just above 5.25%, still near its highest levels since the early 2000s as markets weigh a Fed on pause against an ECB facing fresh inflation pressure. The euro eased against the dollar on the inflation print and Rehn's remarks; the yen held in the upper 157 area. Gold stayed supported above US$4,100 an ounce and oil firmed near US$91 a barrel.
The day ahead
Markets are shut for the weekend. Mainland China's Golden Week holiday runs through October 7, keeping cross-border tourism and onshore volumes in focus into next week. From here it is a data story rather than a decision story: watch for the next US inflation print and any further ECB commentary ahead of the Fed and the ECB's own late-October meetings.
One number
3.8% — the Eurozone's September inflation rate, its highest in three years and more than double the ECB's target, even as the central bank leans on higher yields to help do the work.
One read
Reuters' write-up of Rehn's remarks this week is the clearest statement yet of the ECB's uncomfortable position: welcoming tighter financial conditions as an inflation brake while admitting the energy shock itself is far from over.
