October saw risk assets climb as a tentative US–China trade truce and moderating inflation bolstered optimism. The Fed’s measured tone and resilient earnings supported equities, though valuations remain stretched.

The European Central Bank maintained rates at 2% while the US Federal Reserve cut by 25 bps, marking a growing policy divergence. With Eurozone inflation near target and resilient US growth, investors face an increasingly selective phase in global monetary policy.

The looming U.S. government shutdown on 1 October poses both political and market risks. While previous shutdowns have had limited direct economic impact, this time could be different. The suspension of key economic data, reduced regulatory oversight, and a freeze in IPO activity all inject uncertainty into financial markets. For investors, the real challenge lies less in short-term growth effects and more in navigating heightened volatility and sentiment risks as the Federal

Markets had their eyes firmly on last week’s U.S. inflation report for clues ahead of the Federal Reserve’s September meeting. While headline CPI ticked higher to 2.9% in August, much of the increase came from energy prices, with core inflation holding steady at 3.1%. At the same time, producer price inflation cooled sharply, suggesting that businesses are absorbing tariff-related costs rather than passing them on to consumers. But the real story lies in the labour market.

For the first time since 2021, the number of unemployed Americans now exceeds the total number of job openings — a clear signal that the labour market is losing steam.