AGP Executive Report

Global Growth Risks: IMF and World Bank meetings in Thailand are set to focus on the Middle East war, energy supply disruptions and rising interest rates, which threaten an already-slowing global economy. India Outlook: Major institutions have raised India’s growth forecasts to around 7%, citing resilient demand and economic momentum. US Inflation: September CPI is expected to rise faster as gasoline prices climb, while slower core inflation may give the Federal Reserve room to hold rates steady. Trade and Agriculture: A new US-China tariff framework covers about $30 billion in goods from each country, including several farm products, but lower tariffs do not guarantee sales; whole soybeans are excluded. Global milk supply is forecast to grow 2.2% in 2026, though drought and El Niño risks could affect output. Nigeria Credit: Fitch moved the country’s outlook to positive and affirmed its B rating, citing stronger reserves, reforms and lower inflation. AI Supply Chain: Memory demand from humanoid robots is forecast to increase twentyfold by 2030, opening a potential new growth market for chipmakers Samsung and SK hynix.

Trade: The EU and China reached an interim deal that could cut Chinese electric and plug-in hybrid imports to Europe by up to 50%, while lowering tariffs on some European exports and easing rare-earth supply concerns. Nigeria: Fitch raised the country’s outlook to positive while keeping its rating at ‘B’, citing reforms and foreign reserves that climbed to $54.9 billion. AI Financing: Tech companies have issued nearly $500 billion in AI-related debt this year, despite rising borrowing costs, to fund data centres, chips and other infrastructure. Jobs: US initial jobless claims slipped to 197,000, near a 57-year low, even as September hiring slowed sharply—another sign of a low-hire, low-fire labor market. Growth Outlooks: The IMF is due to update its South Korea forecast, while economists will assess Australian jobs data and central-bank minutes for clues on the effects of higher rates.

Malaysia Outlook: Budget 2027 is forecast to support growth while narrowing the fiscal deficit to 3.3% of GDP; MBSB IB sees 4.6% growth, with fiscal discipline potentially improving investor confidence. Trade & Growth: The EU and China reached an interim trade deal covering tariffs and rare-earth supply chains, which could curb Chinese hybrid-car exports to Europe. UNCTAD sees global growth slowing to 2.6% this year amid the energy shock, while the WTO raised its trade-growth forecast to 3.9%, citing AI infrastructure demand. Energy Risks: Hurricane Isaias shut in nearly 63% of Gulf oil output, adding pressure to an already tight fuel market. Delta cut its 2026 earnings outlook as fuel costs surged despite strong travel demand. Markets Ahead: US inflation, retail-sales data and major-bank earnings are due next week, as consumer sentiment remains near a record low. India & AI: AI investment in India more than tripled to $4.1 billion in 2025, but only 23.4% of firms reported using AI, highlighting a gap between funding and business adoption.

Energy Shock: Hurricane Isaias shut in nearly 63% of Gulf oil output, tightening an already strained fuel market. Delta cut its annual profit forecast after a projected $6 billion fuel-cost surge, despite strong travel demand. Markets & Rates: Wall Street ended a record-setting week higher, but Brent crude hovered near $105 a barrel and the 10-year Treasury yield reached 5.24%, its highest level since 2002. Trade Outlook: China and the EU reached a preliminary deal to ease some tariffs and stabilize rare-earth supplies; the agreement could also curb Chinese hybrid and electric-vehicle exports to Europe. UNCTAD sees global growth slowing to 2.6% in 2026 amid the energy shock, while the WTO raised its trade-growth forecast to 3.9%, citing AI infrastructure demand. Economic Pulse: Canada lost 68,000 jobs in September, sending its dollar to an 18-month low and sharpening questions about interest rates. Agriculture: USDA’s larger-than-expected U.S. corn yield forecast sent futures sharply lower, adding pressure to grain prices.

