EU mid-market update: Nonfarm payrolls will NOT be released due to US govt shutdown; French PM kicks off talks with opposition on compromise proposals.

1 Nonfarm Payrolls Report Cancelled
2 Asia
3 Europe
4 Equities
5 Speakers
6 Currencies/fixed income
7 Economic data
8 Fixed income issuance
9 Looking ahead

Nonfarm Payrolls Report Cancelled

Quiet EU and Asia session to close the week, allowing modest gains across major equity indices.
With market expectation that US Non-farm payrolls will be delayed due to ongoing US govt shutdown, focus shifts to next week. On lookout for end of shutdown and postponed data being released, as well as FOMC minutes on Wed.
French PM Lecornu said he will forgo using Article 49.3 to pass bills, a move Marine Le Pen called respectful of the Constitution, while he continues consultations to form a government and Republicans’ participation remains uncertain. On the left, PS leader Olivier Faure seeks a December parliamentary vote on pensions and calls it a change in method.
The Socialists, who are meeting with PM Lecornu today, continue to call for a suspension of the French pension reform or the introduction of the tax on very high net worth individuals. According to FT study, French pensioners now have higher incomes than working-age adults.
Q3 earnings season will start at a slow pace with Pepsi and Delta Airlines on Thurs.
UK OBR set to deliver first pre-measures forecast to Chancellor Reeves later today ahead of Autumn budget on Nov 26th; Usually happens during London business hours, and it is not officially published; By design, the pre-measures results go to the Chancellor about six weeks before the statement, then iterate up to a final pre-measures round 2 to 3 weeks before the event, after which the OBR publishes only the post-measures forecast on the day.
OPEC+ meeting is scheduled for this Sun, Oct 5th. Expectations for production hike somewhere in range of ~140K bpd. Reports earlier in week pointed at 500K bpd but this was dismissed by OPEC.
Asia closed higher with KOSPI outperforming +2.7%. EU indices +0.1-0.8%. US futures +0.2-0.3%. Gold +0.1%, DXY +0.1%; Commodity: Brent +1.2%, WTI +1.3%; Crypto: BTC +1.0%, ETH +1.7%.

Asia

Japan Aug Jobless Rate: 2.6% v 2.4%e (1-year high).
Japan Sept Final PMI Services: 53.3 v 53.0 prelim (confirmed 11th month of expansion)- Australia Sept Final PMI Services: 52.4 v 52.0 prelim (confirmed 20th month of

expansion).

BOJ Gov Ueda noted that it must maintain accommodative monetary environment, support economy. Tariff policy created global uncertainty, 15% tariff rate would weigh on Japan’s economy. Reiterated stance that was prepared to hike rates if economic outlook was met.

Europe

Italy govt cut the 2025 GDP growth forecast from 0.6% to 0.5% and cut 2026 GDP growth forecast from 0.8% to 0.7%. Govt lowered its 2025 budget deficit target from 3.3% to 3.0% citing stronger than expected tax revenues.
OBR forecasts on Friday expected to cut UK productivity outlook, creating a potential £30B shortfall ahead of 26th Nov Budget.

Speakers/fixed income/FX/commodities/erratum
Equities
Indices [Stoxx600 +0.38% at 569.78, FTSE +0.50% at 9,475.18, DAX +0.04% at 24,448.45, CAC-40 +0.19% at 8,072.04, IBEX-35 +0.83% at 15,634.84, FTSE MIB +0.40% at 43,251.00, SMI +0.67% at 12,500.43, S&P 500 Futures +0.26%].

Market focal points/key themes: European indices open higher across the board and remained in the green through the early part of the session; US shutdown seen positive for European stocks amid cross-Atlantic flows; among sectors leading the way higher are materials and financials; lagging sectors include technology and communication services; no major earnings expected in the upcoming US session.

