Global Economic & Credit Market Briefing

New Home Sales

• New home sales slipped 0.6% to a 676K annualized pace in September from a revised 680K in August, and are 5.3% below a year ago. That beat the roughly 653K forecast, and Census notes the monthly and annual declines are not statistically significant
• The beat is incentive-driven again. Builders are relying on rate buydowns and price cuts: 51% of new homes sold for under $400K, up from 46% a year earlier, and the median new-home price has been below the median existing-home price for seven straight months. The median rose 3.9% MoM to $400,400 but is down 3.9% YoY, with the 30-year mortgage at about 6.9%
• Supply remains heavy at 476K homes, or 8.4 months, down from 8.5 in August. Regions are diverging: the Northeast rose 28% and the West 21.4% MoM, while the South, the largest market, fell 6.6% and the Midwest 7.3%

FOMC Rate Decision

• The Fed held rates at 3.75–4.00%, as markets expected (~93% priced), but the vote was split. Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented in favor of a 25bp hike, Cook's first-ever dissent
• Warsh said the economy is expanding at a strong pace and called bringing inflation down a gradual process, with no "soft" inflation target. He added that higher rates are affecting the AI infrastructure build-out and said politics played no role six days before the midterms. Treasury Secretary Bessent pushed the Fed to treat the energy shock as transitory
• Structural change: Warsh announced fewer rate-setting meetings next year, removing one 2027 decision, plus separate strategy meetings with no rate decision or statement. Each remaining meeting now carries more weight, and the dissents keep a December hike firmly in play

Consumer Spending

• Nominal spending rose 0.5% in September, slightly below the 0.6% forecast and down from 0.9% in August, with services at +$78.1B and goods at +$35.1B. Real spending was essentially flat (less than 0.1%), so inflation absorbed the entire gain. Personal income rose only 0.2%, below the 0.3% expected
• Headline PCE inflation rose 0.5% MoM to 3.6% YoY from 3.4%, slightly below the 3.7% Dow Jones consensus. Core PCE rose 0.3% MoM to 3.1% YoY from 3.0%, so the Fed's preferred gauge is moving further from target
• The saving rate fell to 3.8% from 4.0%, near its lowest since 2022, which means households are funding spending by saving less rather than earning more. Q3 GDP, released the same morning, beat expectations at 3.4%, driven by AI investment and consumer spending growth of 3.8%

Jobless Claims

• Initial jobless claims, a measure of how many workers were laid off across the U.S., decreased to 194,000 in the week ended October 23, down 1,000 from the prior week.
• The four-week moving average was 196,750, down 1,250 from the prior week.
• Continuing claims — those filed by workers unemployed for longer than a week — decreased at 1.701 million in the week ended October 16. This figure is reported with a one-week lag.

Fed's Balance Sheet

• The Federal Reserve's assets totaled $6.746 trillion in the week ended October 30, down $8.0 billion from the prior week.
• Treasury holdings totaled $4.576 trillion, up $4.7 billion from the prior week.
• Holdings of mortgage-backed securities (MBS) were $1.89 trillion in the week, down $7.9 billion from the prior week.

Total Public Debt

• Total public debt outstanding was $40.59 trillion as of October 30, an increase of 6.5% from the previous year.
• Debt held by the public was $32.71 trillion, and intragovernmental holdings were $7.75 trillion.

GDP

• The latest annualized U.S. GDP stands at $32.56 trillion as of June 30, 2026, an increase of 2.06% from the previous quarter, & an increase of 6.31% from the previous year.
• The total public debt-to-GDP ratio is at 121.19% as of June 30, an increase of 2.97% from the previous year.

Inflation Factors

CPI:

• The consumer-price index rose 3.7% in September year over year.
• On a monthly basis, the CPI increased 0.6% in September on a seasonally adjusted basis, after increasing 0.4% in August.
• The index for all items less food and energy (core CPI) rose 0.3% in September, after rising 0.3% in August.
• Core CPI increased 2.6% for the 12 months ending September.

Food & Beverages:

• The food at home index increased 1.8% in September from the same month a year earlier, and decreased (0.1%) in September month over month.
• The food away from home index increased 3.5% in September from the same month a year earlier, and increased 0.2% in September month over month.

