Written Commentary
The Ghost in the Machine: Q3 2026 Macro Outlook
September 28, 2026
Quieter day to end a tumultuous week; US Industrial Production and Import Prices, Singapore Exports, numerous central bank speakers, and some further US financials’ earnings top the schedule.
- Latest round of central bank speeches is clearly hawkish, but offers few fresh insights into the policy outlook.
- US Industrial Production is seen posting a solid gain, echoing manufacturing surveys; PPI poses an upside risk to the median Import Price forecast.
EVENTS PREVIEW
Quieter Day to End a Tumultuous Week
The week ends on a lighter note in terms of data, events and earnings, with Singapore Exports and South Korean Unemployment to digest ahead of final Eurozone CPI, US Import Prices and Industrial Production. Speeches from Fed’s Warsh, BoE’s Bailey, BoC’s Macklem and BoJ’s Uchida (on behalf of Ueda) overnight also feature alongside a further smattering of US financials earnings.
Markets Eye AI, Earnings and Risk Appetite
As noted previously, equity markets, above all anything AI-related, are indulging in a bout of belly-gazing. Though, judging by hefty inflows into Semiconductor ETFs, retail and other more speculative investors appear to be viewing the week’s sell-off as yet another ‘buy the dip’ opportunity, even if the rally in US Treasury prices implies that others are heading towards more traditional defensive assets, particularly given renewed concerns about AI investment financing, above all among those without the robust cash flows of the Mag7.
The latter will come into focus next week, with results from Meta and Tesla on tap, featuring in a busy week for non-financial earnings.
Central Bank Speakers Offer Few Fresh Insights
The overnight central bank speeches added little in the way of new insights into policy outlooks, though Warsh’s comments about inflation and growth turning out higher than anticipated were implicitly hawkish, as was BoJ Governor Ueda’s observation that “stabilising underlying inflation at around 2% has become more important than before”.
EU Budget Discussions Highlight Divisions
The EU’s major challenge in formulating its next five-year budget outline was summed up succinctly by Dutch PM Jetten, describing yesterday’s discussions as:
“It was at times an icy and pretty predictable exchange which, in short, showed everybody is unhappy.”
US Industrial Production and Import Prices
US Industrial Production is seen posting a solid 0.4% m/m after a flat m/m reading in August, with Manufacturing Output at 0.3% m/m, exactly reversing August’s fall and echoing ongoing strength in the ISM, PMI and regional Fed surveys.
The much stronger-than-expected PPI data suggest that the risks for today’s final leg of this week’s US inflation data, in the shape of Import Prices, are skewed to the upside of the median forecasts of 1.0% m/m headline and 0.6% m/m ex-petroleum.
Looking Ahead to Next Week
Aside from the rush of corporate earnings in the US and elsewhere, next week features G7 and India flash PMIs and a number of other surveys, China’s Q3 GDP and monthly activity and property data, UK CPI, Unemployment and Retail Sales, a slew of US housing indicators, and Japan and Canada CPI, as the Fed goes into ‘purdah’ ahead of its 27/28 October FOMC meeting.
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