Equities

Consumer discretionary: Barry Callebaut [BARN.CH] +2.5% (shareholder explored taking company private – press), J.D. Wetherspoon [JDW.UK] -4.0% (earnings).
Financials: Raiffeisen [RBI.AT] +6.5% (EU plans to hand assets linked to Russian tycoon Deripaska to Raiffeisen), ABN Amro [ABN.NL] +2.5% (analyst upgrade).
Technology: ASML [ASML.NL] -1.5% (US Commerce Dept expands export restrictions on Applied Materials).

Speakers

French PM Lecornu noted of a lot of problems to discuss and cautioned that it was possible coalition talks not successful. Would not use constitutional measure to force budget.
Czech Central Bank (CNB) Sept Minutes noted that stable rates and strong FX were needed. Deliberation on raising interest rates was deemed premature. Rate move could be in either direction.

Currencies/fixed income

USD locked in tight ranges with key US govt economic releases being delayed due tot the ongoing govt shutdown.
EUR/USD edged higher in a quiet session with focus on French budget matters. Euro soothed after France PM Lecornu noted he would not use constitutional measure to force budget. Pair at 1.1740 by mid-session.
GBP/USD drifted higher ahead of an internal OBR for the govt which was expected to mark down UK productivity by 0.1-0.2 pp, implying a £9-18B budget hit. Pair at 1.3455 by mid-day.
USD/JPY higher after BOJ Gov Ueda kept markets guessing on the timing of the next rate hike. Focus on the Japan ruling LDP’s party leadership race with voting taking place on Sat (Oct 4th). Koizumi said to hold a slight lead in recent press polling, but over the past few weeks has been a seesaw contest with fellow-frontrunner Takaichi. Pair at 147.40 as the NY morning approached.
10-year German Bund yield at 2.71% and 10-year Gilt yield at 4.70% 10-year Treasury yield: 4.10%.

Economic data

(RU) Russia Sept Services PMI: 47.0 v 50.0 prior; Composite PMI: 46.6 v 49.1 prior.
(NO) Norway Sept Unemployment Rate: 2.1% v 2.2% prior; Unemployment Rate (seasonally adj): 2.1% v 2.1%e.
(SE) Sweden Sept PMI Services: 57.7 v 53.8 prior; PMI Composite: 57.1 v 54.2 prior.
(FR) France Aug Industrial Production M/M: -0.7% v +0.3%e; Y/Y: 0.4% v 0.6%e.
(FR) France Aug Manufacturing Production M/M: -0.7% v +0.3%e; Y/Y: 0.5% v 2.2% prior.
(TR) Turkey Sept CPI M/M: 3.2% v 2.6%e; Y/Y: 33.3% v 32.5%e; CPI Core Index Y/Y: 32.5% v 32.1%e.
(TR) Turkey Sept PPI M/M: 2.5% v 2.5% prior; Y/Y: 26.6% v 25.2% prior.
(ZA) South Africa Sept PMI (whole economy): 50.2 v 50.1 prior.
(ES) Spain Sept Services PMI: 54.3 v 53.3e (25th month of expansion)h; Composite PMI: 53.8 v 53.3e.
(TH) Thailand May Foreign Reserves w/e Sept 26th: $271.9B v $272.3B prior.
(IT) Italy Sept Services PMI: 52.5 v 51.5e (10th month of expansion); Composite PMI: 51.7 v 51.6e.
(FR) France Sept Final Services PMI: 48.5 v 48.9 prelim (confirmed 14th month of contraction); Composite PMI: 48.1 v 48.4 prelim.
(DE) Germany Sept Final Services PMI: 51.5 v 52.5 prelim (confirmed move back into expansion); Composite PMI: 52.1 v 52.4 prelim.
(EU) Euro Zone Sept Final Services PMI: 51.3 v 51.4 prelim (confirmed 4th month of expansion); Composite PMI: 51.2 v 51.2 prelim.
(IT) Italy Aug Retail Sales M/M: -0.1% v 0.0% prior; Y/Y: 0.5% v 1.8% prior.
(RU) Russia Narrow Money Supply w/e Sept 26th (RUB): 18.88T v 18.95T prior.
(UN) Sept FAO World Food Price Index: 128.8 v 129.7 prior.
(UK) Sept Final Services PMI: 50.8 v 51.9 prelim (confirmed 5th month of expansion); Composite PMI: 50.1 v 51.0 prelim.
(UK) Sept Official Reserves Changes: $4.6B v $3.1B prior.
(EU) Euro Zone Aug PPI M/MM: % v -0.1%e; Y/Y: % v -0.4%e.
(IT) Italy Q2 YTD Budget Deficit to GDP: % v 8.5% prior.

