Key Takeaways
- Eurozone annual inflation for September was confirmed at 2.2%, aligning with estimates, while the core CPI slightly exceeded expectations at 2.4% year-on-year, indicating persistent underlying price pressures.
- China's Foreign Minister expressed a willingness to resume dialogue and exchanges with Canada at all levels, aiming to resolve mutual concerns, as the People's Bank of China (PBOC) announced plans to attract more foreign institutions to invest in its domestic market.
- HSBC upgraded Freeport-McMoRan (FCX) to "Buy" citing higher copper prices, while UBS upgraded Deere (DE) to "Buy" from "Neutral" on expectations of an earnings recovery.
- Shipments of foreign-branded phones, including Apple's (AAPL) iPhone, in China surged 15.6% year-on-year to 2.748 million units in July, contributing to an overall 16.1% increase in China's smartphone shipments to 28.1 million handsets.
Global financial markets are digesting a flurry of economic data and geopolitical developments, with Eurozone inflation figures, China's diplomatic and economic policy statements, and significant analyst upgrades driving market sentiment.
Eurozone Inflation Holds Steady, Core CPI Edges Higher
The Eurozone's final Consumer Price Index (CPI) for September registered an annual rate of 2.2%, matching both preliminary estimates and the previous month's figure. This stability in headline inflation offers the European Central Bank (ECB) few immediate reasons to further ease monetary policy. On a month-over-month basis, CPI rose by 0.1%, consistent with expectations and the prior month's increase.
However, the core CPI, which excludes volatile items like energy and food, showed a slight uptick, rising to 2.4% year-on-year, exceeding the estimated and previous figure of 2.3%. This suggests that underlying price pressures remain somewhat sticky across the region, with services inflation notably contributing to the rise.
China Signals Openness Amidst Geopolitical Tensions
China's Foreign Minister has indicated the nation's readiness to engage with Canada to restart dialogue and exchanges across all levels. The aim is to facilitate the resolution of legitimate concerns for both countries, marking a potential diplomatic reset. This comes as Canada's Foreign Minister Anita Anand is visiting China, with discussions expected on bilateral relations and economic matters.
Concurrently, the People's Bank of China (PBOC) announced its intention to attract more foreign institutions to invest in the domestic market in an orderly manner. This move underscores China's efforts to expand financial opening-up and strengthen its position as a global investment destination.
Despite these overtures, geopolitical tensions persist. China has reportedly issued a warning to UK Labour leader Keir Starmer, indicating "consequences" if he does not approve the construction of its new embassy in London. The UK government has faced pressure regarding the embassy plans, with concerns raised about potential security implications.
Analyst Upgrades Boost Key Industrials and Materials
In a positive sign for specific sectors, HSBC upgraded mining giant Freeport-McMoRan (FCX) to a "Buy" rating, citing expectations of higher copper prices. Copper prices have been influenced by fears of shortages and increased premiums for physical delivery.
Similarly, UBS upgraded agricultural and construction equipment manufacturer Deere (DE) from "Neutral" to "Buy". This upgrade is based on expectations that fiscal 2026 will mark the end of Deere's earnings downturn, with a recovery anticipated in fiscal 2027.
China's Smartphone Market Sees Strong Growth
Data from the China Academy of Information and Communications Technology (CAICT) reveals a robust performance in China's smartphone market. Shipments of foreign-branded phones, including Apple's (AAPL) iPhone, experienced a significant 15.6% year-on-year increase, reaching 2.748 million units in July. This contributed to an overall 16.1% year-on-year rise in total smartphone shipments within China, totaling 28.1 million handsets for the month.
Other Noteworthy Developments
In Japan, the Komeito party is reportedly arranging to not vote for the opposition's Prime Minister candidate, a development that could impact the country's political landscape. Meanwhile, cryptocurrency exchange Binance is among several crypto firms reportedly facing money-laundering checks in France, highlighting ongoing regulatory scrutiny in the digital asset space.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.