Commodities:

• The energy commodities index increased 9.3% in September after increasing 4.2% in August.
• The energy commodities index rose 35.3% over the last 12 months.
• The energy services index fell (0.2%) in September after decreasing (0.6%) in August.
• The energy services index rose 4.6% over the last 12 months.
• The gasoline index rose 34.2% over the last 12 months.
• The fuel oil index rose 74.2% over the last 12 months.
• The index for electricity rose 4.4% over the last 12 months.
• The index for natural gas rose 5.0% over the last 12 months.

Supply Chain:

• Drewry's composite World Container Index decreased to $4,429.33 per 40ft container for the week of October 30.
• Drewry's composite World Container Index has increased by 143.2% over the last 12 months.

Housing Market:

• The shelter index increased 0.4% in September after increasing 0.3% in August.
• The rent index increased 0.4% in September after increasing 0.3% in August.
• The index for lodging away from home decreased (0.3%) in September after increasing 0.5% in August.

Federal Funds Rate

• The effective Federal Funds Rate is at 3.88%, up 0.24% year to date.

Money Market Funds

• Money market fund assets stood at $7.90 trillion as of October 28, 2026, down (0.5%) from the previous week, & up 6.5% from the previous year.

Middle East

• Oil rose more than 2% Friday after a small boat attacked a tanker transiting the Strait of Hormuz with two explosive devices, following Houthi claims of strikes on Saudi Arabia's Ras Tanura and Rabigh refineries and Aramco's Abqaiq facility. Brent rose 2.5% to $117.75 (December, expiring) and 2.4% to $113.44 (January), while WTI gained about 2% to around $104. Saudi air defenses also intercepted two ballistic missiles aimed at Riyadh
• The price spike comes even though Gulf exports have recovered to an average of 15.7M bbl/day, at times above prewar levels. The premium now reflects shipping risk, insurance and freight costs rather than lost volumes. The bigger risk sits after the U.S. midterms: Washington has told Gulf states to prepare for a possible short, intense campaign against Iran, even as Vice President Vance has reached out to Tehran to revive talks. Seven OPEC+ producers meet Sunday
• Israel's parliamentary election produced a hung Knesset. Preliminary results give Netanyahu's bloc about 53 seats and Gadi Eisenkot's opposition about 48, both short of the 61 needed. Record Arab turnout gave Arab parties Ra'am and the Joint List a combined 19 seats, beating their prior record of 15 and making them potential kingmakers
• Ousting Netanyahu likely depends on Arab support, which most of Eisenkot's bloc has ruled out and about 60% of Jewish Israelis oppose. Netanyahu has alleged the vote was "stolen" with Qatari help, without evidence. The election commission has ordered a one-week probe, and Qatar, a key mediator with Hamas and Iran, called the claims ridiculous. A prolonged impasse or contested result would add political uncertainty to Israel just as a renewed Iran campaign is being prepared

Europe

• Ukraine struck Russia's Novokuibyshevsk refinery in the Samara region, ending a two-week pause in refinery attacks that followed heavy pressure from the Trump administration. European allies had advised Kyiv to wait until after the U.S. midterms. The strike came a day after Russian drones and missiles killed at least 27 civilians, including 15 on a railway platform in Dnipro, as Moscow escalates attacks on Ukraine's heating and power grid ahead of winter
• The move reopens a rift with Washington. Trump has blamed Ukraine's refinery strikes for high fuel prices, which energy experts mainly attribute to the Iran war, and earlier this month called for Zelensky's removal. Kyiv was also hampered by SpaceX's speed cap on military Starlink, which paralyzed some drone operations for 10 days until service was restored on October 24. Zelensky says Ukraine would halt refinery strikes in exchange for more protection of its own energy infrastructure
• The ECB left its key rate unchanged on Thursday after two hikes since the Iran war began, the latest in September. Eurozone inflation rose to 3.8% in September from 3.2%, but almost entirely because of energy, with manufactured goods prices slowing. Wage talks in early 2027 and winter heating bills are the real test for second-round effects, which puts the December meeting in focus
• The bigger constraint is the bond market. French yields have hit their highest levels since the early 2000s on doubts over Paris's deficit plans, tightening financial conditions across the eurozone without ECB action. That gives the ECB a reason to signal a higher bar for further hikes and keep its anti-contagion tools in view, avoiding a repeat of 2011, when it hiked into an energy shock and deepened the debt crisis