Energy and Markets: Oil’s surge—up 61% year over year to $105.72 a barrel—has heightened inflation worries and weighed on stocks. Hurricane Isaias has also shut in 63% of Gulf oil output, adding supply risk. Airlines: Delta cut its 2026 earnings-per-share outlook to $5.10–$5.60 from $6.50–$7.50, as higher fuel costs are expected to add $6 billion to its annual bill. Jobs and Prices: Canada lost 68,000 jobs in September, its second monthly decline, while U.S. consumer sentiment fell to 46.3 and inflation expectations rose. Gold climbed to about $4,188 an ounce. Trade and Tech: The WTO raised its 2026 global merchandise trade growth forecast, citing the AI boom and stronger Asian growth. Samsung’s quarterly profit surged on AI chip demand, while TSMC reported record third-quarter revenue.

Global Trade: The WTO more than doubled its 2026 merchandise trade growth forecast to 3.9%, from 1.9%, as AI-related products drove nearly half of first-half trade growth. The gains are concentrated in Asia; global GDP is forecast to grow 2.6%. Oil and Markets: Brent surged above $105 a barrel amid Iran tensions and hurricane-related Gulf output shutdowns, reviving inflation and rate concerns. US stocks slipped, chipmakers fell 3.4% after a report questioned OpenAI’s revenue outlook, and bond yields climbed, with the 10-year above 5.35%. AI Investment: Australia’s Firmus scrapped a planned $44 billion IPO after investor demand fell short, highlighting growing scrutiny of AI infrastructure valuations. Inflation Outlook: Westpac expects New Zealand inflation to reach 4.2% by year-end as higher fuel prices and a weaker currency raise costs.

Oil and Rates: Brent crude climbed above $104 a barrel amid Middle East supply risks, while 10-year Treasury yields hovered near 5.3%. The pressure sent U.S. stocks lower for a second day and revived inflation concerns; markets expect the Fed to hold rates in October, with a possible hike in December. Jobs and Earnings: U.S. jobless claims held at 197,000, signaling layoffs remain low. PepsiCo, however, cut its full-year outlook and announced deeper cost reductions as its North American recovery drags. AI and Chips: Samsung’s record profit outlook failed to lift chip shares, as higher yields and concerns over debt-funded AI investment weighed on sentiment. TSMC, by contrast, reported record quarterly revenue that beat forecasts, underscoring strong demand for AI computing.

AI and Chips: Samsung forecast third-quarter operating profit of 107.4 trillion won, or about $80 billion, as AI demand drives memory-chip prices and sales to records. Rates and Markets: Hawkish Fed minutes signaled officials see further tightening as possible; stocks fell, Treasury yields climbed and the dollar hovered near an 18-month high. Energy and Borrowing: Brent topped $101 a barrel amid supply concerns, adding to inflation pressure. US 30-year mortgage rates rose to 7.49%, their highest since 2023. India: The RBI raised its benchmark rate to 5.5% and lifted its FY27 growth forecast to 7.1%, while warning that inflation risks could bring more hikes. Global Outlook: The IMF chief warned that energy shocks, rising debt and AI-related risks threaten growth, even as China is seen as a stabilizing force.

India Rates: The Reserve Bank of India raised its repo rate by 25 basis points to 5.5%—its first increase in nearly four years—and shifted toward calibrated tightening. It also lifted its FY27 growth forecast to 7.1%, even as higher inflation clouds the outlook. Global Outlook: The IMF chief warned that energy shocks, rising public debt and AI-related risks threaten global growth. Brent crude topped $101 a barrel amid supply concerns, adding to inflation pressure. Gold Forecast: Delegates at the LBMA conference expect gold to reach about $5,013 an ounce within a year, citing central-bank buying and sovereign-debt concerns, despite near-term pressure from high yields and inflation. U.S. Housing: Higher mortgage rates are pushing buyers to the sidelines. Cotality expects annual home-price growth to slow to about 1.3% in 2026, with prices forecast to dip month to month through winter.

