Key Highlights

• U.S. federal government shutdown begins as lawmakers fail to agree a spending deal.
• Reserve Bank of India keeps rates on hold at 5.50% and unveils measures to help exporters affected by U.S. tariffs.
• Taiwan trade negotiator will not agree to 50-50 chip production deal with U.S.; Premier Cho Jung-tai notes tariff talks ongoing.

Chart of the Day

Cross-border USD flows during last shutdown, December 2018-January 2019

^{Source: BNY}

The last shutdown in the U.S. occurred between December 2018 and January 2019 and lasted 35 days – the longest in history – leading to significant turbulence in markets. This time, it appears the only concern is the lack of data for market participants and central banks to make a more informed judgment on the U.S. economy; otherwise, calm continues to prevail. Domestic investors have the comfort of a comparatively far more dovish Fed as insurance, while the supportive factors for risk, especially in equities, are more insulated from cyclical factors than in 2018-19. For international investors, although a potential shutdown is another reminder of some of the institutional factors which have impacted the notion of “U.S. exceptionalism,” we are not detecting any sign of stress relating to the specific risk. Furthermore, comparing current flows with realized flows during December 2018 and January 2019, we note that international investors’ behavior is not a one-way street against the U.S. either. For example, we note that during those two months, the dollar was generally bought and the greenback achieved an admirable two-month flow average of 0.10. The Fed was offering higher rates, which supported the ongoing removal of dollar hedges, and we suspect that risk aversion generated a liquidity scramble such that owning dollars was the preferred approach during the process. There was only one concentrated round of selling around mid-January, but at no point did the dollar even hit flow magnitudes of 1.0 in either direction. Presently, we can see the dollar is net bid again, as the market is now pulling back from the dovish narrative established during the September Fed meeting. Even so, “cutting less” is very different to “more hikes,” which was the case in 2018, even though both are now having the same impact of dollar hedges being removed.

What's Changed?

The U.S. government shutdown has brought further USD selling, with the currency down for a fourth consecutive day, while sending gold to a new record high near $3,900 and equities lower. Investors are on the watch for any economic data that shifts the mood away from business as usual. Caution is dominating the start of Q4, even with improved economic data in Japan and mixed PMI numbers in Europe overlaid with higher inflation. Global bond yields are higher, and the focus now shifts to the U.S. data, which look more important, with ADP jobs the best private sector version of the BLS’s non-farm payrolls. The ISM jobs components will also be a guide, but a less impactful one. The growth outlook for markets is shifting, with energy the barometer: oil prices fell further today, down another 0.5%. This reflects expectations of OPEC+ output increases for November (talk of 500,000 barrels/day), countered by ongoing disruption of energy infrastructure due to the Ukraine/Russia war, and the U.S. API report showing another weekly crude oil drawdown in inventories. The EIA report today will be key. How investors see the quarter ahead will also pivot on valuations. The focus on U.S. growth linked to AI investments is one theme; the rising multiples in APAC and EMEA shares without commensurate earnings are another. There are worries about the scale of the impact of the U.S. government shutdown on the country’s economy, but that unknown looks untradable for now. Volatility across asset classes into Q4 remains tame: VIX (S&P 500 volatility) is up 3% m/m but remains well below 20%. MOVE (U.S. bond volatility) is down 11% m/m but up since mid-September, and better U.S. data have driven rethinking of the Fed’s terminal rate. G10 FX volatility is down 5% m/m and holding near its YTD lows. The USD weakness trend is back in focus, and hedging risks combined with growth fears are the main drivers, with mid-October Q3 earnings likely to be the next focus for rethinking value and growth. 

What You Need to Know

Japan’s quarterly Q3 Tankan survey saw sustained improvement, with confidence hovering at historically high levels for both the manufacturing and non-manufacturing sectors. Large manufacturing enterprises were at 14 points (Q2: 14) while small manufacturing enterprises were unchanged at +1. In the non-manufacturing sector, large enterprises were unchanged at 34, while small enterprises eased slightly from +15 to +14. The inflation outlook for enterprises is unchanged at 2.9% for the next 12 months, but down slightly to 4.3% and 5.1% for the 3y and 5y periods, respectively. Nikkei -0.833% to 44558.23, USDJPY -0.291% to 147.47, 10y JGB +0.4bp to 1.652%.