China

• Attendance at this week's four-day Central Committee plenum was the lowest since 1968, during the Cultural Revolution: about a quarter of the 376 members seated in 2022 were absent, many of them removed in Xi's anti-corruption and loyalty purges. The plenum confirmed 33 expulsions, including former senior diplomat Liu Jianchao, and for the first time under Xi did not fully replenish the committee, leaving 191 voting members instead of 205. Party discipline hit a record 983,000 people last year and about 680,000 from January to September
• The plenum confirmed the next party congress for the second half of 2027, where Xi is expected to secure a fourth term and install a new leadership team. Gen. Zhang Shengmin is now the only military member of the 22-person Politburo. Analysts warn that the climate of fear is fueling policy paralysis, with punishments for "inaction" up 18.6% this year, and Brookings argues that Xi risks greater isolation as his allies retire
• Beijing reported 4.5% Q3 growth, but independent estimates are far lower. Capital Economics puts Q3 at about 2% using alternative activity data, and Rhodium Group estimates full-year 2026 growth near 0%, citing fixed-asset investment down more than 7% YoY through September and weak retail sales. The IMF, by contrast, projects 4.5%, in line with Beijing's target
• Labor data is under similar doubt. Official unemployment is 5.2% and youth unemployment 18%, but a Tsinghua economist estimates broad urban unemployment at 10.2%, and the gig workforce is expected to reach 320 million. With Beijing suppressing negative commentary and cutting off data sets, the gap matters for investors: if growth is weaker than reported, more stimulus may be needed, though Chinese economists doubt meaningful household support is coming

Americas

• Opposition leader María Corina Machado returned from 11 months in exile and is pressing for an election date, calling the transition to democracy "irreversible." Interim President Delcy Rodríguez, installed by the U.S. in January and rejected by about two-thirds of Venezuelans in polls, stayed vague on timing and said elections shouldn't be a "generator of conflicts." Three rounds of U.S.-brokered transition talks since August have produced no timetable, and Machado says she won't take part
• The standoff tests Washington's strategy of working through Rodríguez to reopen Venezuela's oil sector to U.S. investors. Rubio has warned Machado's movement against street protests, while her camp argues that major oil investment, including the recent U.S. deal with businessman Alejandro Betancourt, will only materialize under a democratic government. Her party backs a late-July 2027 vote, and a nationwide campaign tour is planned
• Lula won Brazil's runoff by more than 4.4 million votes, a result recognized by over 50 countries and judged clean by international observers. Trump has refused to formally recognize it and has suggested, without evidence, that it may have been rigged. Defeated candidate Flávio Bolsonaro fled the country despite a Supreme Court order barring him from leaving, crossing into Argentina with help from Milei's team and flying to Miami, where Trump personally approved his family's entry under one-year humanitarian parole
• Bolsonaro calls himself Brazil's "leader" and plans a political operation in exile, though the White House signals it won't go beyond offering refuge before the midterms. The episode deepens a U.S.–Brazil rift that already includes steep U.S. tariffs tied to the Bolsonaro prosecutions and sanctions on a Brazilian Supreme Court justice. It also strains Brazil–Argentina relations, after Brasília had already recalled its ambassador over Milei's campaigning for Bolsonaro

Russia

• U.S. envoy Steve Witkoff praised Putin as a "humanitarian" after securing the release of detained American Stephen Hubbard, drawing sharp criticism from Republican Senators Cornyn and Tillis. The remarks fit a broader U.S. shift toward incentives for Moscow, including a Russian diesel purchase deal, sanctions waivers on Russian diesel until April, delayed new sanctions and openness to a Trump–Putin–Xi meeting, while the Kremlin dismissed European-Ukrainian peace proposals as having little value

UK

• U.K. inflation rose to 3.5% in September from 3.1%, above the 3.4% forecast, while core inflation rose to 2.8% and services to 3.7%, signs that energy costs are starting to spread. That makes a hike from 3.75% at the BOE's November 5 meeting all but certain, and Chancellor John Healey's October 28 budget had to balance cost-of-living support against rising gilt yields and shrinking fiscal headroom

