Global Economic & Credit Market Briefing

S&P Global Flash US PMI

• Composite PMI fell to 57.6 in October from 58.4, and Services to 57.9 from 58.8. Manufacturing PMI edged up to 56.0 from 55.9. New orders increased, driven mainly by domestic demand and some precautionary stockbuilding. Export sales also rose, with goods export orders up for the first time since June 2025
• Employment rose in both manufacturing and services as firms added capacity to keep up with demand, and order backlogs continued to grow. Supplier deliveries slowed because of material shortages, low stock levels, labor shortages and shipping delays. Manufacturers became more optimistic, while service providers stayed cautious over the cost of living, higher borrowing costs and political uncertainty
• Selling prices and input costs rose across goods and services. Firms cited oil, energy, fuel and freight costs, plus higher steel, aluminum and copper prices from tariffs and shortages; service providers also reported higher wages, utility and insurance costs. Output readings are consistent with about 5% annualized GDP growth in Q4, after about 4% in Q3

Pending Home Sales

• Pending home sales fell 7.3% month-over-month and 11.3% year-over-year to an index of 66.0, the lowest on record. Every region declined, with the West at 49.3 and the South at 79.2
• The 30-year fixed rate jumped from about 6.8% to 7.6% during September. Contract cancellations rose to 14.5%, while the median existing-home price held at $417,500, up 1.3% year-over-year
• Single-family starts fell 4.56% to an 859,000 annual pace and builder confidence hit a 14-year low. New pending sales for the week ending Oct. 16 were down 13.1% year-over-year

Leading Economic Index

• The Leading Economic Index was unchanged in September at 99.6, after a 0.1% decline in August. It rose 0.6% from March to September 2026, reversing a 1.1% drop over the prior six months
• Five of ten components contributed positively, led by the interest rate spread and manufacturing hours. Those gains were offset by a large drop in consumer expectations and smaller declines in stock prices, capital goods orders and building permits. There was no recession signal, the diffusion index was slightly above 50, and the 2026 real GDP forecast is 2.2%, with 2.0% for 2027
• The Coincident Index rose 0.3% to 115.3, with all four components positive, and gained 0.9% over six months. The Lagging Index rose 0.5% to 121.1 and gained 1.0% over six months

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 16, down 6,000 from the prior week.
• The four-week moving average was 197,750, down 1,000 from the prior week.
• Continuing claims — those filed by workers unemployed for longer than a week — increased at 1.728 million in the week ended October 9. This figure is reported with a one-week lag.

Fed's Balance Sheet

• The Federal Reserve's assets totaled $6.754 trillion in the week ended October 23, down $2.0 billion from the prior week.
• Treasury holdings totaled $4.571 trillion, up $1.3 billion from the prior week.
• Holdings of mortgage-backed securities (MBS) were $1.90 trillion in the week, down $0.8 billion from the prior week.

Total Public Debt

• Total public debt outstanding was $40.44 trillion as of October 23, an increase of 6.4% from the previous year.
• Debt held by the public was $32.60 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 increased to $4,585.14 per 40ft container for the week of October 23.
• Drewry's composite World Container Index has increased by 162.6% 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 $7.94 trillion as of October 21, 2026, up 0.3% from the previous week, & up 7.4% from the previous year.

Middle East

• Bunker-buster bombs were loaded aboard a U.S. carrier near Iran, and the USS Theodore Roosevelt and another Marine Expeditionary Unit are being deployed to the region. Iran's IRGC adopted an "offensive" military doctrine and threatened U.S. bases and Gulf internet cables
• An Oct. 23 U.S. intelligence memo found Iranian plots against Americans had reached advanced stages. The U.S. pulled diplomats from Saudi Arabia, evacuated personnel from embassies and bases, and issued travel warnings for 13 countries. Houthi missiles targeted Riyadh, and Saudi Aramco evacuated its Dhahran headquarters
• Pakistan and Iraq closed some border crossings with Iran, on top of a U.S. naval blockade and airline sanctions that have cut most of Iran's sea and air routes. The blockade has stopped $25 billion in Iranian oil exports
• Brent closed at $116.72 on Oct. 23, its highest since April 29 and up 6.2% for the week; WTI closed at $103.27. At least 18 ships were hit in Hormuz over two weeks, and shipping crude from the Gulf to Asia costs over $37 a barrel, five times prewar levels. The IMF projects a 1.3% contraction for the Middle East, North Africa and Pakistan in 2026

