Upcoming U.S. CPI Sharing Spotlight with Fed & ECB Meeting Minutes
October 10, 2024
U.S. consumer price data are due in less than three hours. Analysts project a slight further dip in inflation but worry about the risk of an upside surprise.
FOMC minutes released yesterday afternoon revealed more members comfortable with a 25-basis point interest rate cut last month than realized when the majority opted instead for a bigger drop. The possibility of no rate at November’s meeting is gaining traction but remains a minority view. In any case, market participants are resigned to the likelihood that the downward path of rates over the coming half year may be more gradual than thought a few weeks ago.
Minutes from the last ECB meeting are due shortly later this morning. In contrast to the latest shift in sentiment about U.S. monetary policy, views on the ECB are gravitating toward a steepening downward path. This has helped nudge the dollar higher against the euro.
Hurricane Milton is now starting to exit Florida where over 3 million are without power. Milton has not had a significant market effect.
Aside from a 0.1% overnight dollar uptick versus the euro, the U.S. currency rose 0.3% against the yen, and 0.1% versus the loonie but fell 0.1% relative to the Swiss franc.
The 10-year British gilt yield is four basis points higher. That compares to upticks of 2 bps in the Japanese JGB yield and a basis point in German, French and Italian 10-year yields. The U.S. Treasury yield is flat on the day but up 40 basis points since the 50-bp cut of the federal funds target on September 21.
China rolled out a new mechanism to lend support to its equity market, and the Shanghai Composite index and Hong Kong’s Hang Seng gained 1.3% and 3.0% today. European share prices and U.S. futures are somewhat lower, however.
WTI oil has rebounded 1.3%, while gold and Bitcoin show minimal upticks.
While awaiting U.S. consumer price figures, investors have been treated to price data reports in several other countries this Thursday.
Japanese domestic producer prices remained flat on month during September, but their 2-month rate of increase swelled 0.2 percentage points to a 2-month high of 2.8%. That’s not far from the 3.0% -month high touched in July. Import prices slumped 2.9% on month and 2.6% on year, however.
Consumer price inflation slowed to a 44-month low of 3.0% in Hungary last month from 3.4% in August and a peak of 25.7% in January 2023. Core inflation of 4.8% was at a 7-month high, however.
Czech consumer price inflation increased 0.4 percentage points in September to a 4-month high of 2.6%, still well down from 18% two years earlier.
Danish CPI inflation of 1.3% in September was similar to August’s 1.4%. Between October 2022 and October 2023, inflation had imploded to 0.1% from 10.1%.
Norwegian CPI inflation rose to a 4-month high of 3.0% last month but was down from 7.5% in October 2022. Producer price inflation in Norway reverted to sub-zero percent territory, dropping to -2.9% from a 19-month high of 6.5% just two months earlier.
Greek CPI inflation printed at 2.9% last month, having peaked at 12.1% in mid-2022.
A 4.7% year-on-year PPI drop in August was Croatia‘s greatest rate of producer price deflation in nearly four years.
In Britain, the monthly house price measure compiled by the Royal Institute of Chartered Surveyors increased to a two-year high of +11. Such had been -16 just two months earlier and as low as -67 in the summer of 2020.
German retail sales grew 1.6% on month and 2.1% on year in August.
Italian industrial production edged up only 0.1% in August while posting a bigger-than-forecast 3.2% year-on-year decline.
Turkish industrial production sank in August by 1.6% from July’s level and 5.3% compared to a year earlier. Turkey’s jobless rate in August was 8.5%, a 3-month low and down from as high as 14.1% in early 2020.
Swedish industrial production rose 0.7% in August but fell 3.2% from a year earlier.
Copyright 2024, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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