According to the Bureau of Economic Analysis’ advance GDP estimate, released on October 29, the US economy expanded at an annualised rate of 3.4% in the third quarter, up from 2.2% in the second quarter. Growth reflected increases in investment, consumer spending and government spending, partly offset by lower exports. Separately, September’s annual personal consumption expenditures (PCE) inflation accelerated from 3.4% to 3.6%, while core inflation rose from 3.0% to 3.1%, remaining above the Federal Reserve’s 2.0% target. Labour-market data also indicated resilience: initial unemployment claims declined to 194.0K from an upwardly revised 195.0K, while the four-week average fell from a revised 198.00K to 196.75K. Continuing claims decreased from a revised 1.722 million to 1.701 million. These figures keep further monetary tightening in focus, although they do not predetermine the Fed’s December decision.
Eurozone
The euro strengthened against the US dollar but weakened against the yen and sterling in the supplied session snapshot.
On October 29, the European Central Bank left its main refinancing rate at 2.65%, its deposit facility rate at 2.50% and its marginal lending facility rate at 2.90%. Policymakers warned that higher energy prices posed upside risks to inflation and downside risks to growth, while maintaining a data-dependent approach without committing to a particular rate path. Separately, President Christine Lagarde announced that she would step down on February 7, 2027. Eurostat’s preliminary estimate, released on October 30, showed that eurozone GDP increased by 0.4% quarter-on-quarter and 1.3% year-on-year in the third quarter. The corresponding figures for the wider European Union were 0.5% and 1.5%. Growth remained positive, although energy costs and tighter financing conditions continued to cloud the outlook. The policy backdrop was also discussed in our earlier EUR/USD analysis.
United Kingdom
Sterling strengthened against the US dollar and the euro, while showing mixed performance against the yen.
Nationwide’s October house price report, published on October 30, showed that UK prices were unchanged month-on-month after a revised 0.3% decline in September. Annual growth slowed from 0.8% to 0.5%, its weakest pace since January 2024. Nationwide highlighted an uncertain economic backdrop, weak buyer enquiries and softer consumer confidence. Middle East tensions and higher energy prices were adding to inflation concerns and expectations of Bank of England rate increases, maintaining upward pressure on the market rates used to price mortgages. The report pointed to further near-term softness rather than a certain decline in house prices.
Japan
The yen strengthened against the US dollar and the euro, while showing mixed performance against sterling.
At its October 30 meeting, the Bank of Japan maintained its short-term policy rate at around 1.25% by an 8–1 vote. Board member Hajime Takata proposed an increase to around 1.50%. The Bank assessed underlying inflation as broadly consistent with its 2.0% price stability target and indicated that further rate increases would depend on economic activity, prices and financial conditions. For fiscal 2027, the median forecast for CPI excluding fresh food increased from 2.4% to 2.6%, while the forecast excluding fresh food and energy rose from 2.6% to 2.7%. Separately, Tokyo’s October headline CPI increased by 2.8% year-on-year, compared with 2.7% in September, while inflation excluding fresh food eased from 2.7% to 2.6%. The mixed readings leave the timing of further tightening uncertain.
Australia
The Australian dollar weakened against the yen and sterling, while showing mixed performance against the euro and the US dollar.
Producer price data released on October 30 showed that final-demand prices, excluding exports, increased by 1.1% in the third quarter. This represented slower quarterly growth than the previous period’s 1.3% increase, while annual growth remained at 3.6%. Consumer inflation also remained elevated: September’s headline CPI rose by 4.3% year-on-year, while trimmed mean inflation stood at 3.6%, both above the Reserve Bank of Australia’s 2.0–3.0% target range. These figures reinforced expectations of further tightening ahead of the November 3 policy decision, although the outcome remained uncertain.
Oil
Oil prices attempted to advance as traders assessed persistent supply risks.
Geopolitical tensions in the Persian Gulf remained central to the outlook. Iran’s Revolutionary Guard claimed that four tankers had struck mines in the Strait of Hormuz after using unauthorised routes, but the Associated Press said it could not independently verify the account. Reports of possible renewed US military action after the November 3 midterm elections also kept supply concerns in focus, although an attack had not been confirmed. Meanwhile, a Reuters poll of economists and analysts raised the forecast for average Brent crude prices in 2026 to $92.88 per barrel from $89.05 in the previous survey. The corresponding WTI forecast increased to $86.60 from $83.90.
