The infoshot to help kick-start your week
Hawkish comments and mixed signals send US markets down
On Tuesday, Fed Chair, Jerome Powell, reiterated the need for the central bank to balance the competing risks of high inflation and a declining job market when making interest rate decisions. Powell called it “a challenging situation” and said there was no “risk-free path” for the Fed to follow.
His comments set off a slow week in the US equity markets. Better than expected GDP data on Thursday wasn’t enough to avert a weekly decline. According to the Commerce Department’s Bureau of Economic Analysis, GDP increased by 3.8% in the quarter, the fastest pace since Q3 2023. The US economy’s resilience was further underlined by other data showing consumer spending had increased by slightly more than expected in August, and that business investment is up thanks to the AI spending boom. The combination of positive data points sent bond yields up due to it effectively suggesting further rate cuts might be unwarranted at present.
Trump went to the UN last week and delivered a rambling speech following a teleprompter breakdown. Behind the scenes, US delegates clashed with Heads of State and corporate leaders pushing for an urgent collaboration on AI. US delegates spent the week pushing back on the idea of international AI governance, with the US Director of the Office of Science and Technology Policy, Michael Kratsios declaring, “We totally reject all efforts by international bodies to assert centralised control and global governance of AI.”
Trump is back in Washington this week meeting congressional leaders in an attempt to avoid a government shutdown over Republican cuts to healthcare spending.
Eurozone business activity rises but falls sharply in UK
The latest eurozone Purchasing Manger’s Index (PMI) showed that business activity rose to its highest level since May 2024 despite France’s economic woes and Germany’s manufacturing sector slowing. Chief Economist at Hamburg Commercial Bank (HCOB), Cyrus de la Rubia, said “the eurozone is still on a growth path” but added the outlook for manufacturing is “a bit cloudy” following a fall in new orders in France and Germany.
Here in the UK, our PMI survey showed business activity slowed sharply in September to a four-month low. Manufacturing output had its sharpest decline since March. The latest survey also found about 50,000 private sector jobs were cut between June and September. This weekend, analysis by recruitment data and job search engine provider, Adzuna, showed a 35% fall in advertised graduate jobs this year as traditional graduate employers pause hiring and introduce AI into the workplace. Advertised vacancies overall fell by 8% to 14,162 in August. Andrew Hunted, Job search engine Adzuna’s co-founder, said hiring is “increasingly being shaped by a mix of sector-specific swings and the growing role of AI within the UK labour market”.
On the subject of work, UK Prime Minister, Kier Starmer announced plans to introduce digital ID cards last week. The government hopes the policy will help address illegal working and ease the data burden across government departments. It’s expected to be limited to adults seeking work but think tanks like Tony’s Blair Institute for Global Change, have previously promoted the idea of using a “super-digital ID card” to access all public services.
Coming Up:
- UK GDP Q2, Tuesday 30 September at 07:00am
- US initial jobless claims, Thursday 2 October 2025 at 13:30pm
- US unemployment rate, Friday 3 October 2025 at 13:30pm
Notice:
For regulated financial advisers and investment professionals only, Copia does not provide financial advice, and the contents of this document should not be taken as such. The performance of each asset class is represented by certain Exchange Traded Funds available to UK investors and expressed in GBP terms selected by Copia Capital Management to represent that asset class, as reported at previous Thursday 4:30pm UK close. Reference to a particular asset class does not represent a recommendation to seek exposure to that asset class. This information is included for comparison purposes for the period stated but is not an indicator of potential maximum loss for other periods or in the future.