Europe

• At least 400,000 people protested across France on Oct. 24, 110,000 of them in Paris, over the cost of living, fuel prices and education funding. Police made 1,314 arrests nationwide, and 70,000 officers were deployed. The weekend before, more than 500,000 people protested and about 3,000 businesses were damaged or looted
• The eurozone's October flash composite PMI fell to 51.9 from 53.1, a four-month low and below the 52.7 expected. Services fell to 51.7 and manufacturing to 52.4. France's composite dropped into contraction at 48.4 from 51.1, and its 10-year bond yield reached 5.14%. Germany's composite came in at 52.8
• Eurozone inflation was 3.8% in September, the highest since September 2023. Core inflation was 2.5% and services 3.2%. Wholesale gas prices are up more than 140% from a year ago. The ECB has raised rates twice in recent months and meets next week; October inflation data is due Nov. 4
• Russia and Ukraine agreed to a local ceasefire in Oleshky, in the Kherson region, to let aid in, and 270 Ukrainian prisoners came home in an exchange. Russia launched 126 drones overnight on Oct. 24, 101 of which were shot down or suppressed; Russian attacks killed 4 and injured 78 over the day. A drone attack on Moscow on Oct. 23 shut down all of its airports

China

• China's GDP grew 4.5% year-over-year in Q3, up from 4.3% in Q2 and above the 4.4% expected, and 1.2% from the previous quarter. Growth for the first nine months was 4.6%, against a full-year target of 4.5% to 5%. September industrial output rose 5.5%, the fastest in six months, while retail sales of goods rose only 1.1% over the nine months
• On Oct. 22, the U.S. Treasury proposed a rule expanding limits on U.S. investment in China to AI chips, hypersonics, quantum computing and biotech. On Oct. 20, the U.S. sanctioned five Chinese entities over the theft of Google's AI trade secrets
• The U.S.-China tariff truce runs until Jan. 10. Trump and Xi are scheduled to meet at the APEC summit in Shenzhen in November, and Trump said he's open to meeting Xi and Putin in China for nuclear talks
• On Oct. 20, Taiwan detected 27 Chinese military aircraft nearby, 21 of them closer to the main island. Taiwan's coast guard said China is pairing militia boats with coast guard ships east of Taiwan. Three of Taiwan's 24 U.S. arms purchases are delayed: MK-48 torpedoes, AGM-154C missiles and F-16V Block 70 jets

Americas

• Canada lost 68,000 jobs in September, its second straight monthly decline. Trade talks with the U.S. recently broke down. In a Reuters poll taken Oct. 21–23, 19 of 34 economists expect the Bank of Canada to raise rates 25 basis points to 2.50% on Oct. 28, which would be its first move in a year; futures put the chance of a hike at about 75%
• Brazil held its presidential runoff on Oct. 25 between Flávio Bolsonaro and Lula. October mid-month inflation rose 0.32%, below the 0.43% expected, but the 12-month rate reached 4.62%. The real gained 1.6% against the dollar on Oct. 23
• Mexico's annual inflation rose to 3.62% in the first half of October, above the 3.59% expected and up from 3.49% in late September. Banxico's rate is 6.50%, with its next decision on Nov. 5. Q3 GDP comes out Oct. 30
• Argentine bank shares jumped on Oct. 23 in New York, with Banco Galicia up 5.0%, Banco Macro 4.9% and YPF 3.1%. Argentina's country risk hit 675 on Oct. 19, and the peso closed at 1,518 per dollar on Oct. 16. Colombia's peso rose 0.3% to 3,187 per dollar on Oct. 23, and its central bank (policy rate 12.25%) meets Oct. 30. Chile's central bank meets Oct. 27

Russia

• On Oct. 23, the Bank of Russia held its key rate at 14% and raised its 2026 inflation forecast to 7.1–7.6%; annual inflation was 6.8% as of Oct. 19. Ukrainian drone strikes on refineries are among the causes of the high inflation. Putin agreed in principle to restart U.S.-brokered peace talks, and Russia agreed to a local ceasefire so aid can reach a stranded town in Ukraine's Kherson region, but hours later Russia launched a deadly missile and drone barrage on Kyiv