India’s Monetary Policy Committee has kept the policy repo rate unchanged at 5.50% with a neutral stance, citing a balance between moderating inflation and resilient but externally vulnerable growth. Headline CPI inflation has eased to multi-year lows, aided by a sharp fall in food prices, stable fuel inflation and GST rate rationalization, with the 2025-26 forecast cut to 2.6% from 3.1% previously. Growth remains supported by strong domestic demand, favorable monsoon conditions and momentum in services, though external risks from tariffs, trade uncertainties and geopolitical tensions temper the outlook. While the current environment provides space to support growth, the committee has opted to wait for the effects of earlier monetary easing and fiscal measures to materialize. Two members favored shifting the stance to accommodative, but the majority supported a neutral stance. SENSEX +0.53% to 80693.04, USDINR -0.127% to 88.6763, 10y INGB +1.1bp to 6.588%.

Euro area annual inflation rose to 2.2% in September from 2.0% in August, according to Eurostat’s flash estimate. Services posted the highest annual rate at 3.2% (up from 3.1%), followed by food, alcohol and tobacco at 3.0% (down from 3.2%), while non-energy industrial goods were stable at 0.8%. Energy inflation remained negative at -0.4% but improved from -2.0% in August. Among member states, the highest rates were in Estonia at 5.2%, Latvia at 4.1% and Croatia at 4.6%, while the lowest were in Greece at 1.8%, France at 1.1% and Italy at 1.8%. Germany registered 2.4% and Spain 3.0%. Euro Stoxx 50 +0.42% to 5529.96, EURUSD +0.162% to 1.1753, BBG AGG Euro Government High Grade EUR +1.1bp to 2.927%.

BoE policymaker Catherine Mann said U.K. monetary policy remains “relatively loose” and stressed that interest rates should stay on hold at 4%. She warned that persistently high household inflation expectations pose a risk and argued that tightening further would only necessitate loosening later. While ruling out backing another rate hike, she cautioned that the MPC must avoid a “policy boogie.” Mann noted that the BoE’s scenario of more persistent inflation is materializing, with the U.K. an outlier due to supply constraints, energy shocks and expectations above target. She added that U.S. tariffs have not eased U.K. price pressures, with domestic factors remaining the key concern, though global financial spillovers are also influencing U.K. policy. FTSE 100 +0.544% to 9350.43, GBPUSD +0.09% to 1.3458, 10y gilt -0.1bp to 4.699%.

What We're Watching

U.S. September ADP employment change expected at 51k vs. 54k in August.

U.S. September ISM manufacturing is forecast to rise from 48.7 to 49, while ISM prices paid is seen easing from 63.7 to 62.9, with employment rising to 44.3 from 43.8.

U.S. August construction spending is seen at -0.1% m/m, in a fourth straight monthly decline.

U.S. Treasury sells $67bn in 17-week bills.

What iFlow is Showing Us

Mood: iFlow Mood drifted back into negative territory with sentiment in equities deteriorating to net selling, against low demand for core sovereign bonds.

FX: USD, DKK and NZD were bought, against selling in the rest of G10. LatAm currencies were sold, above all COP, while flows in EMEA and APAC were mixed.

FI: Strong demand for U.K. gilts continued, followed by U.S. Treasurys and Eurozone, Canadian, Singapore and Chinese government bonds. New Zealand government bonds were most sold.

Equities: EM America was the only region with inflows, against outflows in the rest, led by EM EAPAC followed by DM Americas. Switzerland, Norway, Czechia, Poland, China and Taiwan equities were significantly sold. Within EM APAC, the materials sector saw moderate buying, against significant selling in the communication services and financial sectors, followed by information technology, consumer staples and health care.

