Macro-News round-up:

#MarketNews

  • Underlying US inflation pressures eased in October, NY Fed says: Underlying inflationary pressures in the United States have weakened in October, as reported by the New York Federal Reserve. On Thursday, New York Fed leader John Williams said “based on what I know now, my assessment is that we are at, or near, the peak level of the target range of the federal funds rate.”

    US Factory orders fell 3.6% after a downwardly revised 2.3% in September, the Commerce Department’s Census Bureau said on Monday, the biggest monthly drop since April 2020.
  • ECB hawk Schnabel scraps more rate hikes after ‘remarkable’ inflation drop: Isabel Schnabel, a European Central Bank board member, has reconsidered additional interest rate hikes in response to a significant drop in Eurozone inflation.

    Schnabel, who had insisted just a month ago that rate hikes must remain an option because the “last mile” of the inflation fight may be the toughest, said she had shifted stance after three unexpectedly benign inflation readings in a row. “The recent inflation print has given me more confidence that we will be able to come back to 2% no later than 2025.”

    Schnabel said weak growth as a result of the ECB’s rate hikes is helping the inflation fight but that a deep or prolonged recession is unlikely, with recent survey data supporting expectations for a recovery.

    Her comments come after Bundesbank Chief Joachim Nagel said the November data did not change his mind and a rate hike was still a possibility.

    “When the facts change, I change my mind. What do you do, sir?” Schnabel said in an interview, repeating a quip often attributed to John Maynard Keynes.
  • UK public inflation expectations rise in October -Citi/YouGov: The British public’s expectations for inflation over the medium-to-long term, which are closely watched by the Bank of England, rose to a five-month high in October, according to a survey published late on Monday.

    Citi trimmed its growth forecast for Britain following tax cuts announced by finance minister Jeremy Hunt last month, partly because it expected the fiscal stimulus would delay the point at which the BoE began to cut interest rates.
  • UK retailers see weak sales growth in November despite Black Friday deals: Retail sales growth in the United Kingdom has been weak in November, even with the presence of Black Friday deals.
  • Inflation in Japan’s capital slows, clouds BOJ exit path: Inflation in Japan’s capital has slowed down, potentially complicating the Bank of Japan’s plans for an exit from its ultra-loose monetary policy. PMI: Japan’s service sector has grown at the slowest pace in a year.
  • China’s Nov services activity accelerates on boost from new orders – Caixin PMI: services sector has experienced an acceleration in growth in Nov, driven by an increase in new orders.
  • South Korea’s inflation rate has eased in November, providing some relief to policymakers.

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