Daily update
Daily update
- There is a quiet data calendar. Eurozone final consumer price inflation data for October is the textbook definition of an economic non-event. The regional numbers are all out, and final consumer price data almost never changes from the initial release. Markets are also comfortable in their expectations for ECB rate cuts in the coming months.
- The Bank of England provides some diversion, with Governor Bailey and three other policy committee members pushing their way past protesting farmers to testify to a Parliamentary committee. The markets’ expectations are for a steady pace of rate reductions.
- There seems to be quite a lot of heated debate about who the next US treasury secretary should be. This is more than a political sideshow; some of the candidates seem likely to push back against consumer tax increases via tariffs. Uncertainty about the extent to which campaign rhetoric translates into policy is a key consideration for markets.
- US President-elect Trump talked of declaring a national emergency on migration, using the armed forces to arrange large-scale deportations. There are three economic considerations: the fiscal cost of arranging deportations; the supply-side constraints if selected workers are lost; and unemployment from supply-side disruption. What matters economically is whether the deportation scale differs from current policy.