Quotes of the Day

“Time is really the only capital that any human being has, and the only thing he can’t afford to lose.” – Thomas Edison

“Whenever you are to do a thing, though it can never be known but to yourself, ask yourself how you would act were all the world looking at you, and act accordingly.” – Thomas Jefferson

Economic Details

Eurozone manufacturing PMI slipped to 49.8 in September from 50.7 in August, returning to contraction territory and marking a two-month low. The production index eased to 50.9 from 52.5, still showing growth but at a slower pace, while new orders fell at the steepest rate in six months, dragging confidence lower. Employment declined at an accelerated pace, and inventories of inputs and finished goods were reduced again. Prices fell slightly, with both input and output charges down. Among member states, the Netherlands led with 53.7, its strongest expansion since mid-2022, while Germany (49.5), France (48.2) and Italy (49.0) all remained in contraction. Euro Stoxx 50 +0.42% to 5529.96, EURUSD +0.162% to 1.1753, BBG AGG Euro Government High Grade EUR +1.1bp to 2.927%.

Germany’s manufacturing PMI stood at 49.5 in September, down from 49.8 in August, signaling contraction despite output growth. The output index rose to 53.0, its strongest level in 42 months, with production increasing across all major sectors; this was led by investment goods, which were supported by backlogs. However, forward-looking indicators weakened: new orders fell for the first time in four months, employment declined at the fastest pace since June, and business expectations slipped to a nine-month low amid tariff pressures, global competition and geopolitical uncertainty. Purchasing activity fell for a second successive month, while supplier delivery times lengthened for the first time since 2022. Input costs fell sharply, driven by a strong euro and cheaper sourcing. DAX +0.571% to 23880.72, EURUSD +0.162% to 1.1753, 10y Bund +0.4bp to 2.711%.

France’s September manufacturing PMI fell to 48.2 from 50.4 in August, moving below the 50.0 threshold and signaling a modest deterioration in operating conditions. Output volumes contracted at the fastest pace since February, with new orders declining at a broadly similar rate, particularly in the investment goods sector. Exports weakened on U.S. tariffs and sluggish global demand, while political uncertainty following the fall of the Bayrou government weighed further on expectations. Purchasing activity and inventories decreased, with finished goods stocks posting their sharpest fall in almost five years. Despite weak demand, employment rose marginally for a fifth month in a row, though hiring slowed. Input costs rose moderately, but competitive pressures led firms to reduce factory gate prices. CAC40 +0.191% to 7895.94, EURUSD +0.162% to 1.1753, 10y OAT +0.1bp to 3.534%.

Italy’s September manufacturing PMI dropped to 49.0 from 50.4 in August, marking the sharpest decline in operating conditions since June and signaling renewed contraction. Output and new orders fell, with new business dropping at the fastest rate since June as firms cited customer hesitancy amid economic uncertainty. Export orders contracted at the fastest pace since March, particularly from Europe, the U.S. and Asia. Purchasing activity and inventories declined sharply, while input costs rose at the fastest pace in six months, led by higher prices of raw materials such as copper. Selling prices remained flat due to competition, but employment increased for the first time in a year, supported by investment and business expansion plans. FTSEMIB +0.402% to 42725.32, EURUSD +0.162% to 1.1753, 10y BTP +0.1bp to 3.534%.

Spain’s manufacturing PMI registered 51.5 in September, down from 54.3 in August. This marks the slowest expansion since June but is still above the 50.0 threshold for a fifth consecutive month. Output and new orders rose at weaker rates, with production growth the softest in four months and export orders falling for the first time in three months amid tariffs and political uncertainty. Employment fell for the first time since February as firms held back on replacing staff. Purchasing activity was little changed, though inventories of inputs rose and supplier delivery times lengthened. Input costs increased modestly, led by metals and food, while selling prices declined fractionally under competitive pressure. IBEX 35 +0.874% to 15508.1, EURUSD +0.162% to 1.1753, 10y Bono -0.7bp to 3.257%.

