Data Release Menu Today Dominated by Inflation and Industrial Production

November 10, 2022

Ahead of the U.S. October consumer price data release, the dollar had risen overnight by 0.6% against the euro and 0.3% relative to the Swiss franc and Australian dollar. But drops of 0.4% against sterling and 0.2% versus the Japanese yen and Mexican peso held the weighted DXY dollar index’s gain to 0.3%.

Ten-year sovereign debt yields show scant net movement since Wednesday’s close.

On this one-year anniversary of Bitcoin’s peak of $69,000, such has rallied from a low of 15,657 to show a 4.2% daily gain but a 76% yearly loss. West Texas Intermediate oil has dropped 0.7% in price, and gold is 0.1% softer.

In equity trading around the world, share prices dropped 1.7% in Hong Kong, 1.0% in Taiwan and Japan, 0.9% in South Korea, 0.7% in India and Spain and 0.4% in France and China. U.S. futures are up marginally after a big drop yesterday.

U.S. consumer prices rose less than expected in October: 0.4% relative to September levels and by 7.7% year-on-year, down from a 12-month advance of 8.2% registered in the prior month and the recent peak of 9.1% hit in June. 7.7% is the lowest on-year CPI inflation rate since 7.5% last January and compares to 6.2% in October 2021. Core inflation, excluding food and energy, revived to a 2-month high of 6.3%, but the monthly core increase of 0.3% was only half the 0.6% monthly rises in August and September. Energy and food posted smaller year-on-year increases of 17.6% and 10.9%. Shelter cost 6.9% more than a year earlier, while medical care costs dropped 0.6% on month.

Among other price data released today,

  • Brazilian consumer price inflation slowed 0.7 percentage points to a 19-month low of 6.5% in October, down from a 2022 peak in April of 12.1%.
  • CPI inflation in Moldova accelerated a full percentage point to 35.0%, most since at least 2007 and up from 6.8% a year earlier.
  • Czech CPI inflation settled back from September’s 345-month high of 18.0% to 15.1% in October but remained far above 2.9% in the year ending in October 2021.
  • Greek consumer prices fell 1.2% on month in October, dragging down on-year inflation to a 7-month low of 9.1%, which is still nearly triple 3.4% in October 2021.
  • In Ireland, by contrast, consumer prices jumped 1.6% on month and recorded their largest year-on-year advance (9.2%) in 38 years.
  • Danish CPI inflation edged 0.1 percentage point higher to a 479-month high of 10.1% last month.
  • Norwegian CPI inflation rose to a 420-month high of 7.5% and was accompanied by record core inflation of 5.9%. Meanwhile, producer prices dived 16.5% on month and to an 18-month year-on-year low of 19.8% from 52.4% in September and a 5-month high of 77.3% posted in August.

In central banking news, the Deputy Governor of the Reserve Bank of Australia indicated that officials are closer to a wait-and-see policy stance after having hiked the official cash rate by 275 basis points from 0.10% prior to May to 2.85% currently.

Officials at the National Bank of Serbia today announced their third straight 50-basis point interest rate hike and seventh increase since April. The rate had been 1.0% from December 2020 until tightening started earlier this year. Serbian inflation remains far above the new policy rate of 4.5%. “Opting for a gradual and calibrated tightening of monetary conditions in the domestic market, the Executive Board took into account that inflation in Serbia is still largely determined by global cost-push pressures, while core inflation (8.6% y-o-y in September), also rising in the past months on the back of higher imported inflation, still trends considerably lower than headline inflation (14% y-o-y in September).” The hopes are that progressive tightening will keep expected inflation in check and that imported inflation will recede eventually.

Europe is sinking into economic recession. Greek industrial production slumped 3.0% on month and 1.1% on year in September. Italian industrial production that same month fell 1.8% on month and 0.5% on year. Belgian industrial production bounced 7.2% in September following August’s 6.1% drop, which interrupted five straight months with year-on-year declines. Dutch factory output fell 1.8% on quarter in 3Q 2022.

Chinese Covid restraints have deprived auto sales of oxygen. On-year growth in motor vehicle sales slowed to 6.9% in October from 25.7% in September and 32.1% in August.

China monetary statistics also slowed. New yuan loans in October totaled only CNY 615 billion, down from 1.25 trillion yuan in August and the smallest monthly total in 58 months. M2 money grew 12.1% on year, the least in four months.

Turkish unemployment rebounded to a 2-month high of 10.1% in September. A peak of 14.0% was touched in August 2019.

Consumer confidence in Thailand improved to a 10-month high in October but remained weak historically.

The British Royal Institute of Chartered Surveyors’ monthly house price balance index fell sharply last month to a 26-month low.

Filipino GDP growth in 3Q of 2.9% on quarter after a 0.1% dip in 2Q and to 7.6% year-on-year surpassed analyst expectations.

Central bank interest rate policy decisions will be announced later today in Mexico and Peru. Party control of the U.S. Congress has still not been definitively determined.

Copyright 2022, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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