Weekly Market Recap (09-13 October)

<p>Monday:</p><p>Over the weekend
Hamas launched a massive attack against Israel from Gaza which led to Israel to
declare war against Hamas and invoking Article 40 Aleph for the first time
since October 1973. The first reaction in the markets at the open was of risk
aversion with equities lower, bonds higher, safe haven currencies higher and
gold and crude oil higher. Most of the moves were faded soon after as the
conflict is unlikely to change much the big picture as long as it doesn’t
escalate to other Arab countries joining Hamas. </p><p>ECB’s Kazaks (hawk
– voter), as other ECB members, is leaning towards a pause:</p><ul><li>The phase of rapid
rate hikes is already behind us.</li><li>Can currently count
on the fact that we may pause.</li><li>So, any future rate
hikes would be relatively small.</li></ul><p>ECB’s de Guindos
(dove – voter) sees the current level of rates enough to bring inflation back
to target:</p><ul><li>Inflation to fall in
the coming months.</li><li>But urges caution
due to evolution of oil prices.</li><li>Expects current
level of interest rates to contribute to price stabilisation.</li></ul><p>Fed’s Logan (hawk
– voter), as other FOMC members, highlighted the rise in long-term yields as
something that could do the job for the Fed without requiring additional rate
hikes:</p><ul><li>Continued
restrictive financial conditions will be necessary to bring down
inflation.</li><li>In setting policy
rate, Fed must take account of financial conditions, which have tightened
substantially in recent months.</li><li>If higher long-term
rates are due to higher term premiums, there may be less need for Fed to
raise rates.</li><li>Higher term premiums
have clear role in higher long-term rates, uncertain how big.</li><li>To the extent a
stronger economy is behind rising long-term rates, Fed may need to do
more.</li><li>Attentive to wrists
on both sides of Fed's mandate. High inflation is the most important risk.</li><li>Progress on
inflation encouraging but too early to be confident it is heading to Fed's
2% target in a sustainable, timely way.</li><li>Labor market is
still very strong, wage is still solid.</li><li>Output and spending
have been surprisingly strong, outlooks for consumer are mixed.</li><li>There is a lot of
uncertainty over the trade-off with the unemployment rate.</li><li>It is important to
stay focused on restoring price stability.</li><li>The China slowdown
is something to watch.</li><li>Surprising strength
of the economy creates risk for inflation. We have more work to do.</li><li>Quite a bit of room
for Fed balance sheet run off.</li><li>Financial conditions
tightening has been rapid but orderly.</li><li>She has been
thinking about how to square overall economy with Fed tightening so far.</li><li>Tends to think that
monetary policy lags are shorter than others.</li><li>The bulk of economy
is adjusting more quickly to monetary policy.</li><li>Fed's focus and mine
is the 2% inflation target.</li><li>Looking at financial
markets and performance of economy, the long-term neutral rate may be
higher.</li><li>Have seen tightening
of bank lending standards, similar to what we expect and intend with
policy tightening.</li></ul><p>Fed’s Jefferson (neutral
– voter) sounds cautious as the uncertainty around the economic outlook remains
very high but leans towards a higher for longer stance:</p><ul><li>We need to move
carefully to balance the risks of tightening too much or too little.</li><li>May be too soon to
say confidently we have tightened enough.</li><li>Mindful of lag
effects of past rates as I consider whether we will need further policy
tightening.</li><li>Rising long-term
yields in the past may have meant investors seek stronger economic
momentum and need for higher for longer Fed rate path.</li><li>Mindful that changes
in real yields can arise from changes of investors view of risk,
uncertainty.</li><li>Will keep higher
bond yields in mind in assessing future rate path.</li><li>Recent inflation
data encouraging, but inflation still too high.</li><li>Core PCE prices will
moderate further as labour market comes into better balance.</li><li>Labor market remains
tight, but labour demand is falling. Supply is
improving.</li><li>There is a path to
restoring price stability without a large gain in unemployment.</li><li>Expect further
gradual easing of labour market conditions.</li><li>I am particularly
attentive to upside inflation risks from a strong economy, labour market,
energy prices.</li><li>Downside risks to
economic activity include slowdown in China, and Europe.</li><li>It could be the case that rise in the long-run treasury yields reflects
anticipation for strong growth.</li><li>Current policy is restrictive.</li><li>Finding the right stance of policy is my concern.</li><li>As a policymaker I’m mindful cumulative effects of past rate increases has
NOT been felt.</li><li>We need to do our work to bring the inflation rate down before we can
