Market News and Charts for October 18, 2021
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It is another day of the Consumer Price Index update on the European Union’s biggest economies. French inflation climbed 2.2% YoY in September, which directly ditched the 2.1% pace expected by analysts. Similarly, the result is higher than August’s 1.9% record. Meanwhile, the month-on-month gauge printed a -0.2% decline which shows that prices still struggle to find a clear trajectory of their future moves. Moreover, Italy also had a lukewarm inflation update in September this year. The yearly advance settled at 2.5%, below the forecasted 2.6% hike. Similarly, the MoM measure failed to move past a negative territory after coming at -0.2%. Lastly, Spain did not fare any better as Spanish CPI in September did not make any improvement from the previous record. YoY update is at 4.0% while the monthly yardstick is at 0.8% hike, which is the same with August’s numbers. Nevertheless, these recent fallouts are expected to keep EU inflation in check after concerns rose.
The US Retail Sales, an important gauge of the country’s overall health of economic recovery, has shown some momentum loss in September. The gauge listed a 13.95% YoY hike during the month, lower than the previous month’s revised 15.40% expansion. This is the lowest recorded so far since February 2021 where the measure bottomed at 6.27%. During that time, vaccinations in countries have only piloted and the uncertainty is still dominant in the market. Nevertheless, the month-on-month measure is above expectations after coming at 0.7%. This is better than the -0.7% forecasted by analysts. However, it still failed to move past August’s 0.9% growth. Investors are still worried about the inflation surge in the world’s largest economy. The US Producer Price Index during the same period surged 8.6%. This is the measure’s biggest jump in more than a decade. Meanwhile, the Federal Reserve kept a dovish stance in interest at the moment with temporary inflation surge.
Over the weekend, New Zealand gave an update about its inflation health. The country’s Consumer Price Index (CPI) in the third quarter of 2021 jumped by 4.9% YoY, which is higher than the 4.1% forecast by analysts. The recent record ignited investors’ worries since it is also a big upgrade from the previous month’s 3.3% result. Meanwhile, the month-on-month timeline also showed a long stride after coming at 2.2%. This sharp rise is way past the central bank’s original target. It likewise made it past analysts’ average consensus for the third quarter, which had been given at 2.2%. The Q2’s monthly increase came at 1.3%. With this, New Zealand has become the latest addition to nations with skyrocketing Consumer Price Index results. On the other hand, analysts believe that a rate hike might not come any time soon given that Auckland’s local Covid transmissions continue to climb. The country logged 94 new cases last week which had its highest daily infections to date.
The market’s eyes and ears are all focused on the release of the Reserve Bank of Australia’s latest meeting minutes. In an earlier statement, the RBA asserted expectations on the return of economic recovery. On the other hand, the Covid-19 havoc, which led to extended restrictions on its capital business hubs in the past months appears on the downside. With this, analysts are certain that the RBA will not raise interest rates until 2024, in line with earlier forecasts. Even the global panic on skyrocketing rates could not penetrate the central bank’s dovish stance. The latter has been vocal about its plan to keep its bond purchasing program intact at elevated levels. The RBA said that it is worried that the recent pandemic fallout might lead to falling property prices. Also, the statement could also extend to the continued loss of jobs in underperforming sectors. Contrary to this notion, some analysts from Goldman Sachs forecast that Australian Home Prices will peak by next year.
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