观点

Meanwhile, food prices were flat MoM, below our 0.3% forecast.

Recreation surprised to the upside, rising 0.5% MoM versus our 0.2% forecast.

However, this was partly offset by a weaker than expected 0.2% increase in education and communication, versus our 0.4% forecast, as communication prices fell 0.2% MoM.

Other sticky categories offered a more mixed picture, with education up 0.6% MoM, communication down 0.2% and household furnishings flat.

VIX 16.87, 20-day realised volatility 10.04%, stable, the index within 0.15% of its 50-day average.

Option-implied expected move for each report day against the average move after the last eight reports, with implied-volatility rank and last close, as of 15 October 2026.

• Tail risk signal: SKEW at 157.30 is the highest in our stored series, above all 60 previous sessions: far downside protection got dearer on a day the 30-day measure added only 1.60 points.

• Correlation read: three-month implied correlation rose 9.31% to 12.80, near the top of its three-month range, still low outright, while dispersion was flat at 36.60.

Economic conditions provide little support; we expect GDP growth of only 0.3% in 2026 and 0.6% in 2027.

Over the past 15 years, its public debt ratio has risen significantly, while many other European countries have reduced theirs.

French public debt reached 119% of GDP in mid-2026 and is expected to increase to 121.7% in 2027.

Without them, the government estimates that the deficit would reach around 6.5% next year.

The budget is likely to pass, but concessions may be needed The parliamentary process can run until 17 December under the 70-day constitutional timetable.

Fiscal uncertainty will persist in 2027 Even if the budget is adopted, fiscal uncertainty will not disappear.

Yet the presidential election on 18 April and 2 May 2027 will probably be followed by legislative elections, which could again produce a fragmented National Assembly and make those reforms difficult to pass.

The 2027 budget will be a critical first step in containing France’s fiscal deterioration.

We look at the three possible scenarios and what they may mean for the economy and markets President Donald Trump’s approval rating has hit new lows as we approach the US midterms in November The US midterm elections are on 3 November, with all 435 House of Representatives seats and 35 of the 100 Senate seats up for election.

While few expect the president to follow through with his promise of $5,000 checks for returning Republicans to Congress, more defence spending will not be fully offset by efficiency savings or lower healthcare expenditure.

The 10yr yield likely pops above 5.5% and stays above, while the 2yr yield rises too and holds at around 5%.

The Democrats need to flip 4 of the 22 Republican seats and hold on to all 13 of their seats that are up for election to gain control of the Senate.

Given the gridlock in Congress, the president will only be able to implement policy where he can use Executive Powers: 1) Foreign policy and diplomacy, including trade policy, 2) national security and defence, 3) law enforcement and regulatory policy, 4) appointments of personnel, and 5) administration and management policy.

It will likely be an issue by mid-summer 2027 with little ground for compromise between the two sides in Congress.

To be impeached, 67 of 100 Senators must vote in favour, which is likely not going to happen given there won’t be enough Democrats (and supportive Republicans) to force it through.

We will probably see front-end yields easing lower while back- end yields maintain an upside bias, albeit within our preferred 5.25% to 5.5% range.

Solid consensus earnings growth forecasts of 19% in 2026 and 12% in 2027, alongside reasonable valuations, strengthen the case for sustained sector performance.

Consensus earnings growth forecasts of 40% in 2026 and 16% in 2027 should provide further support.

As we embark on the Q3 2026 earnings season, we will continue to assess whether banks’ earnings and underlying fundamentals can sustain their growth momentum into 2027.

• Asia’s capital markets are likely to become still more important over five to 10 years.

When the International Finance Corporation (IFC) issued its first public green Wonton bond in May 2026, building on its inaugural Wonton issuance in 2025, the transaction was significant not for its size but for the precedent it confirmed.

At HKD 6 billion (approximately USD766 million), the three-year issue raised just a fraction of the IFC’s USD20 billion funding programme for fiscal year 2026.

For instance, in May 2026 Pakistan issued its first Panda bond.

While Egypt’s 2023 Panda bond had already opened the door to lower-rated international issuers, Pakistan’s issuance demonstrated the growing depth of demand among Chinese investors for international sovereign credits.

In 2024, it became the first sovereign issuer in Asia to launch a sustainability-linked bond, raising THB30 billion (approximately USD880 million) through a 15-year issuance linked to national climate objectives.

In September 2026, Thailand followed this with a second sustainability-linked bond, raising THB25 billion (approximately USD750 million) and becoming the first sovereign issuer in Asia to embed biodiversity targets within a sustainability-linked financing framework.

Given the momentum, ongoing reforms, low borrowing costs and China’s huge pool of investors, these markets are likely to become much more material for borrowers over the next five to 10 years.

Since stocks ex-Mag7 began softening after August 13 th , only energy and health care have been up while all other sectors have been lower (chart 2).

Total producer prices are expected to rise by 0.6% m/m SA with prices ex-food and energy up 0.3%.

US CONSUMERS MIGHT TAKE A BREATHER US retail sales may struggle in the wake of August’s large 1%+ gains across headline, core and control group readings.

One reason is that auto sales fell by 4.7% m/m SA in September, but this could be offset by the weighted impact of higher gasoline prices since the figures are reported in nominal terms.

Mixed August readings for manufacturing and wholesale are expected for the month of August (8:30amET).

The trade deficit sharply narrowed mainly as imports fell (-1.5% m/m) and exports were flat (0.1%) after a strong prior gain of 2%.

With presidential elections due in April and May 2027 and street protests mounting, few parties are willing to back austerity.

We still expect the government to invoke Article 49.3 to pass the budget without parliamentary approval, but tensions may rise first.

This will increase pressure on governments to adopt austerity measures, resulting in a less accommodative fiscal stance in 2027.

Following a very strong second quarter, artificially boosted by Irish GDP figures, we now expect average growth of 1.0% in 2026.

Assuming energy prices normalise in 2027, growth should average 1.2% next year.

However, we still expect a rate cut by year-end We expect the National Bank of Hungary to play it safe and keep rates on hold on 20 October Our call The National Bank of Hungary (NBH) picked the cautious option last month, keeping the base rate unchanged.

A sound and credible 2027 draft budget and a well-received medium-term fiscal consolidation plan could create a favourable idiosyncratic shock, reducing risk premiums on Hungarian assets.

Against a backdrop of elevated global uncertainty, and despite the prospect of lower local risk premiums, we expect the National Bank of Hungary to play it safe and keep rates on hold on 20 October.

Our assumption is that domestic developments will open the door to a 25bp rate cut in December, leaving the base rate at 5.25% at end-2026.