The U.K.’s manufacturing PMI fell to 46.2 in September from 47.0 in August, its lowest level in five months and below the neutral 50.0 mark for the twelfth consecutive month. Output contracted for the eleventh straight month, led by consumer, intermediate and investment goods, while new orders dropped sharply on weak domestic demand, subdued export orders from the U.S., the EU, the Middle East and Asia and supply disruptions in the auto sector. Employment declined for the eleventh month in succession, with firms cutting staff to offset higher labor and energy costs. Input buying and inventories were reduced, though intermediate goods stocks rose slightly. Cost pressures eased, with input and output price inflation at nine-month lows. FTSE 100 +0.544% to 9350.43, GBPUSD +0.09% to 1.3458, 10y Gilt -0.1bp to 4.699%.

U.K. house prices rose 2.2% y/y in September, broadly unchanged from August’s 2.1%, with the monthly index up 0.5% m/m and the average price at £271,995. Northern Ireland was the strongest performer, recording 9.6% annual growth, while the North of England followed at 5.1%. In contrast, the Outer South East was the weakest region with growth of just 0.3%. England overall saw 1.6% growth, with southern regions averaging only 0.7%. By property type, semi-detached homes led with a 3.4% annual rise, while prices of flats fell 0.3%. Quarterly data showed the average U.K. house price at £272,819, up 2.3% y/y, with London the most expensive region and the North the least expensive.

Sweden’s manufacturing PMI rose for the third consecutive month in September to 55.6 from 55.3 in August. This marks its highest level since spring 2022 and is above the historical average of 54.3. The strongest positive contribution came from the employment sub-index, followed by new orders and inventories, while production and delivery times weighed negatively. The supplier price index increased slightly to 51.0 from 50.9, the highest in six months but well below its long-term average of 57.6, reflecting subdued price pressure driven by a stronger krona and moderate commodity price gains. The September survey, conducted from September 10-25, confirmed solid momentum in industry despite external risks. OMX +0.406% to 2662.799, EURSEK +0.059% to 11.0568, 10y Swedish GB +0.2bp to 2.705%.

Norway’s manufacturing PMI was broadly stable in September at 49.9, up slightly from 49.6 in August, pointing to near-flat industrial activity. The employment index rebounded strongly by 4.5 points to 47.3 after sharp declines in prior months, helping to lift the weighted average of production, orders and jobs to 49.8. The production index edged up to 52.2, while new orders fell to 49.5, with both domestic and export orders below 50. Supplier delivery times shortened markedly, with the index down to 49.1, a sign of weaker demand. Inventories of purchased goods eased to 48.2. Input price pressures moderated, though the index level of 59.6 still indicated rising costs. OSE -0.79% to 1644.57, EURNOK +0.104% to 11.7334, 10y NGB -1.4bp to 4.065%.

Switzerland’s manufacturing PMI fell sharply in September to 46.3 from 49.0 in August, well below expectations and marking continued contraction since January 2023. Export-oriented firms reported steep declines in order backlogs, which dropped 4.7 points to 40.5, alongside further inventory reductions in both purchases and sales, while pressure on employment intensified. The downturn was linked to rising protectionism, with 47% of companies reporting increased trade barriers in the past year, a record high, after the U.S. imposed a 39% tariff on Swiss goods. By contrast, the services PMI rebounded strongly to 51.3 from 43.9 in August, as new orders rose 11.3 points to 54.1, though the employment sub-index remained in contraction. Swiss retail trade turnover fell in August, with sales adjusted for sales days and holidays down 0.8% y/y in nominal terms and 0.2% y/y in real terms, reflecting the impact of inflation. Separately, service sector turnover adjusted for working days declined 2.3% y/y in July, underscoring continued weakness in domestic demand across both retail and services. SMI +0.855% to 12109.42, EURCHF -0.035% to 0.93418, 10y Swiss GB +3.6bp to 0.221%.

Poland’s September manufacturing PMI rose to 48.0 from 46.6 in August, remaining below the 50.0 threshold but signaling a slower pace of contraction. Output and new orders declined for a fifth and sixth consecutive month, respectively, though both eased to their gentlest falls in several months. Export orders also fell, but at the slowest rate in four months, with some recovery noted from European markets. Employment decreased marginally, while backlogs of work rose for only the second time in over three years, pointing to capacity pressures. Input prices fell at the fastest pace since January, and output charges were reduced fractionally. Business confidence stayed positive, supported by expectations of recovery, new markets and NRP funds. WIG -0.151% to 106363.9, EURPLN -0.015% to 4.2662, 10y PGB -5.4bp to 5.47%.