AI Mega-Caps Rally: Nvidia hit a new all-time high near $243 as AI optimism and easing yield pressure lifted US stocks to fresh record closes, with the S&P 500 and Nasdaq repeatedly topping highs. Rates & Fed Watch: Traders are parsing Fed minutes after cooler inflation signals, while Mary Daly warned tariffs, oil and AI demand could keep inflation sticky. Semis in Focus: Samsung is set for a near nine-fold jump in Q3 operating profit on AI-driven memory demand, though investors worry margins may be peaking. Asia Markets Mixed: Australia’s ASX stayed flat as Wall Street gains didn’t fully translate, while Hong Kong and Taiwan both posted multi-session strength. Commodities & Food: Japan’s record rains are squeezing vegetable supply and pushing lettuce prices sharply higher; dairy futures in New Zealand point to $10-plus milk prices for multiple seasons. Macro Growth: The World Bank raised India’s FY27 growth forecast to 7.1% and flagged El Niño and oil risks. Bitcoin Narrative: Cathie Wood reiterated a $1.5M BTC target for 2030 as volatility cools, reinforcing the “digital gold” storyline. Shipping: ClarkSea Index hit an all-time high, signaling disruption-driven strength across tanker and LPG rates.

World Bank Macro Update: The World Bank lifted its East Asia and Pacific growth forecast for 2026 to 4.5%, citing stronger manufacturing and AI-linked exports; Vietnam, Malaysia and Thailand saw the biggest upgrades, while China’s outlook stays constrained by property adjustment and a soft labor market. Energy & Commodities: Oil prices eased as traders weighed easing Middle East supply worries, while in the U.S. refined-fuel markets softened and crude export flows recovered to about 90% of pre-war levels, keeping regional shipping risk in focus. AI in Markets: CXAI launched “Beat,” an agentic AI product aimed at spotting stalled work and executing approved next steps inside enterprise workflows. Tech & Connectivity Forecasts: New research reports keep stacking growth calls across mobile networks, WLAN, mobile finance, and mobile search, with multiple segments projecting double-digit expansion into 2030. Semiconductors/AI Supply Chain: TSMC-linked chatter and AI demand continue to buoy chip sentiment, while World Bank data underscores AI hardware as a key driver of regional trade. Local Economy: Sarasota’s Historic Downtown Village small-business cluster avoided demolition after a planned apartment redevelopment deal fell through. Corporate Moves: Lucid cut output to the lowest in nearly two years as it aligns production with orders and works through excess inventory.

AI & Semiconductors: ETF rebalancing tied to index changes is set to reshuffle chip flows, with Samsung weight trimmed and demand expected to tilt toward suppliers and materials; LG also locked in long-term AI data-center chiller supply for 5GW, reinforcing the “infrastructure spend” theme. Rates & Bonds: Europe’s fiscal stress is feeding a U.S. bond selloff as long-end Treasury yields push higher, while the U.S. services survey shows supply bottlenecks and price pressures staying hot—raising the odds that inflation stays sticky. UK Fiscal Outlook: EY warns UK fiscal headroom has narrowed sharply and could flip to a deficit if Middle East energy disruption persists. Crypto Bets: Standard Chartered’s Solana call targets $250 by end-2026, while analysts keep pushing Bitcoin toward new highs—though the near-term path still hinges on easing yields and sustained buying. Earnings/Companies: Pinterest appoints Amazon exec James Dibbo as CFO; Samsung Biologics is expected to beat forecasts as Plant 5 ramps. Macro/Markets: India’s bond market activity shows the turn before the RBI, while Thailand, Taiwan, and Singapore markets look poised for mild upside as crude eases. Commodities/Food: South Africa’s wheat harvest is forecast at an eight-year low, likely lifting imports; shipping and palm oil outlooks stay tight amid Middle East disruption and El Niño risks.

ASEAN+3 Outlook: AMRO lifted its 2027 growth forecast for ASEAN+3 to 4.1% on stronger AI-linked exports and investment, while keeping 2026 at 4.1%, but warned energy/logistics costs and risks like West Asia supply shocks and El Niño could still bite. US Inflation Watch: The ISM services PMI fell to 54.9 in September as supply strain pushed prices higher, keeping inflation pressure alive into next year. Energy Risk Premium: Saudi Aramco’s Amin Nasser said global oil stockpiles are “scarily thin” amid Hormuz disruption risk, warning replenishment could take years. Rates & Markets: Futures drifted lower as Europe’s debt worries hit the euro to a 17-month low and bond-market stress resurfaced; investors also eye the RBI MPC where a 25 bp hike is widely expected. Brazil Politics: Bolsonaro edged Lula in the first round and will face him in a runoff Oct. 25, with analysts expecting a rally in Brazilian assets. AI Infrastructure Theme: Navitas and Microchip pushed an 800V DC rack power reference design for AI data centers, while AMRO flagged AI demand as a key swing factor for regional growth.

