German inflation slowed to 2.8% in October

The German Federal Statistical Office confirmed on Wednesday that the country's inflation rate slowed to 2.8 percent during last October, according to final data.

Preliminary data issued by the office last month showed inflation declining on an annual basis to 2.8 percent in October, compared to 3.3 percent in September, according to Reuters.

These figures are based on the Harmonized Index of Inflation, allowing comparisons with inflation rates in other EU countries.

“Inflation in October returned to just under 3 percent,” said Ruth Brand, head of the Census Bureau.

She added: “High energy prices continued to have a major impact on the inflation rate, although the new reduction in fuel prices, which took effect in early October, likely contributed to limiting the price rise to some extent.”

On a monthly basis, overall consumer prices declined by 0.2 percent during October 2026, compared to September of the same year.

Goldman Sachs has revised its expectations for the path of US interest rates, suggesting that the Federal Reserve will raise interest rates by 25 basis points next March, after inflation data in October came in higher than expected, prompting the bank to abandon its previous estimates that the interest rate hike cycle will end in December.

Goldman Sachs thus joins Deutsche Bank, which in turn expects an additional increase in interest rates by a quarter of a percentage point in January, in addition to the two increases that are likely to occur in December and March, according to Reuters.

Inflation data released on Tuesday represented the third consecutive upward surprise; The increase in prices was higher than market expectations for the third month in a row. In this context, the entire markets are pricing in the possibility of a 25 basis point rate hike on December 9, according to the CME Group’s “Feed Watch” tool.

The rise in inflation is driven by the increase in oil prices against the backdrop of the war with Iran, the customs duties imposed by US President Donald Trump on imports, the continued strength of consumer demand, in addition to strong investments in the field of artificial intelligence.

The high cost of living also contributed to increased voter dissatisfaction, and was one of the factors that contributed to the significant losses suffered by Trump's Republican Party in the midterm elections last week.

Goldman Sachs said that raising interest rates for a third time seems more likely in March compared to January, expecting inflation to decline until the end of the year, before price pressures rise again at the beginning of the new year, as a result of renewed seasonal pressures on prices and continued rising costs.

“It is possible that the energy shock will be largely over by the March meeting, or even the January meeting,” said David Merkel, chief US economist at Goldman Sachs. “But we believe that the latest inflation readings will prompt most FOMC members to point to a third increase in interest rates in their forecast chart issued in December.”

The bank revised its expectations regarding the start of lowering interest rates, suggesting that the Federal Reserve will begin the monetary easing cycle in December 2027, that is, 3 months after its previous estimates, followed by additional cuts in March, June, and September 2028.

Aluminum prices fell on the Shanghai Stock Exchange for the second session in a row, on Wednesday, to record their lowest levels in 11 months, under pressure from the rise in the dollar and the increase in China’s exports, in addition to growing optimism about calming the conflict in the Middle East.

The most traded contract for aluminum on the Shanghai Futures Exchange fell by 2.1 percent to 22,675 yuan ($3,399.4) per ton, by 02:21 GMT, after recording earlier in the session its lowest level since mid-December last year, according to Reuters.

On the other hand, the standard aluminum price, for a period of 3 months, on the London Metal Exchange rose by 0.6 percent to $3,028.50 per ton, after recording its lowest level in 3 weeks on Tuesday.

The US dollar maintained its gains near its highest level in two weeks, supported by data that showed inflation rising more than expected, and tough statements by Federal Reserve officials, which strengthened the markets' bets on raising interest rates. The rise in the dollar increases the cost of metals denominated in the US currency for holders of other currencies.

Data released on Tuesday showed that China's exports of aluminum and its products increased by 18 percent to 5.9 million tons during the period from January to October.

Ed Meier, an analyst at Marex, said that Chinese trade data put pressure on prices, adding that it represented a “remarkable contribution to global supplies, at a time when these supplies were most needed.”

On the other hand, the decline in aluminum stocks in warehouses approved by the London Metal Exchange contributed to an increase in the premium for short-term contracts, or what is known as the “backorder” condition, compared to the standard 3-month contract.

Mir added: “Some change must happen; Either prices rise, or the price gap between contracts shrinks. It is difficult at the present time to determine which of the two trends will prevail.

On the geopolitical level, US Secretary of State Marco Rubio said on Tuesday that he informed his country’s allies in the Group of Seven countries that US economic sanctions and the naval blockade are achieving effective results, to the extent that President Donald Trump no longer needs to carry out broad military operations against Iran.

In London Metal Exchange trading, copper rose by 0.8 percent, zinc by 0.9 percent, lead by 0.5 percent, and nickel by 0.8 percent, while tin fell by 0.2 percent.

As for the Shanghai Stock Exchange, copper fell by 0.3 percent, while zinc rose by 0.2 percent, nickel fell by 0.3 percent, and tin rose by 1.7 percent.