Hungary’s seasonally adjusted manufacturing PMI rose to 51.5 in September from 49.1 in August, reported Halpim, moving back above the 50 threshold to signal expansion. New orders increased by 5.2 points and returned to growth, while the production volume index rose 1.8 points, also indicating expansion. The index of purchased inventories climbed 3.5 points into expansionary territory, but the employment index slipped 0.7 points and is below 50, signaling contraction. Delivery times worsened, rising 5.1 points despite staying below the neutral mark, suggesting longer lead times. Overall, the data point to a modest recovery in Hungary’s manufacturing sector. Budapest SI -0.389% to 98871.6, EURHUF -0.003% to 389.99, 10y HGB -2bp to 6.8%.

Czechia’s manufacturing PMI slipped to 49.2 in September from 49.4 in August, signaling a third consecutive month of contraction and the sharpest deterioration since May. New orders fell for the first time in four months, driven by weaker domestic and export demand, particularly in Europe. Output declined modestly for a second month, while employment and input buying also fell, though job cuts slowed as backlogs rose at the fastest pace since early 2022. Input costs increased at the slowest rate in 2025, easing pressure on margins, while selling prices dropped again amid strong competition. Business confidence strengthened to a three-month high, supported by expectations of stronger demand and product investment. Prague SE -0.265% to 2330.42, EURCZK -0.017% to 24.319, 10y CZGB -2.5bp to 4.556%.

Türkiye’s September manufacturing PMI fell to 46.7 from 47.3 in August, marking its 18th consecutive month below the 50.0 threshold and indicating further deterioration in business conditions. Firms reported sustained declines in new orders and exports, which drove a pronounced reduction in production and led to the largest fall in outstanding business in almost a year. Employment and input purchases were scaled back, with companies relying more on existing inventories. Post-production stocks rose for the first time in three months. Currency weakness drove input cost inflation to a three-month high, while selling prices rose at the fastest pace since April, though overall price pressures remained below historical averages. BI 100 -0.326% to 11012.12, USDTRY +0.014% to 41.5939, 10y TGB -29bp to 31.39%.

South Africa’s manufacturing sentiment strengthened in September as Absa’s PMI rose to 52.2 from 49.5 in August, returning to expansionary territory and marking the highest level in more than three years. Business activity surged 12.1 points to 57.9, its strongest figure since October 2024, while new sales orders jumped 8.7 points to 56.1. The rebound was supported by domestic demand, aided by 125bp of interest rate cuts since September 2024 and early access to retirement savings, which boosted consumer spending on vehicles and retail. Despite improvements in production and sales, the employment outlook remained weak, with the future business conditions index slipping to 49.2, its lowest level since late 2022. JSE TOP40 +0.657% to 100951.4, USDZAR -0.134% to 17.2473, 10y SAGB +0.8bp to 9.18%.

Australia’s September final PMI manufacturing came in at 51.4 (flash 51.6) vs. 53.0 in August. Production growth slowed amid a fresh decline in new orders (including exports). Optimism among goods producers also eased. Nevertheless, companies hired additional staff to cope with ongoing workloads and to clear their backlogged orders. Purchasing activity and inventory levels also continued to expand. On the price front, rates of both input cost and output price inflation rose in September. ASX +0.559% to 5061.73, AUDUSD -0.182% to 0.6601, 10y ACGB +6.2bp to 4.359%.

Japan September final PMI came in at 48.5 (flash 48.4), as a deterioration in manufacturing sector conditions across the country quickened in September. Factory output fell at the fastest pace in six months as overall new work decreased more steeply, while companies raised their staffing levels at a much slower pace. At the same time, business confidence regarding the year ahead slipped to the lowest level in five months. While the rate of input cost inflation remained slower than the average for the first half of 2025, selling prices increased at a faster and solid pace. Nikkei -0.833% to 44558.23, USDJPY -0.291% to 147.47, 10y JGB +0.4bp to 1.652%.

