The Davy Digest - 29th September 2025

US equities finished the week lower as hawkish Federal Reserve speakers sought to temper expectations around interest rate cuts for the rest of the year. Initial jobless claims – which had been trending higher – fell sharply, easing concerns that the labour market is the US was beginning to rapidly weaken. On Friday, the core Personal Consumption Expenditures (PCE) price index was released, showing little acceleration in prices through August.

In Europe, the Swiss National Bank held rates steady as expected, while Sweden’s Riksbank delivered a 25 basis point cut. Purchasing Managers’ Index surveys were released for the Eurozone and United Kingdom. In Europe, the composite figure reached a 16-month high on continued services expansion, while in the UK, both services and manufacturing figures slowed. In Japan, Tokyo inflation came in below forecasts, only rising 2.5% year-over-year. 

Last week's highlights

	S&P Global Composite PMI Flash (23/09) – Fell to 53.9 (vs 54.0 expected) Initial Jobless Claims (25/09) – Decreased to 218k Core PCE (26/09) – Steady at 2.9% YoY, in line with consensus
	Consumer Confidence (22/09) – Above consensus at -14.9 HCOB Manufacturing PMI Flash (23/09) – Fell into contraction at 49.5 HCOB Services PMI Flash (23/09) – Increased to 51.4, above consensus
	S&P Global Manufacturing PMI Flash (23/09) – Fell to 46.2 (vs 47.0 expected)  S&P Global Services PMI Flash (23/09) – Fell to 51.9 (vs 54.2 expected)
	Tokyo Inflation (26/09) – Decreased to 2.5% YoY, below consensus

This week, US labour market data will be in focus. Figures for jobs openings, quits, and layoffs are due to be released on Tuesday, ahead of Friday’s nonfarm payrolls and unemployment data. Congress in the US will be holding last-minute negotiations as they attempt to avert a government shutdown over a funding dispute. If the shutdown does occur, a significant number of government employees will be furloughed and there could be delays in the release of any upcoming economic data. In Europe, an inflation print for the bloc will be released on Wednesday, while in the UK, a final estimate of Q2 Gross Domestic Product will be out. In Japan, retail sales data will be the headline release.

What's on the radar

	Job Openings and Layoffs (30/09) Conference Board Consumer Confidence (30/09) Nonfarm Payrolls and Unemployment (03/10)
	Eurozone Inflation (01/10)
	Consumer Credit (29/09) Q2 GDP Final Estimate (30/09)
	Japan Retail Sales (30/09)

Chart of the moment - Surprise Surprise

Source: Bloomberg, September 26th 2025

• The Bloomberg US Economic Surprise Index measures deviations between actual economic data releases and consensus forecasts for each print.
• Following Liberation Day, the index tracked steadily downwards, as economic and policy uncertainty weighed on incoming data. In recent weeks, however, it has rebounded upward sharply.
• This reversal can largely be attributed to stronger-than-expected Gross Domestic Product revisions, as well as a recent surge in the sale of new homes, which has displayed 20% month-on-month growth.

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