India

• Youth-led protests over the removal of about 130 million voters from the rolls are forcing the government to back down: election officers say they've been told to process flagged voters without extra documents and to drop the requirement to prove parents' or grandparents' registration. With mass detentions backfiring and Hindus also among those removed, the movement has widened beyond earlier Muslim-focused protests, a risk for Modi's party ahead of Uttar Pradesh elections early next year

Spain

• At least 68 people were killed and about 70 injured when a Renfe high-speed train traveling at about 125 mph hit a stationary Iryo train south of Madrid, the second deadly crash on the Madrid–Andalusia line this year after 46 died near Córdoba in January. Service on one of Spain's main rail arteries is suspended, train drivers went ahead with a safety strike, and the crash lands weeks before national elections, raising pressure on Sánchez and on investment in the world's second-largest high-speed network

Ireland

• Irish GDP rose 5.5% QoQ in Q3 after 10% in Q2, driven partly by AI-related information and communications activity at U.S. tech headquarters, which helped lift eurozone Q3 growth to 0.4% QoQ in Friday's flash estimate, above consensus; excluding Ireland, growth was about 0.2%. The ECB is unlikely to react, since it routinely looks at data excluding Ireland: contract manufacturing and profits booked for U.S. shareholders make Irish GDP a poor gauge of eurozone demand

France

• After riots in several cities and more than 400,000 marchers last Saturday, the government offered its first major concessions to student protesters: smaller class sizes, 15,000 new university places, €4B in school-renovation loans and scrapping the Parcoursup admissions platform by 2028. Unions have pledged to keep protesting as the movement broadens into cost-of-living demands, which Paris can barely afford with record debt of €3.5T and a 5.1% deficit, adding to the stress already visible in French bond yields

Kenya

• Kenya isolated 134 contacts after a traveler from Congo died of Ebola in Nairobi, and eight have tested positive, while Nigeria confirmed its own Bundibugyo-strain case in a woman arriving from Uganda. Congo's outbreak has now passed 9,500 cases and 4,600 deaths since May, with no approved vaccine, and threatens to exceed the 2014–16 West Africa epidemic. The U.S. has raised its Kenya travel advisory to "reconsider travel," a direct risk to tourism revenue

West Africa

• At least 17 gold mines worth more than $4B have started production in West Africa since 2020, lifting the region to about 15% of global output as miners chase near-record prices. Resource nationalism is rising at the same time: Burkina Faso has transferred five mines to its state miner, Ghana is requiring 100% local ownership of surface mining and royalties of up to 12%, and Mali extracted a $420M settlement from Barrick. An insurgency has killed nearly 10,000 people across the Sahel in the past year

Oil Prices

• WTI: $104.12 per barrel
• +0.82% WoW; +38.97% YTD; +72.16% YoY
• Brent: $117.64 per barrel
• +0.79% WoW; +49.76% YTD; +80.98% YoY

U.S. Production

• U.S. oil production amounted to 14.0 million bpd for the week ended October 23, up 0.3 million bpd from the prior week.

Rig Count

• The total number of oil rigs amounted to 603, flat from last week.

Inventories

Crude Oil

• Total U.S. crude oil inventories now amount to 410.6 million barrels, down (1.3%) YoY.
• Refiners operated at a capacity utilization rate of 92.8% for the week, down from 93.4% in the prior week.
• U.S. crude oil imports now amount to 5.758 million barrels per day, down 26.2% YoY.

Gasoline

• Retail average regular gasoline prices amounted to $4.18 per gallon in the week of October 30, up 37.6% YoY.
• Gasoline prices on the East Coast amounted to $4.14, up 36.9% YoY.
• Gasoline prices in the Midwest amounted to $4.36, up 47.5% YoY.
• Gasoline prices on the Gulf Coast amounted to $3.81, up 42.1% YoY.
• Gasoline prices in the Rocky Mountain region amounted to $4.60, up 48.3% YoY.
• Gasoline prices on the West Coast amounted to $5.56, up 31.2% YoY.
• Motor gasoline inventories were up by 3.9 million barrels from the prior week.
• Motor gasoline inventories amounted to 209.2 million barrels, down (0.7%) YoY.
• Production of motor gasoline averaged 9.24 million bpd, down (3.6%) YoY.
• Demand for motor gasoline amounted to 8.358 million bpd, down (6.3%) YoY.