India’s September manufacturing PMI fell to 57.7 from 59.3 in August, signaling the slowest expansion since May though still indicating strong growth. New orders, output and input buying eased, while job creation slipped to a one-year low. Firms cited rising competition and higher labor, raw materials and transport costs, leading to the fastest increase in output charges since October 2013. Input price inflation also gathered pace, driven by batteries, cotton, electronic components and steel. Export demand improved, particularly from Asia, Europe, the Americas and the Middle East. Optimism strengthened, supported by GST rate cuts and resilient domestic demand, with business confidence reaching a seven-month high. SENSEX +0.53% to 80693.04, USDINR -0.127% to 88.6763, 10y INGB +1.1bp to 6.588%.

South Korea September PMI surged into expansion territory at 50.4 vs. 48.3 in August. The month saw the first improvement in business conditions in the South Korean manufacturing sector since the start of 2025. Both output and new orders returned to expansion territory, with the former rising at the strongest rate since August 2024. The increase in new business was only fractional, but was supported by a first rise in new export orders since March. In response to improved demand conditions, firms raised purchasing activity and employment, while the level of outstanding business rose for the first time in six months. Manufacturers also cited optimism regarding the year ahead for the second month in a row, though the degree of confidence eased from August’s levels. KOSPI +0.848% to 3453.64, USDKRW +0.05% to 1404.5, 10y KTB +0.4bp to 2.94%.

South Korean exports surged from 1.2% in August to 12.7% y/y in September ($65.95bn), the fastest pace since July 2024 (+13.9% y/y). Imports also rose from -4.1% in August to 8.2% y/y. This resulted in a larger-than-expected trade surplus of $9.558bn, the biggest since September 2018 ($9.617bn). The breakdown shows exports to the U.S. shrinking by -1.4% y/y ($10.27bn), while those to China were up +0.5% y/y ($11.68bn) and exports to Europe surged by +19.3% y/y ($7.16bn). In terms of products, semiconductor exports rose 22% y/y ($16.6bn), while autos were up 16.8% y/y ($6.4bn) and ship exports soared 21.9% y/y ($2.89bn). South Korea and the U.S. also reaffirmed the fundamental principle of avoiding exchange rate manipulation and monitoring the “stability” of the foreign exchange market.

Taiwan’s September PMI dropped to 46.8 from 47.4. Firms observed steeper falls in output and new orders amid reports of muted global demand, linked in turn to the impact of U.S. tariffs and client hesitancy. Reduced production requirements contributed to another marked fall in purchasing activity during September. Manufacturers also lowered their staffing levels on signs of spare capacity and downbeat projections regarding the one-year outlook for output. At the same time, cost pressures intensified, with average input prices rising at the fastest pace in 2025 to date. However, efforts to win new business led firms to leave their selling prices broadly unchanged for the second month in a row. TAIEX +0.629% to 25982.91, USDTWD -0.056% to 30.442, 10y TGB +0.6bp to 1.374%.

Thailand September PMI surged to 54.6 from 52.7. A sharp rise in new orders spurred faster production growth, though new export orders continued to fall. In turn, manufacturers raised their purchasing levels and workforce capacity. Meanwhile, backlogs continued to accumulate, and existing inventory was depleted to fulfill demand. Turning to prices, average operating expenses continued to fall, which enabled goods selling prices to be lowered for the first time since March. TAIEX +0.629% to 25982.91, USDTWD +0.02% to 30.465, 10y TGB -0.1bp to 1.34%.

Thailand’s manufacturing PMI rose to 54.6 in September from 52.7 in August, signaling the strongest improvement in sector conditions since May 2023. New orders increased at the sharpest pace in 28 months, driving faster production growth, while employment rose at the strongest rate in a year and purchasing activity expanded to a one-year high. Backlogs accumulated at the fastest pace in nearly a decade as domestic demand strengthened, though export orders fell for a consecutive second month, at the steepest rate since March. Input costs declined for a third month, allowing firms to cut selling prices for the first time since March. Business confidence rose to a two-and-a-half-year high. SET +0.387% to 1279.1, USDTHB +0.099% to 32.435, 10y TGN -1.1bp to 1.419%.

