Macroeconomy

China’s benchmark CSI 300 has fallen about 20 percent from its June peak, formally entering bear-market territory after ten consecutive weeks of declines. The Financial Times, Bloomberg and other outlets attribute the move to two main lines: a marked cooling in the artificial intelligence trade that had supported the market, and stabilisation expectations that failed to redirect capital flows. Asian equities weakened together, as regional technology sentiment and geopolitical tension combined to depress risk appetite.

China’s third-quarter economic data released on October 19, 2026 surprised markets to the upside as artificial-intelligence-related exports accelerated sharply. Manufacturing, services and external demand indicators all strengthened, with AI-related hardware and cross-border services trade emerging as the standout drivers. Analysts say the print confirms that technology upgrading is once again anchoring China’s economic trajectory, and that global demand for compute and intelligent terminals is keeping Chinese manufacturing competitive.

China’s National Bureau of Statistics released Q3 GDP data on October 19 showing 4.5 percent year-on-year growth, unchanged from Q2. Exports and industrial output supported the figure, while retail consumption and property investment continued to weigh on the headline number.

U.S. retail and industry data show that the energy-price spike triggered by the Iran war is being passed through to the retail side, with broad increases in gasoline, household goods, and food prices. U.S. households face continued consumption pressure in the weeks before the midterm elections, with some voters treating inflation and disposable-income concerns as their top voting priorities.

EU heads of state and government gathered in Brussels on October 15-16 for a two-day autumn summit focused on four major issues: the 2026-2027 long-term budget, continued aid to Ukraine, the energy price spike, and migration control. The summit failed to reach consensus on multiple major decisions, with several key questions deferred to a later meeting, highlighting deep divisions among member states on fiscal burden-sharing, energy-market intervention, and migration-responsibility allocation. At the closing press conference, European Council President Antonio Costa stressed that the EU remained united on Ukraine while acknowledging that budget negotiations and the energy relief package still required further consultation.

The Washington Post reports the September nonfarm payrolls release shows the US economy added just 29,000 jobs in September, well below market expectations and the weakest single-month print since 2021. Bond yields moved on the print, with markets now betting the Fed will accelerate rate cuts.