Fixed income issuance

(IN) India sold INR320B vs. INR320B indicated in new 2035 bonds; Avg Yield: 6.4800%.

Looking ahead

05:25 (EU) Daily ECB Liquidity Stats.
05:30 (NL) ECB’s Sleijpen (Netherlands).
05:30 (ZA) South Africa to sell combined ZAR1.0B in I/L 2031, 2038 and 2058 Bonds.
05:40 (EU) ECB chief Lagarde.
06:00 (IE) Ireland Sept Live Register Monthly Change: No est v -0.5K prior; Live Register Level: No est v 168.6K prior.
06:00 (IT) Italy Stats Agency (Istat) GDP Quarterly revisions.
06:00 (UK) DMO to sell £6.5B in 1-month, 3-month and 6-month bills (£1.0B, £2.5B and £3.0B respectively).
06:05 (US) Fed’s Williams.
06:30 (FR) ECB’s Villeroy (France).
07:30 (IN) India Forex Reserve w/e Sept 26th: No est v $702.6B prior.
07:30 (IN) India announces upcoming bill issuance (held on Wed).
08:00 (BR) Brazil Aug Industrial Production M/M: +0.4%e v -0.2% prior; Y/Y: -1.1%e v +0.2% prior.
08:00 (MX) Mexico July Gross Fixed Investment M/M: +1.0%e v -1.4% prior; Y/Y: -7.3%e v -6.4% prior; Private Consumption Y/Y: No est v 1.6% prior.
08:00 (MX) Mexico Aug Leading Indicators M/M: No est v 0.19 prior.
08:00 (UK) Daily Baltic Dry Bulk Index.
08:30 (US) Sept Change in Nonfarm Payrolls: +52Ke v +22K prior; Private Payrolls: +65Ke v +38K prior; Manufacturing Payrolls: +9.0Ke v -12K prior.
08:30 (US) Sept Unemployment Rate: 4.3%e v 4.3% prior; Underemployment Rate: No est v 8.1% prior; Participation Rate: No est v 62.3% prior.
08:30 (US) Sept Average Hourly Earnings M/M: 0.2%e v 0.3% prior; Y/Y: 3.7%e v 3.7% prior; Average Weekly Hours All Employees: 34.2e v 34.2 prior.
09:00 (BR) Brazil Sept Services PMI: No est v 49.3 prior; Composite PMI: No est v 48.8 prior.
09:20 (UK) BOE Gov Bailey.
09:30 (CA) Canada Sept Services PMI: No est v 48.6 prior; Composite PMI: No est v 48.4 prior.
09:45 (US) Sept Final S&P Services PMI: 53.9e v 53.9 prelim; Composite PMI: No est v 53.6 prelim.
09:50 (DE) ECB’s Schnabel (Germany).
10:00 (US) Sept ISM Services Index: 51.7e v 52.0 prior.
11:00 (EU) Potential sovereign ratings after European close (Moody’s On European Union; Fitch on Slovakia).
13:40 (US) Fed’s Jeffereson.
18:00 (CO) Colombia Central Bank Sept Minutes.

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Nonfarm Payrolls Report Cancelled Amid Ongoing U.S. Govt Shutdown