There is an ample supply of important fundamental data due today, mostly surrounding inflation rates around the world.
First off, Japan published a better-than-expected balance of trade for October today. However, it disappointed the market with September machinery orders.
The United Kingdom was the first major economy to report inflation today. Its inflation and core inflation rates were both higher than expected in October, measuring at 4.2% and 3.4%, respectively.
Paired with yesterday’s positive data from the UK, these reports increase the likelihood of an interest rate hike by the Bank of England at its December monetary policy meeting.
In the eurozone, monthly and yearly inflation was in line with the forecasts, but the core inflation rate for October narrowly missed the forecast, coming in at 2%.
The fact that inflation is moving as expected, or even staying lower than expected in some regards, means that the European Central Bank is probably correct that there is no need for a rate hike anytime soon. This is weakening the euro in the long term.
Canada will be the next major economy to report on its October inflation rates, which is going to take place later today.
The United States already delivered inflation data last week, so we don’t expect much in that aspect today. Nevertheless, several important members of the Federal Reserve will give speeches today, which might provide further insight into how the regulator is feeling about inflation and interest rates.
Speaking of the Federal Reserve, United States President Joe Biden has to decide whom to nominate to serve as the next Fed Chair once the current mandate is up.
Powell is relatively well-liked but his reputation was tarnished recently due to him trading right before a market crash last year. Fed governor Lael Brainard is rumored to be Biden’s nomination instead, but we won’t know until next week what the President has decided.
At the same time, Biden is busy working out his differences with China. It is now known that the POTUS and China’s President Xi Jinping discussed being more transparent with each other regarding nuclear weaponry, as well as possibly working together against OPEC+ to bring down oil prices.
