Weekly economic and financial commentary

Wells Fargo Research Team Wells Fargo

Summary

United States: Should They Stay or Should They Go?

Delayed data started to trickle in this week, adding to the debate over the Fed's course of action at its December meeting. The September jobs report painted the picture of a cooling but not rapidly deteriorating jobs market. We believe the data are supportive of a December cut, but it's not a done deal.
Next week: Consumer Confidence (Tue.), Retail Sales (Tue.), Durable Goods (Wed.)

International: Sluggish Yet Resilient

Japan’s economy contracted in Q3 while prices accelerated in October. In contrast, inflation eased in the UK and Canada, reinforcing expectations for policy adjustments. Eurozone PMIs signaled mixed momentum—sluggish but positive growth—while UK PMIs disappointed, highlighting stalled activity.
Next week: RBNZ Policy Rate (Wed.), Canada GDP (Fri.), India GDP (Fri.)

Topic of the Week: Tariffs on the Table

As consumers gear up for the holiday season, they are contending with stubborn inflation. The trend decline in inflation stalled this year, with the Consumer Price Index (CPI) increasing 3.0% year-over-year in September—its highest reading since January. Though services prices have been gradually slowing, goods prices have experienced a pickup, and food categories have not been immune.

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Wells Fargo Research Team

Wells Fargo

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.