Written Commentary
The Ghost in the Machine: Q3 2026 Macro Outlook
September 28, 2026
Tensions in the Middle East and Black Sea continue to cast a long shadow; digesting German Orders slump and French Industrial Production on light day for data, plenty more central bank speakers and US EIA Short-Term Energy Outlook ahead.
- German Orders slump should again temper optimism on outlook, despite stronger than H1 growth.
EVENTS PREVIEW
Spot Crude and Product Prices
Table: Spot Crude and Product prices (Bloomberg)
Geopolitical and Monetary Policy Risks Remain Elevated
For all that risks AI related risk appetite continues to be the driver of a narrow equity index rally (and supported by strong demand for the latest round of sector credit issuance), the overall geopolitical and monetary policy backdrop remains adverse. Tensions in the Middle East and the Black Sea remain high, with no real signs that these might ease in the near-term.
French Fiscal Concerns Remain Under Scrutiny
Meanwhile fiscal concerns in France continue unabated, despite National Rally presidential candidate Le Pen outlining plans to cut spending by EUR 25 bln p.a. through 2032 in a ‘shadow budget’ outline, which will do little to assuage markets that are sending a clear signal that actions speak much louder than words.
Bank of Japan Policy Outlook Remains in Focus
BoJ Ueda’s comments overnight were clearly hawkish but still suggest that an October rate hike is unlikely, though a further hike in December seems highly probable.
Energy Markets Continue to Send Mixed Signals
While crude oil futures prices have stabilized, a cursory look at the attached table of spot crude prices underlines that physical and paper markets are telling two different stories about energy price pressures.
German Factory Orders Weigh on Economic Sentiment
The day’s schedule of statistics is light, with a much sharper than expected slide in German Factory Orders, paced by a slump in domestic and large scale orders the only significant item and reinforcing our view that optimism about the German economic outlook needs to be tempered, while central bank speakers are again very abundant.
EIA Outlook Reports Top the Commodities Agenda
The EIA’s monthly Short Term Energy Outlook (STEO) and its Winter Fuels Outlook will top the agenda for commodities.
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