OUTLOOK: Price Signal Summary - Bull Cycle in Gold Intact

Euro area industrial production fell -1.2% M/M in August, albeit not as weak as the -1.6% expected after all 'big 4' countries contracted. While a July revision (0.5% from 0.3% unrevised) underpins the upward surprise, Ireland had an outsized positive impact this time, at 9.8% M/M. Sequential weakness was broad-based in August with all main categories except non-durable consumer goods down M/M.

• All four main Eurozone countries saw M/M declines in August, with Germany standing out negatively at -5.2% (auto slump at least in part attributed to holiday closures and production changeovers), France at -0.7%, Italy at -2.4%, and Spain at -0.1%. These compare to July prints of 1.5%, -0.1%, 0.4% and -0.5%, respectively.
• Eurostat added an explicit comment on Ireland's 9.8% M/M print, saying "the high weight of subcontracted production makes the Irish industrial production index volatile, monthly changes can be higher than in other countries". The volatility of the series suggests a risk of reversing in September.
• August weakness was broad-based across sectors, with energy at -0.6% M/M (-1.7% prior), intermediate goods at -0.2% (0.5% prior), capital goods at -2.2% (1.7% prior), durable goods at -1.6% (1.2% prior), and only non-durable goods marginally positive at 0.1% (1.8% prior). Also on a Y/Y comparison, all sectors except non-durable consumer goods (8.2% Y/Y, not unusually high for recent months) saw declines in August.
• The Eurozone Manufacturing PMI dipped back into contraction zone amid lower factory orders in September: "September’s contraction in the headline [Manufacturing] PMI was driven by a reduction in new order inflows and a sharper rate of job shedding. Production volumes continued to expand, although the pace of growth slowed markedly from August’s near three and-a-half-year high."

• EUR/USD: Oct15 $1.1600(E1.8bln); Oct16 $1.1500-20(E1.5bln), $1.1580-00(E3.5bln); Oct17 $1.1510-15(E1.7bln), $1.1670-80(E1.0bln)
• USD/JPY: Oct15 Y143.00($1.8bln)

Labour market data from the public employment service (PES) pointed to stabilising developments in September. The Riksbank expects labour market conditions to improve from the start of 2026, so a stabilisation in Q3/Q4 is a necessary first step. LFS unemployment data is due on Friday, with the median analyst expecting an 8.7% unemployment rate (vs 8.8% prior). 

• The PES unemployment claims rate eased for the second consecutive month to 6.95% in September (vs 7.06% in August, 7.10% in June and July).
• The stock of vacancies and vacancy growth may have started to bottom out. In September, there were 87k vacancies, up from 81.5k in August for the highest since February. On an annual basis, vacancy growth remains negative a -6% Y/Y, but this is still above August’s -14% and July’s -22%.
• The 3mma of redundancy notices fell to 4,775, down from 4,922 in August for the lowest in over two years.