Daily update
Daily update
- US September consumer price data signaled disinflationary trends. Food prices have disproportionate political importance, but around 40% of the monthly increase in food prices was due to eggs. Can an election be swayed by an egg? Some key states saw food prices fall compared to August. Voters remember price levels, and tend to have an idea of a “fair” price for food items that would have been fixed in their minds many months ago. The political impact of this price report is probably marginal.
- The Federal Reserve is very unlikely to change its policy path after this data—and several Fed officials said as much overnight. There is producer price information due out today which should also show disinflationary tendencies.
- The UK ‘s August monthly GDP is (to put it charitably) a volatile series that is hard to predict. Manufacturing and services output are also due. None of this is likely to move the Bank of England from its measured pace of rate cutting, and investors are more focused on the government’s forthcoming budget.
- The Bank of Korea cut rates, as expected, in response to inflation stabilization. Economists will be giving up their weekends to look at China’s press conference from the economy ministry, hoping for fiscal stimulus.
