USA

Commentary: The U.S. economy is showing signs of slowing momentum as the labour market softened, with nonfarm payrolls increasing by just 29,000 in September following a revised gain of 133,000 in August, while the unemployment rate edged up to 4.2%. Inflation pressures remained elevated, with headline CPI accelerating to 3.7% year-on-year in September, more than expected. Elevated energy prices remain pertinent with the Iran-US conflict seeing no end in sight. The US economy remained resilient, with US equities remaining near record highs throughout the period, supported by strong corporate earnings and expectations that the pace of further monetary tightening may remain gradual. The S&P 500 and NASDAQ are up by 13.1% and 14.9% respectively YTD.

Europe & UK

Commentary: The euro area economy continued to demonstrate resilience, with second-quarter GDP growth revised up to 0.6% quarter-on-quarter and recent indicators suggesting growth remained robust into the third quarter. Inflation accelerated further, rising to 3.8% in September from 3.2% in August, driven primarily by a sharp increase in energy prices linked to ongoing tensions in the Middle East. Core inflation stood at 2.5%, while services inflation edged up to 3.2%. The ECB raised its key interest rates by 25 basis points in September, reaffirming a data-dependent approach as policymakers sought to contain persistent inflation pressures while acknowledging the economy’s resilience. Financial markets remained volatile during the period, as higher energy prices, elevated bond yields and uncertainty surrounding the inflation outlook weighed on sentiment despite generally supportive economic data. The EURO STOXX 50 remained positive year-to-date and is up by 6.5%.

Malta

Commentary: The Central Bank of Malta noted how economic activity remained broadly in line with historical averages. Business conditions eased slightly in August, while industrial output, services activity, retail trade, and tourism remained resilient. Consumer confidence moderated but stayed above long-term norms. Property demand remained strong, with higher levels of deeds and promise-of-sale agreements. However, building permits declined, particularly in the residential sector. Unemployment held steady at 3.5% in July, though consumer concerns about future unemployment increased. Inflation eased further in August, with HICP inflation falling to 2.0%, remaining below euro area levels. The government recorded a larger fiscal deficit in July due to stronger expenditure growth than revenue. Meanwhile, resident deposits grew at a faster pace, while credit continued to expand, albeit more slowly. The MSE is now up 14.3% YTD.