Daily update
Daily update
- European and US inflation numbers again surprised the markets by coming in lower than expected. The ending of the 2021–22 transitory inflation was very rapid (in the US, durable goods inflation went from record high to deflation within nine months). It may be that the ending of profit-led inflation is similarly fast. This does, of course, mean that real central bank interest rates are rising more rapidly—and the full effect of past monetary tightening has yet to be felt.
- ECB President Lagarde is speaking. It seems like only yesterday that Lagarde spoke, mainly because it was only yesterday. To be fair, the topic (banking supervision) does deserve more focus. Central bank policy rests on three pillars—monetary, quantitative, and regulatory. The economic impact of regulation is not always appreciated.
- There are assorted manufacturing sentiment polls out today. A sentiment poll is not the same thing as reality. The US manufacturing ISM survey has reported the US manufacturing sector has been getting worse and worse all year. US manufacturing output has been stable all year.
- South Korean exports strengthened in November. This might seem odd when shipping companies are cutting freight sailings, but shifting production locations within Asia may explain some of that anomaly.
