Basically the same mantra that they have been repeating for many a time now but there is at least some acknowledgment that inflation may "surprise" them. We'll see how things go in the months ahead but I reckon we'll be headed towards a more challenging test of their patience/resolve rather than the other way around.- As such, it is tough to really get a handle on what may come next for the pair unless there is a clear catalyst either from a technical break or until the bond market makes up its mind. I'd argue the latter needs to come first but we'll see.
- In response, money markets have now priced in two rate hikes by the BOE in 2022 with short sterling futures pricing in the highest rate expectations for a BOE move in the year ahead since March 2020.
- Looks like Javid still is having a hard time letting go of his finance minister post (held that for less than a year until February last year), as he is still remarking on inflation even as health minister currently.
- The fact that supply chain disruptions and bottlenecks are to persist well into 2022 makes the case for high inflation to stay the course for many more months to come at least.
- The overall market mood looks to still be undecided as traders and investors weigh up the Fed taper timeline, ongoing China worries, and some anticipation ahead of the quadruple witching period on Friday later in the week.
- The preliminary report can be found here. No change to initial estimates as this reaffirms more robust inflation pressures in the French economy last month, keeping with the trend seen elsewhere across the region.
- However, when you look at the monthly readings, there's also a jump of 0.7% in consumer inflation from July to August (both on the main and core readings) so that tells the story that the jump isn't entirely due to base effects.
- This comes off the back of more subdued sentiment in Asia, with the Nikkei closing down 0.5% after a strong start to the week. Meanwhile, the Hang Seng is down 1.5% and Shanghai Composite down 0.2% as China woes continue to linger.
- That's quite the jump on UK consumer inflation, beating estimates to its highest since January 2018. This will continue to heap pressure on the BOE to move away from their 'transitory' narrative and perhaps tighten policy sooner rather than later.
- It's a quieter start to the session as the market looks to digest further the implications of the US CPI report yesterday, although I would argue that it is a rather straightforward one.
- Policymakers will be hoping for a sweet spot in inflation and labour market data, one which reaffirms the need to begin tapering by year-end but one that is still 'transitory' with regards to the latter so as to not compel them to raise rates as soon as next year.
New Zealand was all set to become one of the first major central banks to embark on a hiking cycle as the economy began to run hot. Moving into the RBNZ meeting last month the expectations were that the RBNZ were going to hike rates. Unemployment was at a low (4.0%), inflation high (3.3% y/y), tapering had stopped on July 23 and the largest investment banks in the regions were predicting three hikes before year end. However, it was the resurgence of COVID-19 that seemed to hold the central bank back at the latest central bank meeting. A single case of COVID-19 was found and this sent the nation into an entire lockdown. However, immediately after the decision Governor Orr said that COVID cases alone will not stop a rate hike and needs to move on policy and cannot wait for uncertainty to lift. RBNZ's Hawkesby later reinforced this view at the end of August when he said week that the RBNZ considered raising the official cash rate by 50 bps at the last meeting.
COVID-19 under...
- Geopolitics is back on the menu and will slowly grow in focus as the pandemic subsides globally. It will be interesting to see how US-North Korea relations fare moving forward after all of the puppet show over the last few years is now put behind us.
- US consumer inflation was not as hot as estimated in August and that saw the dollar retreat initially with stocks rising but most of that reversed before the end of the day as the market has second thoughts in running with the 'transitory' narrative.
- RT @VandaInsights: What does #China's new policy of selling #crude from SPR mean for the #oil markets? Read @VandanaHari_SG's quick views i…
ForexLive Wed 15 Sep 2021 03:54 - Multiple people familiar with the matter, however, say that the project was halted after less than six months and that the Taiwanese company has since shifted its focus to other ongoing EV projects, such as a joint venture with Thai oil and gas company PTT.
Industrial production and investment for the month also missed, but its the consumer/domestic sector, as reflected in the retail sales miss, that is the concern in these data. Officials cited the renewed COVID-19 outbreaks and also widespread flooding for the miss. And, they have a point. I think the bigger takeaway is that other economies around the globe are seeing similar (outbreaks and weather events - Germany floods for example) and perhaps there is a bigger picture impact than just in China.
Stockmarkets in China had been slumping prior to the data release and they are posting losses as I update:
- Overwhelmed by a surge in COVID-19 patientsAlaska's largest hospital ... prioritizing resources and treatments to those patients who have the potential to benefit the most."While we are doing our utmost, we are no longer able to provide the standard of care to each and every patient who needs our help" "The acuity and number of patients now exceeds our resources and our ability to staff beds with skilled caregivers, like nurses and respiratory therapists. We have been forced within our hospital to implement crisis standards of care"
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