assess what long-run R-star is.</li><li>Cannot say if rate cuts might be needed next year yet.</li><li>Our objective is for balance sheet policy to work in harmony with policy
rate, but it depends on what is happening in the economy.</li><li>Need to be nimble with regard to what is happening in the economy.</li><li>Employment growth is a good thing.</li><li>We just want job
growth to be consistent with path of inflation toward 2%.</li></ul><p>BoE’s Mann (hawk – voter)
stresses the risk of inflation expectations de-anchoring if inflation stays
high for too long, which would require eventually an even more aggressive
tightening and a worse recession:</p><ul><li>Says wage and price
inflation are sticky downwards.</li><li>Going forward the length
of time inflation remains above target will be important given that
inflation expectations tend to drift.</li><li>Possible drift in
expectations implies that policy has to be more aggressive.</li><li>The longer inflation
remains above target the more aggressive central bankers need to be in
reacting to it.</li><li>Policymakers need to
address not just high inflation today but the risk of rising expectations
in the future.</li><li>Policy has to be
more aggressive because it has to address both a drift in expectations as
well as the actual inflation.</li><li>From a risk
management perspective, I am more concerned about this embeddedness, the
duration, the expectations.</li></ul><p>Tuesday:</p><p>ECB’s Villeroy (neutral –
voter) continues to think that additional rate hikes are unlikely:</p><ul><li>At this stage,
further rate hikes are not the right thing to do.</li><li>Interest rates are
on a good level.</li><li>Events in Israel add to economic incertitude.</li><li>Wary about oil price
developments over Israel situation.</li></ul><p>Kyodo News reported that the BoJ is mulling raising FY 2023/24 Core CPI
target to 3.00% vs. 2.5% forecast in July. This is a signal that they do see
high core inflation persisting, but they keep on highlighting that wage growth
is what is needed for them to achieve their inflation target in a sustainable
way. </p><p>Bloomberg reported
that China is weighing new stimulus and higher deficit for spending on
infrastructure to meet the growth target and bolster the economy. </p><p>The US September
NFIB Small Business Optimism Index came in lower than expected at 90.8 vs. 91.0
expected and 91.3 prior. </p><p>Details:</p><ul><li>Plan
to Hire 18 vs. 17 prior.</li><li>Higher
selling prices 29 vs. 27 prior.</li><li>Positions
not able to fill 43 vs. 40 prior.</li><li>Net
compensation plans 23 vs. 26 prior.</li></ul><p>Fed’s Bostic (dove
– non voter) doesn't see the need for additional rate hikes:</p><ul><li>Inflation has
improved considerably, still a long way to go.</li><li>We're in a good
place for us to get to 2% inflation.</li><li>There's certainly
more for us to do.</li><li>I don't have a
recession in my dot plot.</li><li>We don't have to
increase rates any further.</li><li>If things come in
differently from my outlook, we might have to increase rates but that's
not my current outlook.</li></ul><p>Below the results
from the NY Fed Consumer Inflation Expectations survey:</p><ul><li>Year-ahead inflation
3.7% vs. 3.6% prior.</li><li>Three-year inflation
3.0% vs. 2.8% prior.</li><li>Five-year inflation
2.8% vs. 3.0% prior.</li><li>Median home price
rise 3.0% vs. 3.1% prior.</li><li>Credit access
perceptions weakened in September.</li></ul><p>Fed’s Kashkari
(hawk – voter) is another member highlighting the rise in long term yields and
how that is likely to do the job for the Fed:</p><ul><li>Inflation is headed
down.</li><li>I'm optimistic we
can shrink the Fed's balance sheet back to pre-crisis trend line.</li><li>We are seeing higher
long-term Treasury yields but not higher inflation.</li><li>Reason for rise now
in 10-year yield is a bit perplexing; one story is it is higher growth
expectations.</li><li>It's possible that
higher bond yields could leave less for the Fed to do.</li><li>If higher long-term
yields are due to expectations about Fed actions, we may need to deliver.</li><li>We will need to look
at wage and inflation data for me to get comfortable we've done enough.</li></ul><p>Fed’s Daly
(neutral – non voter), as the other FOMC members, acknowledged that the higher
long term yields could be the equivalent of another rate hike and thus be the
reason for another pause at the November FOMC meeting:</p><ul><li>Decline in goods
inflation has been an easy win, and not largely due to the Fed's rate
hikes.</li><li>Just starting to see
improvement in non-housing services inflation, need more of it.</li><li>We have more work to
do, inflation is still high.</li><li>Fed policy is
helping supply and demand get into a better balance.</li><li>In future could see
the nominal neutral rate go to 2.5%-3.0%.</li><li>The new normal may
be a little different, but probably won't be a gigantic reset.</li><li>I don't manage
markets, I watch them for information.</li><li>If bond yields are
tight, that could be the equivalent of another rate hike.</li><li>The risks to the
