(UBS)
September retail sales rose 0.8% month over month, although the narrower control-group measure increased by a more modest 0.1%. Brent crude briefly exceeded USD 110 a barrel on Friday for the first time since May, adding to the pressure from higher borrowing costs. In Europe, elevated energy costs and fiscal concerns have contributed to higher government bond yields, but underlying activity has held up better than feared.
The coming week provides a broad test of this resilience. China will release third-quarter GDP, industrial production, and retail sales data, followed by a People’s Bank of China policy decision. UK labor market and inflation figures will help investors assess the balance between wage pressures, consumer demand, and the prospect of further Bank of England tightening. Canadian inflation data will provide a similar signal for monetary policy. Friday’s flash purchasing managers’ indices for the US, Germany, the Eurozone, and the UK should offer a timely reading on global business activity and whether higher input costs are feeding into wider price pressures.
The Chief Investment Office's base case remains for resilient, if uneven, global expansion. CIO forecasts world growth of 3.2% in 2026 and 3.4% in 2027, including Eurozone growth of 0.8% and 1.2% and Chinese growth of 4.5% and 4.6%, respectively. It believes resilient activity and strong corporate earnings will support equity returns, even as measured monetary tightening creates periods of volatility.
Investors should maintain diversified exposure across regions and sectors, combining secular growth themes with cyclical beneficiaries. CIO also continues to rate fixed income as Attractive, with higher starting yields offering income and potential diversification if growth or inflation falls short of market expectations.
Original report – Weekly Global: What to watch in the week ahead, 19 October 2026.