Thailand’s Business Sentiment Index (BSI) weakened q/q in Q3 2025, falling below 50 as confidence in export-oriented manufacturing sectors slumped, notably in food and beverage industries that were hit by reciprocal tariffs and soft demand. Electronics was the only segment to improve, supported by global tech demand. The non-manufacturing index edged higher, led by hotels and restaurants benefiting from the government’s “Half-Half” tourism co-payment scheme, though it remained below 50 due to sluggish foreign arrivals. Construction sentiment also improved on government projects. Looking ahead, the 3-month expected BSI rose slightly, lifted by tourism and retail trade, while manufacturing expectations dipped further. Economic uncertainty, currency strength and weak domestic demand remained key business concerns, although expected inflation for the next 12 months held steady at 2.2%.

Indonesia’s manufacturing sector experienced a sustained uplift at the end of the third quarter, as September PMI reached 50.4 (August: 51.5). New orders rose for the second successive month in September, though there was a renewed reduction in production volumes following a solid expansion in August. More positively, manufacturers signaled a further uptick in employment levels amid confidence that growth will continue over the coming months. In fact, optimism regarding the year ahead strengthened from the previous survey period and was the highest in four months. JCI +0.013% to 8062.076, USDIDR +0.12% to 16685, 10y IDGB -2bp to 6.347%.

Indonesia’s September headline inflation was 2.65% y/y, with the CPI at 108.74, rising 0.21% m/m and 1.82% YTD. The highest provincial inflation was in Sumatera Utara at 5.32%, while Papua recorded the lowest price growth at 0.99% and Maluku Utara posted deflation of 0.17%. At regency/municipality level, Deli Serdang had the sharpest increase at 6.81%, while Ternate was nearly flat at 0.06% and Halmahera Tengah registered deflation of 1.21%. Inflation was driven by food, beverages and tobacco at 5.01%, health at 2.01% and personal care and other services at 9.59%, while transport and information and communication reported deflation. Core inflation stood at 2.19% y/y, with volatile foods up 6.44% y/y and energy down 0.11% y/y.

Indonesia’s August exports rose 5.78% y/y to $24.96bn, with non-oil and gas shipments up 6.68% to $23.89bn. Oil and gas exports fell 10.88% y/y to $1.07bn, though crude oil rose 21.39% while natural gas declined 15.18%. By sector, manufacturing exports increased 11.68% and agriculture, forestry and fisheries climbed 10.98%, while mining dropped 15.50%. Imports decreased 6.56% y/y to $19.47bn, with non-oil and gas imports down 7.98% to $16.74bn. Intermediate goods imports fell 9.06%, while imports of capital goods rose 2.45%. The August trade balance recorded a surplus of $5.49bn, supported by a $7.15bn non-oil and gas surplus, which made up for a $1.66bn oil and gas deficit.

Malaysia September PMI eased slightly to 49.8 (August: 49.9). The country’s manufacturing sector conditions were broadly unchanged at the end of the third quarter, as firms recorded a sustained rise in new orders but a renewed slowdown in production. While the rate of growth in sales was only marginal, September marked the first time since June 2024 that new orders have risen in consecutive months. Firms were also buoyed by a softer rise in operating expenses, with input price inflation at a five-month low on reduced raw material price pressure. Businesses were also increasingly confident regarding the outlook for the year ahead, with business sentiment strengthening from that seen in August. KLCI +0.572% to 1621.1, USDMYR +0.067% to 4.21, 10y MGB -0.9bp to 3.454%.

Philippines September PMI slipped into contraction for the first time since March 2025, at 49.9, as goods producers saw fresh contractions in output and new orders. Sales decreased for the first time since March amid reports of lower customer numbers. Despite this, manufacturers continued to increase their purchasing activity and add to input stocks, although finished goods inventories fell as companies worked on backlogs. Cost burdens eased versus August, but the pace of increase was among the highest recorded in 2025 so far, and compares with a muted rise in factory gate prices. PSEi +1.209% to 6025.42, USDPHP +0.043% to 58.23, 10y PHGB +2.1bp to 5.956%.