Aren't We Overreacting?

The US headline inflation fell to 7.7% in October, versus 8.0% expected by analysts and from 8.2% printed a month earlier. It is a fairly nice easing. And more importantly, core inflation fell more than expected as well, printing 6.3% versus 6.5% expected, and 6.6% of last month. Plus, there are hints that both headline […]

British Pound Extends Rally

The British pound has extended its gains today, following a huge Thursday. In the European session, GBP/USD is trading at 1.1729, up 0.15%. US dollar crashes after soft inflation report The US dollar was in full retreat on Thursday, after the October inflation report indicated that inflation had fallen more than expected. Headline CPI dropped […]

Yen Extends Rally as Japan's PPI Eases

The Japanese yen is taking a breather after posting huge gains on Thursday. In the European session, USD/JPY is trading at 140.30, down 0.45%. Japan’s PPI declines  The week wrapped up with a key inflation release. Japan’s Producer Price Index slowed to 9.1% in October, down from 10.2% in September. Still, this was above the […]

What Just Happened With the Dollar?

Yesterday, the US reported headline and core CPI figures well below expectations. Stock markets around the world jumped, and the dollar got weaker as yields fell. The market cut its outlook for rate hikes. Commodities also got a boost. Is this the start of a new trend, or will the move fade? Let’s take a […]

UK Economy Softer Landing and More Solid Pound

The pound rally gained new momentum on Friday morning, following a respite after the 3% rise in GBPUSD on Thursday. The British currency was supported predominantly by better-than-expected economic data and comments from the Governor of the Bank of England on the intention for further rate hikes. The UK economy contracted by 0.2% in the […]

The Great Deceleration

Equity markets are on course to end the week on a positive after Thursday’s US inflation report gave hope that the great deceleration is well underway. That inflation report has been some time coming and investors breathed an enormous sigh of relief in response. The reaction to the number looks a little extreme, overdone even, […]

Canadian Inflation to Lead a Flurry of Data Releases Next Week

Consumer price growth in Canada likely ticked higher in October. We expect the annual rate to have risen to 7%, up from 6.9% in September but still down from the 8.1% recent peak in June. Driving the increase was a resurgence in gas and fuel oil prices. These prices, declining for months, had been the […]

The Weekly Bottom Line: Markets Cheer Inflation Easing a Touch

U.S. Highlights Republicans look to have won control of the House in this week’s midterm elections. The Senate race remains too close to call. With Washington more divided, major spending and tax changes are less likely, while some risks increase (i.e., the potential for a government shutdown). CPI inflation eased in October, with headline CPI […]

Weekly Economic & Financial Commentary: October Prices Give Fed Ability to Slow Pace of Rate Hikes

Summary United States: October Prices Give Fed Ability to Slow Pace of Rate Hikes Relief in October inflation gives the FOMC the ability to slow the pace of rate hikes ahead. But make no mistake, the Fed’s job of taming inflation remains far from over. We still expect it to raise the federal funds rate […]

Weekly Focus

The central bank ‘pivot’ narrative got a boost from US CPI inflation surprising on the downside, falling back to 7.7% in October amid easing core inflation pressures. Terminal rate expectations declined and markets are now pricing only a 50bp Fed hike in December, challenging our call of a 75bp increase. Equity markets rallied on the […]