I. IMF Releases Latest World Economic Outlook, Upgrades Global Growth Forecast; AI Serves as Core Growth Variable

On October 13, the International Monetary Fund (IMF) updated its World Economic Outlook, slightly raising its projection for global economic growth in 2026 to 3.1%, an upward revision of 0.1 percentage points from the July forecast. Meanwhile, it estimates global growth at 3.5% in 2025 and a recovery to 3.4% in 2027. The primary driver behind this upgrade is the investment boom in AI-related infrastructure. AI capital expenditure has strongly boosted economies deeply integrated with the AI hardware industrial chain such as the United States, the Republic of Korea and Chinese Taiwan, making Asia the primary beneficiary of this AI investment dividend.
 

In a press conference, the IMF Managing Director stated that while AI is reshaping the global economic growth structure, it also issued a serious warning. Artificial intelligence is like a slowly approaching tsunami to the global labor market and national tax systems. A large number of repetitive routine jobs will be replaced by automation, and a great many low-skilled, low-wage positions will be created. In the medium to long term, this will widen income disparity and place sustained pressure on national fiscal and social security systems.
 

By economy: the growth forecast for advanced economies in 2026 was raised to 2.1%, an increase of 0.4 percentage points. Supported by resilient US consumption, fiscal spending and technology capital investment, the US economic growth rate will remain at 2.3% for both this year and next. The eurozone economy remains weak, with growth projected at only 1.1% in 2026 and a mild rebound to 1.2% in 2027, continuously weighed down by energy cost pressures and sluggish household consumer sentiment.
 

The growth forecast for emerging and developing economies in 2026 was cut to 3.7%, down 0.1 percentage points. Internal divergence has intensified. Energy exporters and economies tied to the AI supply chain show strong economic resilience. In contrast, many energy-importing developing economies are under multiple pressures: high US dollar interest rates, domestic currency depreciation, rising import costs and shrinking real household incomes.
 

The report highlights geopolitical energy risks. If shipping lanes in the Strait of Hormuz are disrupted, global GDP growth could be dragged down by up to 0.9 percentage points. Nevertheless, buffer mechanisms exist in the market, including rerouting crude oil pipelines in Gulf states, production increases by other oil-producing nations, and releases of strategic petroleum reserves by various countries, which will offset part of the impact. The IMF also reminds that total global debt remains at historically high levels. Coupled with rising long-term US Treasury yields, the external debt servicing burden of emerging markets has increased markedly, and debt risks in some low-income countries require continued vigilance.
 

II. Fed Officials Send Successive Hawkish Signals; Market Speculates on Another Rate Hike Within the Year; US Treasury Yields Hit Multi-Year Highs

The core narrative governing global asset pricing remains the direction of the Federal Reserve’s monetary policy. Multiple voting Fed policymakers have delivered a string of hawkish speeches recently, leading to continuous revisions in market expectations for the rate hike path. Cleveland Fed President Hammark stated publicly that US inflation is still far from the 2% target, and the federal funds rate needs further increases. She emphasized that early warning signs have appeared in inflation expectations. Many enterprises have raised product prices by more than the rise in raw material costs, indicating that an “inflation-entrenched mindset” is taking shape among corporations. If left unchecked, inflation will stay elevated for a long time and become difficult to cool.
 

Fed Governor Waller noted that the possibility of additional rate hikes remains, yet the pace of tightening carries flexibility, leaving room for a pause at the October FOMC meeting. Minneapolis Fed President Kashkari put forward a more aggressive view, arguing that one more rate hike is needed in 2026 and further hikes may continue into 2027. Market pricing for the duration of high interest rates keeps moving higher.
 

According to CME FedWatch interest rate futures pricing, traders assign only a 17% probability to a rate hike at the October meeting, while the probability of a 25-basis-point additional rate hike in December reaches 81%. The baseline consensus in the market is a pause in October followed by a rate hike in December. The period of high interest rates this cycle will be extended substantially.
 

The US Treasury market, the anchor for global asset pricing, has experienced sharp volatility. The 10-year US Treasury yield surged to 5.34% at one point, and the 30-year US Treasury yield touched 5.69%, both hitting their highest levels since 2002. The awarded yield at the 3-year US Treasury auction stood at 4.932%, a new high for auction yields since 2006. Rising long-end bond yields reflect market concerns over the expanding US fiscal deficit and increased bond supply, alongside sticky inflation. Long-term term premiums keep climbing, persistently compressing valuations of global risk assets and lifting the global cost of US dollar financing.
 