Distillates

• Distillate inventories decreased by 1.5 million in the week of October 30.
• Total distillate inventories amounted to 102.8 million barrels, down (8.3%) YoY.
• Distillate production averaged 5.161 million bpd, up 14.7% YoY.
• Demand for distillates averaged 4.207 million bpd in the week, up 17.5% YoY.

Natural Gas

• Natural gas inventories increased by 80 billion cubic feet last week.
• Total natural gas inventories now amount to 3,724 billion cubic feet, down (3.8%) YoY.

High-yield:

High yield bond yields decreased 16bps to 8.09% and spreads tightened 18bps to 350bps. Leveraged loan yields decreased 2bps to 9.62% and spreads tightened 5bps to 508bps. WTD high yield bond and WTD leveraged loan returns were positive 55bps and 29bps, respectively. HY rallied as October's AI funding fears and decompression eased, with CCCs and telecom outperforming. HY funds saw their largest inflow in 12 weeks (+$1.3bn) after nine weeks of outflows. Loans also gained as CCC, cable and telecom rebounded, though loan funds posted their first outflow in 18 weeks ($304mn). Primary activity was muted, with October HY issuance at $14.6bn, the lowest since April 2025.

Week ended 10/30/2026

Yields & Spreads¹

Pricing & Returns¹

Fund Flows²

New Issue²

Distressed Level (trading in excess of 1,000 bps)²

Total HY Defaults

Leveraged loans:

Week ended 10/30/2026

Yields & Spreads¹

Pricing & Returns¹

Fund Flows²

New Issue²

Distressed Level (loan price below $80)¹

Total Leveraged Loan Defaults

Default activity:

• Most recent defaults include: Leslie's Poolmart ($757mn, 09/30/2026), Brightline East ($1.1bn, 09/24/2026), Hughes Satellite Systems ($1.5bn, 08/02/2026), Unifrax Investment ($3.1bn, 07/26/2026), Dish DBS ($9.8bn, 06/30/2026), QVC Group ($2.2bn, 04/16/2026), Cumulus Media ($641mn, 03/05/2026), Trinseo ($390mn, 02/17/2026), Beasley Broadcasting Group ($189mn, 02/01/2026), Nine Energy Service ($300mn, 02/01/2026), Multi-Color ($4.5bn, 01/29/2026).

CLOs:

Week ended 10/30/2026

New U.S. CLO Issuance²

New U.S. CLO YTD Issuance²

Note: High-yield and leveraged loan yields and spreads are swap-adjusted

¹ Source: Credit Suisse High Yield and Leveraged Loan Index

² Source: JP Morgan

Ratings activity:

S&P and Moody's High Yield Ratings

Source: Bloomberg

Appendix:

Diagram A: Leveraged Loan Trading Levels

Source: Credit Suisse Leveraged Loan Index

Diagram B: High Yield and Leveraged Loan LTM Price

Diagram C: Leveraged Loan and High Yield Returns

Diagram J: New Issue - Leveraged Loan and High Yield

Diagram K: Leveraged Loan + HY Defaults by Sector – LTM

Source: JP Morgan Default Monitor

Diagram L: CLO Economics

Diagram M: Developed Country Govt. Bond Yields (%)

Diagram N: S&P 500 Historical Multiples

Source: S&P Capital IQ

Diagram O: U.S. Middle-Market M&A Valuations (EV/EBITDA)

Source: Pitchbook

Diagram P: U.S. Large Cap M&A Valuations (EV/EBITDA)

Source: Pitchbook

Diagram Q: Dry Powder for All Private Equity Buyouts ($B)

Diagram R: Dry Powder for All US Debt ($B)

Diagram S: Structured Credit Spreads

Source: Bloomberg

Diagram T: Structured Credit Yield

Source: Bloomberg

Diagram U: SOFR Curve

Diagram V: CMBS Spreads

Source: Bloomberg