Resilient Growth and Strategic Diplomacy Drive Markets

The week in the United States was marked by an intense economic, trade, and political agenda with global impact. On the diplomatic front, Washington and Canberra signed an $8.5 billion strategic agreement focused on the supply of critical minerals, especially rare earths, to reduce dependence on China in the technology and defense sectors. In addition, the White House confirmed that President Trump will meet with his Chinese counterpart Xi Jinping during the upcoming APEC summit in South Korea, with the intention of advancing agreements on agriculture, energy, and issues related to the war in Ukraine. At the same time, the United States imposed sanctions on Russian oil companies Lukoil and Rosneft, aligning itself with the European Union and raising international oil prices by more than 5%, with WTI once again above USD 60 per barrel. Washington also announced an investigation into China's compliance with the 2020 Phase One trade agreement and is considering imposing new restrictions on technology exports dependent on US software.

On the macroeconomic front, inflation data showed a 3% annual increase in September, slightly lower than expected, with core inflation stable. These results reinforce expectations that the Federal Reserve will continue its cycle of rate cuts, with the market anticipating two additional cuts before the end of the year. PMI indicators reflected expansion in both manufacturing and services, with readings of 52.2 and 55.2 points respectively, signaling stronger growth in activity. Meanwhile, existing home sales rose 1.5% in September thanks to lower mortgage rates, although consumer confidence fell to its lowest level in five months, reflecting caution in the face of economic and trade uncertainty.

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