观点

CHART 1: JCI SELL-OFF EXCEEDS THE COVID-ERA DRAWDOWN Source: Bloomberg, MUFG GMR.

Allen pointed to the latest unemployment rate of 4.7%, asking whether conditions could be loosening - meaning more potential employees are available for employers to hire - more quickly than expected.

China GDP surprised to the upside in Q3 2026, quarterly growth accelerating from 0.9% in Q2 to 1.2% in Q3.

This is likely to come by early-2027 to offset the loss of support from trade, and as downside risks to global growth become more apparent.

We remain comfortable with the view that Chinese GDP growth will hold at or slightly above 4.5% through 2026–2028.

If authorities wait until after net exports’ contribution has faded, even holding annual aggregate growth above 4.0% could become a significant challenge.

For this reason, we expect material stimulus initiatives to be announced in the next 3 to 6 months to reset the property sector and turn the business investment trend.

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The material may contain an ‘investment recommendation’ and/or ‘information recommending or suggesting an investment’, both as defined in Regulation (EU) No 596/2014 (including as applicable in the United Kingdom) (“MAR”).

CommBank's real-time estimate of the neutral rate has increased to about 3.85%, around 0.65 percentage points higher than a year ago, Yeaman said.

If neutral is higher, today's 4.60% cash rate may not be restraining the economy by as much as the headline number suggests.

Yeaman’s outlook came as new CommBank data showed household spending has slowed during 2026.

Senior Economist Ashwin Clarke said spending growth to early October remained below the stronger rates recorded in late 2025 and early 2026.

Storage and removalist spending is running below 2025 levels, with housing turnover now around 20% to 30% lower than a year ago.

Tesla will publish its third-quarter 2026 results after the US market close on Wednesday 21 October 2026, with a webcast at 23:30 CEST.

The strikes follow two simple rules, both based on the priced range above: • Iron condor: sell the strikes nearest the edges of the priced range (335 and 390), and buy protection about half the priced move further out (322.5 and 402.5).

• Long strangle: buy strikes about half the priced move away from the share price (350 and 375).

All examples use indicative Saxo mid prices as of the US close on 15 October 2026 and contracts of 100 shares; actual prices will differ.

A reader who sees the July 2026 fall or the October 2024 rise as the better guide could buy an out-of-the-money call and an out-of-the-money put.

• US industrial production rose 0.7% month on month in September, the most in five months and above the 0.4% forecast, with manufacturing output up 0.3%, mining 0.2% and utilities 3.5%.

Capacity utilisation climbed to 76.9%, the highest since December 2023 and above the 76.5% forecast, though still 2.5 points below its long-run average of 79.4%.

• China’s economy beat expectations in Q3, expanding by 4.5%, while retail sales growth picked up more than expected to 1.1% and industrial production growth accelerated to 5.5% year-on-year in September.

1 Westpac New Zealand Economics Downward revisions to 2027 outlook We have updated our New Zealand economic outlook for the next year, in particular reflecting the latest developments in the energy market and key financial variables (long-term interest rates and the exchange rate).

Having already marked down of our forecast for GDP growth in 2026 to 2.5%yr, last week we reduced our forecast of growth in 2027 by 0.3ppts to 2.7%yr.

House sales fell a further 4% in September – the seventh consecutive month of decline – to be 12% lower than a year earlier.

Meanwhile, inflows of migrants remain at modest levels, totalling around 20,000 in the year to August – about half what might be expected on average over the cycle.

Focus on New Zealand: Downward revisions to 2027 outlook.

(The RBA estimated that around 16% of businesses imposed surcharges.) Inevitably, though, some firms have lifted their prices by more than any reasonable estimate of the merchant service fee that the surcharge was meant to cover.

Petrol ‘Cost-Plus’ costs Forecast changes •A full update to our forecasts was published in our October Market Outlook on Thursday 15 October.

Of the 10 components, three rose, six fell, and one was unchanged, with the biggest drags coming from softer expectations as the net share expecting the economy toimprove over the next six months fell 4points, while the share saying now is agood time to expand dropped 5points.

The idea that long end supply may not be as high inthe near term as feared turbocharged the flattening trend that was already beginning with investors considering potential 20yr supply changes (more on this below), and inour view this isalso why longer dated swap spreads outperformed this week.

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We therefore still expect one more 25bp rate hike before year-end.

Philippines: BSP expected to hike rates by 25bp We maintain our call for Bangko Sentral ng Pilipinas to hike rates by 25bp on Thursday.

Korea: BoK expected to hold rates We expect the Bank of Korea to keep its policy rate unchanged at 3.0% on Thursday.

We expect retail sales and industrial production to recover slightly to 0.6% and 5.5%, respectively.

But fixed asset investment is expected to continue contracting to -7.5% YoY ytd.

The 70-city property price data for September will also be released.

We expect no change once again, with 1- and 5-year LPR unchanged at 3.0% and 3.5%, respectively.

Market consensus expects the tertiary industry index to decline 0.4% month-on-month in August.

September export growth is forecast to edge up to 20.1% YoY, while imports slow to 20.0% YoY, narrowing the trade deficit sharply to JPY111bn from a revised JPY1,112bn in August.

With the 15bp move lower in UST yield from London close the market opened about 5bp wider.

MENAP growth set for sharp rebound in 2027.

During IMF press briefing on the Regional Economic Outlook, the IMF projected MENAP growth to contract by 1.3% in 2026 before rebounding to 6.6% in 2027, reflecting the uneven impact of the Middle East conflict.