On Wednesday, October 20, inflation rates will be the primary interest of investors.
First of all, the United Kingdom published monthly and yearly inflation, as well as the core inflation rate, all three reports for September. Unfortunately, all of this data was below the forecasted levels, indicating that the UK economy moved a bit slower than anticipated last month.
This data is especially relevant at the moment, because many experts anticipate that the Bank of England will increase the national interest rate to curb inflation. But if inflation is already below expectations, this hawkish move might not come as soon as the markets had been preparing for.
The same kind of inflation data was also published by the eurozone today. Unlike the United Kingdom, all three reports from Europe met the forecasts perfectly, showing that growth is moving at a predictable pace in the EU.
Later today Canada will also publish its inflation rate (MoM and YoY, like the rest) and core inflation rate for September. The North American country has so far pleased investors with strong data, so a disappointing report will be a big surprise, if it comes to be.
As for the stock markets, today European indices are doing slightly better on account of some positive earnings, but not all Q3 reports were that great, so a flat trend is more likely.
US stock indices will also trade mostly flat today as the earnings season is also underway in the United States. Companies to report today include Verizon, IBM, and Tesla, among others.
Meanwhile, the overall sentiment in the market is improving and risk appetite among investors is growing. Safe havens like the Japanese yen are among the biggest losers; the JPY dropped to its lowest level in four years versus the US dollar.
US Treasury bonds, another risk-loving asset, are also enjoying higher yields at the moment.
The Australian, New Zealand, and Canadian dollars are also moving up today.
In other news, the United States government is closer to agreeing on its newest spending bill, albeit with major cuts applied to it. According to President Joe Biden, the cuts will most likely mean there will be no tuition-free community college, as was the original plan.