economy are more balanced.</li><li>We need to get
inflation down to fully balance the economy.</li></ul><p>Wednesday:</p><p>RBA’s Kent highlights
the slowdown in growth and inflation due to restrictive monetary policy and
that the lags mean that further effects will be felt in the near future:</p><ul><li>Monetary policy is
slowing the growth of demand, inflation.</li><li>Policy lags mean
some further effects of past rate hikes are still to be felt through the
economy.</li><li>Repeats that some
further tightening of policy may be required to ensure inflation slows.</li><li>The effect of slower
demand growth on inflation is now building.</li><li>Hearing in liaison
that a range of retailers discounting in the face of weak consumer
spending.</li><li>Mortgage payments
are at a record share of household disposable income, will rise further.</li><li>The rise in interest
rates has also increased incentives to save.</li><li>Board is paying
close attention to economic developments here and overseas.</li><li>Have the opportunity
to see how economy reacts to past hikes.</li><li>No current plans to
step up the pace of bond holdings.</li><li>If we were to sell
bonds, would do it in a way that would not disturb markets.</li><li>There are pockets of
fast wage growth but contained in aggregate.</li><li>The CPI data will be
important, but it is not the only consideration for policy.</li></ul><p>Fed’s Bowman (hawk
– voter) continues to support another rate hike as she doesn’t like the
tightness in the labour market: </p><ul><li>Interest rates may
need to rise further.</li><li>Inflation remains
well above the FOMC's 2% target.</li><li>Job market remains tight.</li><li>This suggests policy
rate may need to rise further.</li><li>And stay restrictive
for some time to return inflation back to target goal.</li></ul><p>ECB’s Knot (hawk –
voter) is comfortable with the current level of rates but stands ready to
adjust if the disinflationary process stalls:</p><ul><li>Policy is in a good
place now.</li><li>Inflation is still
too high.</li><li>But effects of
inflation shock are waning.</li><li>Economic cooldown
desirable to tame inflation.</li><li>Restrictive policy
will be needed for some time.</li><li>Stands ready to adjust
rates further if disinflation process stalls.</li></ul><p>ECB’s de Cos (dove
– non voter) is on the higher for longer camp:</p><ul><li>Core inflation has
turned a corner.</li><li>More confident that
inflation trajectory might lead us to 2% target.</li><li>If rates are maintained
for a sufficiently long period, we could get there.</li><li>Market has
understood very well our communication.</li><li>Growth risks skewed
to the downside.</li><li>It is premature to
discuss rate cuts.</li></ul><p>The September US
PPI beat expectations across the board: </p><ul><li>PPI Y/Y 2.2% vs. 1.6% expected and 2.0% prior (revised from 1.6%).</li><li>PPI M/M 0.5% vs. 0.3% expected and 0.7% prior.</li><li>Core PPI Y/Y 2.7% vs. 2.3% expected and 2.5% prior (revised from 2.2%).</li><li>Core PPI M/M 0.3% vs. 0.2% expected and 0.2% prior.</li></ul><p>Fed’s Waller (hawk –
voter) is another member citing higher yields as a reason to hold rates steady
at the November meeting:</p><ul><li>We will see how
higher long-term rates feed into Fed policy.</li><li>The real side of the
economy is doing well.</li><li>If current trends
continue, inflation will basically be back to target.</li><li>Fed can watch and
see what happens on rates.</li><li>Clearly, issuance
has to have an impact on yields.</li><li>When the deficit is
6% with low unemployment, it's unsustainable.</li><li>Now, once again,
financial markets are tightening up. They're going to do some of the work
for us.</li></ul><p>ECB’s Kazaks (hawk –
voter) didn’t add much to his prior comments as he leans towards a pause:</p><ul><li>The door on rate
hikes cannot be closed.</li><li>Interest rates are
currently appropriate to get inflation to 2% in H2 2025 but door on rate
hikes can't be closed.</li><li>Talks on mandatory
higher reserve requirements for banks are appropriate.</li><li>Italian spreads not
unwarranted and not worrisome.</li></ul><p>The Fed released the FOMC
Minutes of its September Monetary Policy Meeting:</p><ul><li>Participants judged
that risks had become more two-sided.</li><li>Many participants
saw downside risks to economic activity and upside risks to the
unemployment rate.</li><li>Vast majority of
participants judged future path of economy as highly uncertain.</li><li>More evidence needed
to be confident price pressures ebbing.</li><li>Several participants
commented that, with the policy rate likely at or near its peak, the focus
of monetary policy decisions and communications should shift from how high
to raise the policy rate to how long to hold the policy rate at
restrictive levels.</li><li>Participants
stressed that current inflation remained unacceptably high while
acknowledging that it had moderated somewhat over the past year.</li><li>All participants
agreed that policy should remain restrictive for some time until the
