September CPI, Canada Trade Rift and more +3

09:19 24-Oct-25

September CPI figures have been made available nine days late.  They show a 0.3% increase in the headline and +0.2% for Core, both of which are a tenth below expectations.  BLS employees were recalled to calculate this report so that cost of living figures would be available for Social Security payments.  Although such data is not compatible with the Fed's 2% inflation target, the market is likely to cheer it, and it is all the more important in light of the committee losing access to ADP data.  On that point, ADP is quoted as saying they are actively working to enhance processes for sharing data in line with its rigorous standards.

Trump also announced that all trade talks with Canada are off, in response to an Ontario advertisement quoting Ronald Reagan on the subject.  After considerable weakness the Canadian dollar had begun strengthening a bit before this development, getting as far as 71.5 American cents.  It reversed direction on the news, but both movement have been trivial so far.

This morning's most popular news seemed to be Treasury sanctions on Rosneft and Lukoil, Russia's two largest oil companies.  This got Brent to recover almost to $66, which is a significant pop from the sub-$61 level cited with Slb earnings just a week ago, but it barely manages a recovery to longer term averages.  That note also correctly predicted that Trump would NOT offer Tomahawk missiles to Ukraine yet.  In fact, he denies even backing long range strikes.  In my opinion, that's because the American midterms are still in play, and they will determine how long the short term profiteering can continue.  

I see it as no coincidence that this comes right before the election in Argentina and think Milei's foreign minister resigning ahead of that event is not a good sign.  If the result there does help turn opinion against Trump, don't be surprised if he follows the same game plan as other political figures by embracing war as a further distraction from domestic troubles.  To that point, I will be looking for evidence on whether the Fed losing ADP data is the result of White House interference or ADP doing a bit of its own profiteering; it wouldn't be the only company to taking steps to shore up its finances in the face of a potential AI product cliff.

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