US Rates & Jobs: Weak September jobs (29k added; unemployment 4.2%) cooled rate-hike bets and helped lift stocks, while the 10-year Treasury yield still sits near 5.27%—keeping markets split between “higher for longer” and a Fed pause. Brazil Politics & Markets: Flavio Bolsonaro outperformed forecasts to force a Lula runoff on Oct 25, a result seen as potentially supportive for Brazil’s currency and stocks. China Trade Pressure: China imposed a 55% tariff on additional Brazilian beef after Brazil filled its quota; EU exclusion also looms, likely reshaping where Brazilian beef sells next. AI Chip Momentum: Broadcom’s AI revenue surged (up 221% YoY) alongside strong guidance, underscoring how AI demand is still driving capex and supply commitments. UK Public Finances: UK Chancellor Healey’s fiscal headroom could be wiped out by an Iran-war drag on forecasts, raising pressure ahead of the Budget. Shipping & Steel: Container rates to the US stayed near highs as carriers manage capacity; Europe’s steel exports fell 20% with demand flat and energy costs still biting. Corporate Watch: Schneider Electric nears a ~$20B deal for PTC; Nike’s guidance and China sales slump triggered more job-cut talk. Market Theme: Investors are leaning into earnings season as the main support for a market that hasn’t sold off despite bond-market stress.

Australia Migration Debate: One Nation’s plan to cut net overseas migration by 750,000 over three years is sparking a fight with Labor, with warnings it could “trash” services versus claims it would lift living standards. Energy Affordability Shock: A new US policy impact model flags up to $920B in higher household energy spending by 2040 and $1.3T in GDP losses, as Iran-linked oil risks and rising bills bite. Rates Watch: Fed minutes and weak US jobs data are cooling rate-hike bets, while India’s RBI is widely expected to hike 0.25% in October amid West Asia-driven inflation pressure. Bond Market Stress: Rising Treasury yields are pushing up debt interest costs, with analysts pointing to a worsening fiscal squeeze as markets reprice government risk. AI/Markets: Software stocks are rebounding as investors reassess AI’s impact on SaaS, while chip optimism stays tied to forecasts from names like Micron and the broader AI build-out. IPO Sentiment: Oura’s IPO was delayed after oversubscription, and Australia’s Firmus $5B IPO is drawing valuation skepticism over an “unproven” track record. Crypto Momentum: Bitcoin holds near $85K on easing yields and seasonality; Solana and Ethereum remain range-bound pending key resistance breaks, while stablecoin flows are again raising bank-funding concerns. Healthcare/Trials: Lilly’s EloraTZP obesity combo trial results beat Zepbound in mid-stage data, adding to the race for next-gen weight-loss drugs.

US Macro & Rates: US inflation (PCE) rose less than expected in August, easing pressure on another Fed hike, while gold slid as a stronger dollar and higher Treasury yields kept bullion under pressure. Fed Watch: Markets also digested softer September jobs data (29k jobs; unemployment 4.2%), feeding debate over whether the Fed can pause in October. Oil & Diesel Supply: The IEA and G7 moved to release emergency barrels (about 325mn already out; another 100mn planned), with oil starting to fall as diesel becomes the key near-term pressure point. UK Cost of Living: Great Britain’s energy price cap is forecast to jump by £276 from January, adding to household strain. AI & Semiconductors: Micron extended its AI build-out forecast to 2031, reinforcing the memory upcycle; Synopsys’ premium valuation hinges on turning sticky design software into cash growth. Crypto & Risk Appetite: Bitcoin hovered near $85k after jobs-driven volatility, while Citi lifted its BTC target to $113k on renewed ETF inflows. Housing & Mortgages: Mortgage rates are marching toward ~8% as borrowing costs climb, while New Zealand’s election debate keeps KiwiSaver and policy trade-offs in focus. Energy Storage Demand: South Korean battery makers began US grid storage cell output as EV lines slow. Trade & Growth: Vietnam’s Q3 GDP growth hit 9.95% on exports and infrastructure, while India’s market outlook warned of October headwinds from yields, oil, and FX.