Committee is confident that inflation is moving down sustainably toward
its objective.</li><li>Several participants
noted that the process of balance sheet runoff could continue for some
time, even after the Committee begins to reduce the target range for the
federal funds rate.</li><li>The economic
forecast prepared by the staff for the September FOMC meeting was stronger
than the July projection, as consumer and business spending appeared to be
more resilient to tight financial conditions than previously expected.</li><li>The staff assumed
that GDP growth for the rest of this year would be damped a bit by the
autoworkers' strike, with these effects unwound by a small boost to GDP
growth next year. The size and timing of these effects were highly
uncertain.</li></ul><p>Fed’s Collins (neutral –
non voter) is leaning towards another pause in November and besides cooler core
inflation wants also to see a softer labour market:</p><ul><li>Fed is at or near
peak of rate hike cycle.</li><li>Further rate hike
could be warranted depending on incoming data.</li><li>Expects Fed to keep
policy restrictive for some time.</li><li>Policy must stay
restrictive until clear sign inflation moves to target of 2%.</li><li>Optimistic inflation
can be tamed with ‘orderly slowdown,’ small jobless rise.</li><li>Policy patience will
give Fed time to get read on economy.</li><li>Main uncertainty is
measuring impact of past Fed actions.</li><li>Fed faces challenges
in extracting signal from economic data.</li><li>Cooler core
inflation will need softer labour market.</li><li>Too soon to say core
inflation on trend for 2%.</li><li>Chance of a soft
landing has gotten higher for economy.</li><li>As savings dwindle,
economy becoming more responsive to rate policy.</li><li>Federal Reserve will
factor in 'unrest in the Middle East'.</li><li>Economy has yet to
feel the full impact of FOMC rate hike cycle.</li><li>Sees no reason to
change the Fed's inflation target.</li></ul><p>RBNZ Governor Orr just
stated the obvious and keeps supporting the central bank’s “wait and see”
stance:</p><ul><li>Official Cash Rate
(OCR) from 2% to 5.5% was the most rapid increase in the Reserve Bank’s
history. The effects of this are flowing through as anticipated to our
economy.</li><li>OCR will need to
stay at restrictive levels for the foreseeable future to ensure annual
consumer price inflation returns to our 1% to 3% target range, while
supporting maximum sustainable employment.</li></ul><p>Thursday:</p><p>ECB’s Vujcic (hawk –
voter) is comfortable with the current level of interest rates and seems
inclined to wait at least until early 2024 before deciding on what to do next:</p><ul><li>Too soon to declare
victory over inflation.</li><li>Early 2024 data will
bring more clarity on wages, which will provide officials with an improved
but not necessarily definitive view of consumer price inflation.</li><li>I wouldn’t think
that December is when we will be able to say mission accomplished, we have
to be more patient.</li><li>More interesting for
me will be to see how the data come in in spring of next year, when we’ll
have more clarity on labour-market pressures, and particularly wage-growth
developments.</li></ul><p>The Japanese September
PPI missed expectations:</p><ul><li>PPI Y/Y 2.0% vs. 2.3%
expected and 3.2% prior.</li><li>PPI M/M -0.3% vs. 0.1%
expected and 0.3% prior. </li></ul><p>BoJ’s Noguchi, as other
BoJ members, is focusing on wage growth as a crucial factor to exit their easy
monetary policy:</p><ul><li>Biggest focus is
whether wage hike momentum will be maintained or not.</li><li>Raising of YCC
allowance band does not signify a tightening of monetary policy.</li><li>If central banks hold
rate hikes and inflation comes down, the risk of hard landing will be
reduced.</li><li>Japan's economy is
recovering gradually.</li><li>When inflation
expectations are in a stage of rising, some flexibility is needed to
continue easy policy under YCC.</li><li>Chinese economy
facing risk of deflation or 'Japanisation'.</li></ul><ul><li>Need to pay close
attention to fiscal, monetary policy response to low inflation by Chinese
authorities from now on.</li><li>There are signs of
upward price pressures coming down.</li><li>BOJ's near-term
mission is to realise a situation where wage growth does not fall short of
inflation as soon as possible through persistent monetary easing.</li><li>The trend of passing
on costs for raw materials is widely continuing.</li><li>Japan needs to shake
off the 'zero norm' of prices and wages in order for nominal wage increase
to exceed 2% as a trend.</li><li>3% nominal wage
growth would correspond with 2％ inflation target.</li><li>We have no choice
but to raise inflation forecast for fiscal year 2023.</li><li>Inflation of this
extent was unexpected.</li><li>Growth rates and
inflation both deviating upwardly.</li><li>But inflation
expectation does not factor in achievement of 2% inflation target.</li></ul><p>The UK August Monthly GDP
comes in line with expectations:</p><ul><li>GDP M/M 0.2% vs.
