Having dispensed with the October jobs report, which came in red hot and above all Wall Street estimates, yet the market seems rather unfazed by the prospect of more rate hikes, we now move on from payrolls to US inflation as the main macro focus this week, with October CPI tomorrow and PPI on Friday, alongside a busy slate of Fed speakers. As DB's Jim Reid notes, beyond the US, the key releases include China’s trade figures tomorrow, UK Q3 GDP on Thursday, and Japan’s October PPI on Thursday, while the corporate calendar includes Cisco, Applied Materials, Siemens, Allianz and SoftBank as Q3 winds down after another bumper quarter that’s been overshadowed by the recent market volatility.
Earlier this morning, data showed that China's producer inflation accelerated to its fastest pace in nearly four-and-a-half years in October, as higher global oil prices drove up manufacturing costs, even as consumer inflation softened amid weak domestic demand. Producer prices (PPI) rose 5.7% year-on-year, exceeding both September's 5.0% increase and expectations for a 5.3% gain. In contrast, consumer prices (CPI) increased 0.7% from a year earlier, slowing from 0.9% in September and coming in slightly below the consensus forecast of 0.8%. The divergent inflation trends highlight the challenges facing Beijing as it seeks to revive household consumption while maintaining momentum in the industrial sector. Although policymakers have introduced a range of measures to support spending and tackle excessive competition, a sustained recovery in consumer demand and prices remains elusive.
Going through the week ahead in more detail, in the US, tomorrow’s October CPI is the centrepiece. DB economists expect headline CPI to rise by 0.20% month-on-month, down from 0.65% previously, with core CPI also up 0.20% after 0.33% last time. <
