In today’s briefing:
- EA: Inflation Nearing Local Trough
- UK: Hawkish Service Resumes
- 5 Things We Watch: BoJ, JPY & CNY, Monetary trends, UST selloff & Biden’s visit in Israel
- CX Daily: Putin and U.N. Chief to Speak at Belt and Road Forum
- Japan Watch: Time to care about the BoJ again!
EA: Inflation Nearing Local Trough
- The final EA HICP inflation print confirmed the flash of 4.34% despite upward revisions in France, Spain and (marginally) Germany. Italy provided some offsetting downside.
- Base effects are set to allow another disinflationary drop in October, with Italy’s energy utility prices driving this move. Unfortunately, inflation should rise again in the winter.
- Underlying inflation measures should continue slowing in a relatively stable trend. The median impulse remains above target but is reassuringly in the right ballpark.
UK: Hawkish Service Resumes
- UK inflation surprised again in September, this time on the upside, as the CPI rate stayed at 6.7%. It reverses the previous downside news, renewing hawkish pressures.
- A resurgence in the underlying inflationary impulse is consistent with inflation settling at about double the target amid broad-based excesses, including among services.
- The BoE MPC decision was finely balanced in September. Hawkish news since then supports our call for a Nov hike. A potential UR fall would help firm the balance.
5 Things We Watch: BoJ, JPY & CNY, Monetary trends, UST selloff & Biden’s visit in Israel
- Loads of moves to address but we’ve condensed our scope for you to catch up on the handful we dedicate marked attention
- BoJ inflation forecast and presumed policy-change. Mounting pressure on the CNY (and CNY).
- Monetary trends in USD and EUR. The continued selloff in US Treasuries. Biden’s trip to Israel.
CX Daily: Putin and U.N. Chief to Speak at Belt and Road Forum
- Belt and Road Initiative /: Putin and U.N. chief to speak at Belt and Road Forum
- Esports /Analysis: What it will take for esports to go mainstream in China
- Funds /Chart of the Day: China’s mutual fund liquidations set to hit five-year high
Japan Watch: Time to care about the BoJ again!
- Yesterday, Reuters wrote an article with a few sources hinting at another increase in the inflation forecast profile of the BoJ at the meeting concluding Oct 31.
- If this was not a deliberate trial balloon to try and push USDJPY lower from the 150 mark (we doubt that), then we ought to take this message seriously.
- The decision to increase the inflation forecast again is essentially a no-brainer conclusion given how firm inflation has been relative to forecasts, but the big question is whether it matters for the policy decision?
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