The United States saw its September PMI rise to a record high, indicating that a rate‑hike scenario is becoming realistic. The uptick in both services and manufacturing indices points to higher inflationary pressure and the strong stance of Federal Reserve Chairman Jerome Bailey, which has set off a risk‑off drift across global financial markets.
The U.S. composite PMI for September climbed from 56.0 last month to 58.4, marking the highest reading since July 2021. Service activity rose to 58.7—its highest level since October 2021—and manufacturing reached 57.0, its best level since May 2022. The simultaneous rise in new orders and production costs suggests that firms may be able to raise prices.
European and U.S. markets also moved sharply on the back of rising rates and Middle‑East tensions. The Eurozone PMI for September rose from 52.0 last month to 53.1, with services hitting a peak of 53.0 while manufacturing increased to 52.7. In addition, major economic events are scheduled in both regions, clarifying the trajectory of their respective economies.
Interest‑rate and bond markets also continued to shift. The U.S. 10‑year Treasury yield crossed 5 % for the first time since 2006, hitting a peak since then. Germany’s 10‑year yield reached 3.56%, reflecting the rise in Eurozone PMI activity. Korean CDS spreads remained unchanged at 23 bp, while VIX climbed to 15.18, signalling heightened risk sentiment.
Overall, global economic‑growth forecasts have been nudged up from 2.8% to 2.9% by OECD, though the outlook for 2027 has softened slightly. The shock of Middle‑East energy supply disruptions and ensuing higher oil prices are expected to be reflected in both short‑term inflationary pressures and longer‑term growth prospects, suggesting a mixed impact on future expansion.