0.2% expected and -0.6% prior (revised from -0.5%).</li><li>GDP Y/Y 0.5% vs.
0.5% expected and 0.3% prior (revised from 0.0%).</li></ul><p>ECB’s Stournaras (dove –
non voter) would like to see bond buying continue to keep flexibility around
these uncertain times:</p><ul><li>Should not stop bond
buying too early.</li><li>No value in bringing
forward end of PEPP.</li><li>Now especially that
there is new uncertainty from events in Israel and Palestine.</li><li>Need to keep
flexibility and act if necessary.</li></ul><p>ECB’s Villeroy (hawk –
voter) is just another member in favour of a higher for longer stance from now
on:</p><ul><li>Current level of
interest rates is appropriate.</li><li>Patience is more
important than activism at present.</li><li>Duration is more
important than level of interest rates.</li></ul><p>BoE’s Pill (neutral –
voter) is leaning on the higher for longer stance:</p><ul><li>It is a finely
balanced issue if we still have to do more on rates.</li><li>UK inflation remains
too high.</li><li>A lot of policy
tightening has yet to come through.</li></ul><p>The ECB released the
Monetary Policy Accounts of its September meeting:</p><ul><li>Solid majority expressed support for 25 bps rate hike in September.</li><li>Emphasis was also paced on upward revisions to headline inflation
projections.</li><li>A pause would have given rise to speculation that tightening cycle was over.</li><li>Not hiking could also send a signal of ECB being more concerned about the
economy than inflation.</li><li>Deposit facility rate around 3.75% to 4.00%, as long as it was understood
as being maintained for a sufficiently long duration, should be consistent to
return inflation to target.</li><li>Decision between rate hike and pausing was a close call but tactical
considerations played a role as well.</li></ul><p>The US CPI beat
expectations on the headline figures, but the core measures were in line with
forecasts:</p><ul><li>CPI Y/Y 3.7% vs.
3.6% expected and 3.7% prior. </li><li>CPI M/M 0.4% vs.
0.3% expected and 0.6% prior.</li><li>Core CPI Y/Y 4.1%
vs. 4.1% expected and 4.3% prior.</li><li>Core CPI M/M 0.3%
vs. 0.3% expected and 0.3% prior. </li><li>Core Services
ex-Housing M/M 0.6% vs. 0.5% prior.</li><li>Real weekly earnings
-0.2% vs. -0.1% prior.</li></ul><p>The US Initial Claims
beat expectations once again, but Continuing Claims missed:</p><ul><li>Initial Claims 209K vs. 210K expected and 209K prior (revised from 207K).</li><li>Continuing Claims 1702K vs. 1680K expected and 1672K prior (revised from 1664K).</li></ul><p>Fed’s Collins (neutral –
non voter) repeats that the rise in bond yields is likely to translate in
another pause at the November FOMC meeting as the Fed wants to see even more
data before proceeding with another rate hike:</p><ul><li>Fed is at or near
the peak in rate hiking cycle.</li><li>Too soon to take
prospect of additional hike off the table.</li><li>Bond yield rise
likely reduces need for near-term Fed hike.</li><li>Latest CPI
underscores uneven progress towards 2%.</li><li>Current monetary
policy phase calls for patience.</li><li>Too soon to say
inflation on sustainable path towards 2%.</li><li>Sees only limited
progress on lower core services ex-housing inflation.</li><li>Sees evidence the
labour market is rebalancing.</li><li>Resilient economy is
why rates will need to say higher for longer.</li><li>Is carefully
watching commercial real estate, not seeing major trouble so far.</li><li>Fed has not decided
whether it will extend life of bank term funding program.</li></ul><p>Friday:</p><p>A U.N. spokesman said that Israel’s military on Friday directed the evacuation of northern Gaza within 24 hours. This might be a signal of an impending ground offensive, although Israeli military has not yet confirmed the appeal.</p><p>The New Zealand
Manufacturing PMI fell further into contraction:</p><ul><li>45.3 vs. 46.1 prior.</li></ul><p>The Chinese Inflation
data missed expectations across the board:</p><ul><li>CPI Y/Y 0.0% vs. 0.2%
expected and 0.1% prior.</li><li>CPI M/M 0.2% vs. 0.3%
expected and 0.3% prior.</li><li>PPI Y/Y -2.5% vs. -2.4%
expected and -3.0% prior. </li></ul><p>The Chinese trade data
was better than the previous figures, but still in negative territory:</p><ul><li>Exports Y/Y -6.2% vs.