UK

• UK inflation rose to 3.5% in September from 3.1%, above the 3.4% expected and the highest since October 2025. Core inflation was 2.8%, services 3.7%, and motor fuel prices were up 29.8% from a year earlier. Producer input prices rose 8.3%, government debt passed £3 trillion, and the 10-year gilt yield closed at 5.37% on Oct. 23. Business activity grew at its fastest pace since February in October's flash PMI. Chancellor John Healey presents the Budget on Oct. 28, and the Bank of England, with Bank Rate at 3.75%, decides on Nov. 5

India

• India's inflation rose to 5.54% in September from 4.83%, the highest since October 2024, with food inflation at 7.74%; the RBI raised the repo rate 25 basis points to 5.50% on Oct. 7. The September merchandise trade deficit widened to $30.21 billion from $26.86 billion, even as exports rose 23% to $44.4 billion. India's trade deficit with China reached $106 billion in the first nine months of 2026. October's flash PMI showed business activity rising sharply while price pressures eased

Japan

• Japan's core inflation rose to 2.1% in September from 1.7%, above the Bank of Japan's 2% target for the first time since December 2025; inflation excluding fresh food and energy rose to 2.4% from 1.9%. The BOJ's policy rate is 1.25% after a September hike, a three-decade high, and its next decision is Oct. 30. The September trade deficit was about ¥540 billion, roughly three times the forecast. On Oct. 23, the yen strengthened to 156.15 per dollar and the Nikkei 225 fell 1.62%. October's flash PMI showed business activity growing solidly again while job creation slowed

Oil Prices

• WTI: $103.27 per barrel
• +1.83% WoW; +37.84% YTD; +76.53% YoY
• Brent: $116.72 per barrel
• +6.24% WoW; +48.59% YTD; +76.88% YoY

U.S. Production

• U.S. oil production amounted to 13.3 million bpd for the week ended October 16, down 0.7 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 412.5 million barrels, down (2.4%) YoY.
• Refiners operated at a capacity utilization rate of 93.4% for the week, down from 93.5% in the prior week.
• U.S. crude oil imports now amount to 6.049 million barrels per day, down (2.7%) YoY.

Gasoline

• Retail average regular gasoline prices amounted to $4.30 per gallon in the week of October 23, up 40.0% YoY.
• Gasoline prices on the East Coast amounted to $4.19, up 38.7% YoY.
• Gasoline prices in the Midwest amounted to $4.24, up 46.6% YoY.
• Gasoline prices on the Gulf Coast amounted to $3.89, up 46.4% YoY.
• Gasoline prices in the Rocky Mountain region amounted to $4.61, up 47.4% YoY.
• Gasoline prices on the West Coast amounted to $5.70, up 32.7% YoY.
• Motor gasoline inventories were down by 3.0 million barrels from the prior week.
• Motor gasoline inventories amounted to 205.3 million barrels, down (5.2%) YoY.
• Production of motor gasoline averaged 9.75 million bpd, up 1.6% YoY.
• Demand for motor gasoline amounted to 8.982 million bpd, up 6.2% YoY.

Distillates

• Distillate inventories decreased by 1.7 million in the week of October 23.
• Total distillate inventories amounted to 104.3 million barrels, down (9.7%) YoY.
• Distillate production averaged 5.232 million bpd, up 13.0% YoY.
• Demand for distillates averaged 3.732 million bpd in the week, down (3.0%) YoY.

Natural Gas

• Natural gas inventories increased by 77 billion cubic feet last week.
• Total natural gas inventories now amount to 3,644 billion cubic feet, down (4.1%) YoY.

High-yield:

High yield bond yields increased 3bps to 8.25% and spreads widened 29bps to 368bps. Leveraged loan yields decreased 2bps to 9.64% and spreads widened 12bps to 513bps. WTD high yield bond and WTD leveraged loan returns were negative 18bps and 24bps, respectively. HY spreads widened amid AI funding fears and continued fund outflows, with the seventh outflow in nine weeks. BB bonds held up while single-B and CCC bonds weakened, with CCC spreads at their widest since October 2022. Loans underperformed HY, with pressure on CCC-rated loans and telecom and transportation despite a 17th consecutive week of retail inflows.

Week ended 10/23/2026

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 10/23/2026

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 10/23/2026

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