EconoTicker

The S&P Global Services PMI came in at 54.8 in October, slightly below expectations of 55.2 but higher than 54.2 in September, indicating continued solid expansion in the U.S. services sector. The Composite PMI stood at 54.6 versus 54.8 expected and 53.9 previously, reflecting broad-based business strength and stable demand conditions. Companies reported resilient client activity, though input cost pressures persisted.

Market impact: Neutral for USD; steady services growth supports the soft-landing outlook but does not materially shift Fed policy expectations.

U.S. firms announced 153,074 job cuts in October, a sharp increase from 54,064 in September, according to Challenger, Gray & Christmas data. The surge marks the highest monthly total since early 2023, driven by layoffs in technology, finance, and manufacturing sectors. The rise in planned job reductions suggests that companies are turning more cautious amid slowing growth and persistent cost pressures.

Market impact: Mildly negative for USD; the sharp increase in layoffs reinforces signs of a cooling labor market, potentially easing Fed tightening expectations.

The U.S. Treasury’s 4-week bill auction cleared at a yield of 3.875%, down from 3.910%, while the 8-week bill settled at 3.815%, lower than 3.890% in the previous auction. The decline in short-term yields reflects stronger investor demand for safe assets amid cautious market sentiment and expectations of stable Federal Reserve policy in the near term.

Market impact: Mildly positive for USD bonds; softer yields indicate healthy demand for short-term Treasuries but limited directional change for the dollar.

The Atlanta Fed’s GDPNow model maintained its forecast for fourth-quarter U.S. GDP growth at 4.0%, unchanged from the prior estimate. The projection suggests continued solid economic momentum, supported by resilient consumer spending, stable job growth, and firm business investment. While growth remains above the long-term trend, analysts expect moderation in the coming months as tighter credit conditions and cooling inflation weigh on activity.

Market impact: Neutral for USD; steady GDPNow outlook reinforces expectations of a soft landing without altering the Federal Reserve’s near-term policy view.

The Federal Reserve’s balance sheet decreased to $6.573 trillion from $6.587 trillion in the latest week, reflecting continued quantitative tightening through maturing securities roll-off. Meanwhile, reserve balances with Federal Reserve Banks increased modestly to $2.852 trillion from $2.828 trillion, indicating stable liquidity in the banking system. The data suggest the Fed remains on track with balance sheet normalization while maintaining ample reserves for financial stability.

Market impact: Neutral for USD; steady balance sheet reduction and stable reserves align with the Fed’s ongoing tightening framework.

The University of Michigan Consumer Sentiment Index fell to 50.3 in November, below expectations of 53.0, as households reported weaker confidence in current conditions and the outlook. Current conditions dropped to 52.3, and consumer expectations slipped to 49.0. Meanwhile, 1-year inflation expectations rose slightly to 4.7%, while 5-year expectations eased to 3.6%, reflecting mixed inflation perceptions amid persistent cost pressures.

Market impact: Mildly negative for USD; softer sentiment and higher near-term inflation expectations may temper optimism about consumer-driven growth.