The domestic US real estate market has suffered severe blows from high interest rates. Data from real estate brokerage Redfin shows that pending sales of existing US homes fell by 4% month-on-month in September, sinking to the lowest level since 2014 and marking the largest decline in three years. Meanwhile, the volume of homes available for sale rebounded to the highest level since March 2020. Elevated mortgage rates have frozen secondary housing transactions. Downward pressure in the real estate sector is transmitting to household balance sheets, representing one of the biggest vulnerabilities within the US economy at present.
 

III. Policy Developments of the European Central Bank and Sveriges Riksbank; Eurozone Inflation Rebounds; French Fiscal Risks Escalate

Eurozone inflation data rebounded in September. Year-on-year CPI rose from 3.2% to 3.8%, and core inflation climbed to 2.5%, exceeding market expectations. This has reduced room for the European Central Bank (ECB) to cut rates, and market expectations for year-end easing have retreated sharply.
 

The eurozone economy presents a fragmented picture. Manufacturing PMI rose to 52.9, a four-year high, driven by orders for AI hardware and defense products. However, final household consumption demand remains weak and the recovery in the service sector lacks momentum. The economy as a whole features a split pattern: solid production and weak consumption.
 

At the European Council of Finance Ministers, the European Commission decided to launch a feasibility study on an EU-wide windfall tax on energy. Multiple member states have called for the introduction of such a tax to ease public pressure caused by spiking energy prices. At the same time, EU member states reached a provisional agreement on Capital Markets Union reform. This decade-long reform aims to dismantle financial regulatory barriers among EU nations, retain domestic capital, and reduce Europe’s reliance on US financial markets.
 

France’s fiscal and debt risks keep escalating. The 10-year French government bond yield neared 5% at one stage, and the spread between French and German 10-year bond yields widened to 159 basis points, the highest level since the eurozone debt crisis. Markets are concerned about deadlocked negotiations over France’s fiscal budget. Debt sustainability has returned to the spotlight of euro bond markets and weighs on the euro.
 

Officials from Sveriges Riksbank stated that signs of improvement have emerged in Sweden’s economy and the labor market is recovering. They did not rule out implementing a rate hike before the end of 2026, though the magnitude of any potential hike cannot be confirmed for now. Inflation has resurfaced across Nordic countries, and monetary policy maintains a prudent tightening stance.
 

IV. Commodity Markets: Crude Oil Demand Forecast Sharply Revised Downward; Geopolitical Premium Underpins Prices. Gold Sees Intense Bull-Bear Battle

In the crude oil market, OPEC Secretary General Haitham Al-Ghais announced a major downward revision to the forecast for global daily crude oil demand growth in 2026, cutting the estimate from 1.4 million barrels at the start of the year to only 400,000 barrels. This reflects weaker-than-expected recovery in global manufacturing and consumption, with medium and long-term momentum for crude oil demand growth fading. Nevertheless, short-term crude prices are supported by risk premiums stemming from geopolitical conflicts in the Middle East, and Brent crude trades in a range around USD 93 per barrel.
 

Russia announced an expansion of diesel exports and the phased removal of diesel export bans. By the end of the year, monthly diesel exports will recover to 3 million to 3.5 million tonnes. Large volumes of diesel will return to global markets and ease tightness in refined product supply. The United States and Iran are negotiating a phased agreement on navigation through the Strait of Hormuz. If a deal is reached, the geopolitical risk premium embedded in crude oil prices will be directly reduced.
 

US crude inventory data shows volatility. According to the EIA report, commercial crude oil inventories fell by an unexpected 3.2 million barrels in a single week, and refinery utilization rose to 92.7%. Demand for refined petroleum products within the US remains resilient. America’s Strategic Petroleum Reserve stays at its lowest level since 1982, leaving limited strategic buffer capacity for crude oil and providing bottom-side support for oil prices. Goldman Sachs upgraded its December target price for Brent crude to USD 90 per barrel. It pointed out that the current geopolitical risk premium built into crude prices reaches USD 22 per barrel, a recent high. Any shift in geopolitical conditions can trigger sharp swings in oil prices.
 