-7.6% expected and -8.8% prior.</li><li>Imports Y/Y -6.2% vs.
-6.0% expected and -7.3% prior.</li></ul><p>BoE’s Bailey (neutral –
voter) highlights the division among the MPC on policy outlook:</p><ul><li>Last policy decision
was a tight one.</li><li>Future decisions
will continue being tight.</li><li>Policy is
restrictive and it has to be.</li><li>Sees progress on
inflation but there is still work left to do.</li></ul><p>Fed’s Harker (neutral –
voter) is in the higher for longer camp now:</p><ul><li>Fed is likely to be
done with rate hikes.</li><li>Supports
higher-for-longer interest rate stance.</li><li>Can't say for low
long rates will need to remain high.</li><li>Sees steadily
disinflation, falling below 3% this year.</li><li>Growth to moderate
next year but he doesn't see a recession.</li><li>Does not expect to
see mass layoffs.</li><li>Auto strikes and
renewed student loan payments will weigh on economy.</li><li>Expects unemployment
rate to rise to about 4%.</li></ul><p>ECB President Lagarde
(neutral – voter) leans on the higher for longer stance as she’s counting on
monetary policy lags to return inflation to their 2% target :</p><ul><li>We will return inflation
to 2%, it is happening.</li><li>There is more policy lag
in the pipeline from past hikes.</li></ul><p>The University of
Michigan Consumer Sentiment survey missed forecasts by a big margin across the
board with inflation expectations seeing a jump back up:</p><ul><li>Consumer Sentiment 63.0
vs. 67.2 expected and 68.1 prior.</li><li>Current conditions 66.7
vs. 70.4 expected and 71.4 prior.</li><li>Expectations 60.7 vs.
65.5 expected and 66.0 prior.</li><li>1-year inflation 3.8% vs.
3.2% prior.</li><li>5-10 year inflation 3.0% vs. 2.8% prior.</li></ul><p>BoC Governor Macklem sounds
hawkish as underlying inflation has been surprising to the upside and wage growth
has been solid:</p><ul><li>Higher long-term bond
yields are not a substitute for what needs to be done to get inflation back
down to target.</li><li>We are seeing clear signs monetary policy
is working to rebalance supply and demand, but inflation is still too high.</li><li>We're not really seeing downward momentum
in underlying inflation and that is a concern.</li><li>Strength of Canadian economy means people
are getting wage increases that will help make it easier to digest impact
of higher mortgage rates after renewal.</li></ul><p>The highlights for next
week will be:</p><ul><li>Monday: Japan Industrial
Production, NZ CPI, PBoC MLF.</li><li>Tuesday: RBA Meeting
Minutes, UK Jobs report, German ZEW, Canada CPI, US Retail Sales, US
Manufacturing Production, US NAHB Housing Market Index.</li><li>Wednesday: China GDP,
China Industrial Production, China Retail Sales, China Unemployment Rate, UK
CPI and PPI, US Housing Starts and Building Permits.</li><li>Thursday: Australia Jobs
report, US Jobless Claims, Fed Chair Powell speaks. </li><li>Friday: Japan CPI, PBoC
LPR, UK Retail Sales, Canada Retail Sales.</li></ul><p>That’s all folks. Have a
great weekend!</p>

This article was written by Giuseppe Dellamotta at www.forexlive.com.