The gold market is currently in a classic bull-bear confrontation. On one hand, rising real yields on US Treasuries and a stronger US dollar press down gold, an interest-free asset. On the other hand, global geopolitical uncertainty, rebalancing of reserve assets by central banks worldwide, and continuous inflows of long-term allocation capital on dips underpin gold prices. Spot gold fluctuates widely at high levels and once surged above USD 4190 per ounce.
 

Position data shows global gold ETFs maintained net inflows in September, with long-term capital continuously building positions during gold price corrections. A notable change: the National Bank of Kazakhstan has shifted from a consistent gold buyer to a seller, planning to lower gold’s share of foreign exchange reserves by 3 percentage points. The deputy governor explained that surging US Treasury yields have boosted the appeal of dollar assets, and the bank is taking this opportunity to restructure foreign reserves and reduce gold holdings. This move caused temporary disturbances to gold prices, yet markets view it merely as reserve rebalancing by an individual country, which will not alter the medium-to-long-term trend of central bank gold purchases globally.
 

V. Emerging Markets and Regional Financial Trends: ASEAN Economy Remains Resilient; High Dollar Interest Rates Test Exchange Rates of Various Nations

The ASEAN+3 Macroeconomic Research Office released a regional financial stability report, forecasting that the overall economic growth rate of ASEAN+3 will hold at 4.1% in both 2026 and 2027, with mild regional inflation at 1.6% and 1.7% respectively. Bright spots for the regional economy lie in growth of AI-related exports and investment. Risk factors are concentrated in rising international energy prices, food inflation pressure brought by El Niño, plus domestic currency depreciation pressure from high US dollar interest rates.

 

Overall, Southeast Asian countries boast abundant foreign exchange reserves and controlled external leverage, showing stronger resilience against external financial shocks than other emerging markets. Still, central banks of all nations need to maintain flexible monetary policies to cope with spillover effects from Fed policy.
 

The main theme in foreign exchange markets is a resilient US Dollar Index. Backed by rising US Treasury yields and the relative strength of the US economy versus Europe, the euro faces downward pressure. The Japanese yen remains exposed to pressure from widening US-Japan interest rate differentials. Japanese government bond yields have also climbed, leaving the Bank of Japan struggling to navigate policy decisions. Volatility in the global FX market has increased, fluctuations in cross currency pairs have amplified, and corporate demand for cross-border hedging has risen markedly.
 

VI. Fintech and Global Regulatory Trends

Beyond the EU’s advancement of capital market integration reform, global stablecoin regulation continues to tighten. Multiple stablecoin-related enterprises have suspended listing plans. The industry has transitioned from rapid expansion to co
 

Central banks worldwide keep researching cross-border payment applications for Central Bank Digital Currencies (CBDCs), focusing on exploring ways to cut cross-border remittance costs and shorten settlement cycles. However, regulatory standards differ across countries, and the rollout pace of cross-border digital financial infrastructure lags earlier market expectations.
 

The United Nations Conference on Trade and Development (UNCTAD) published a report with a cautious outlook on global trade. It projects global GDP growth of 2.6% in 2026, while growth in developing economies will decline from 4.7% to 4%. Global trade growth lacks momentum, and inequality in global wealth distribution will become more pronounced.

VII. Summary of Comprehensive Institutional Judgments

The core contradiction in current global financial markets lies in the coexistence of economic resilience and sticky inflation. Supported by AI investment and fiscal spending, the US economy maintains resilience, yet inflation cools slower than expected. This forces the Fed to keep interest rates high and retain the option of another rate hike within the year. Rising long-end US Treasury yields transmit tightening effects across the globe, compressing equity valuations worldwide and lifting interest expenses for all USD-denominated debtors.
 

Clear divergence has emerged across global markets. Economies linked to the AI industrial chain benefit from technology capital expenditure, while energy importers and highly indebted emerging economies face sustained external pressure. Across asset classes: US Treasuries are the source of volatility and equity valuations are under pressure. Crude oil prices hinge on developments in geopolitical conflicts. Gold is suppressed by real interest rates in the short run, while safe-haven demand and central bank allocation demand offer support in the long term. Fiscal and debt risks in the eurozone and France represent tail risks requiring continuous monitoring. Geopolitical conflicts, energy supply conditions and national inflation data will serve as core variables driving international financial market trends going forward.