Daily Review – Monday 21-Nov-2016

Daily Review – Monday 21-Nov-2016

US – FOMC Member Speaking Recap

There were quite a few FOMC members speaking on Friday, here is a quick summary of the most interesting quotes.

James Bullard

“Markets are currently putting a high probability on a December move by the FOMC. I’m leaning towards supporting that,”

William Dudley

Speaking on the Fed’s inflation target for the US and whether they are on schedule, Dudley said: “They certainly seem to be,”

“That combined with an economy that continues to grow above trend, that is generating respectable payroll gains, certainly is consistent with the notion that we should be increasingly optimistic that we will reach our inflation objectives over the next few years.”

Esther George

“Monetary policy should avoid deliberately stoking the risks that come with overheating the U.S. economy,” she said, adding the Fed should “slowly raise the federal funds rate.”

While George did not say if she would back a hike at the Fed’s December 13-14 policy meeting, she said “moving sooner, rather than later” would take into account the lag time before changes in interest rates filter down to the real economy.

US – CB Leading Index m/m

The Conference Board Leading Economic Index for the US increased 0.1% in October to 124.5 (2010 = 100), following a 0.2% increase in September, and a 0.2% decline in August.

 

Canada – Core CPI m/m

Canada’s October core CPI, which excludes volatile components such as vegetables, energy and tobacco, remained at the same 0.2% growth rate as in September.

Year over year, October noted an increase of 1.7%, after increasing 1.8% in September.

 

Canada – CPI m/m

Canada’s main CPI increased 0.2% in October, after seeing a 0.1% in September.

Year over year, October noted an increase of 1.5%, after increasing 1.3% in September.

 

UK – MPC Member Broadbent Speaks

In line with BOE Governor Mark Carney, his Deputy Ben Broadbent isn’t backing down on the central bank’s monetary policy, reaffirming that they are not willing to sacrifice jobs or wage growth to counter inflation.

“We can tolerate high inflation because the alternative is a larger rise in unemployment, and weaker wage growth,” Broadbent said in London. “Put another way, we expect to have to accept those things — to some extent — in order to prevent inflation from rising further above the target. That’s the unavoidable nature of the trade-off that monetary policy occasionally faces,”

 

EU – ECB President Draghi Speaks

ECB President Mario Draghi sent a strong signal Friday that the ECB will extend its €1.7 trillion ($1.8 trillion) bond-purchase program next month, warning that the eurozone’s weak economy remains clouded by risks and heavily reliant on the ECB’s stimulus.

“We cannot yet drop our guard. The ECB will continue to act, as warranted, by using all the instruments available until inflation picks up sustainably,” he said.

 

EU – Euro Area Current Account

While the market was anticipating an increase in the euro area’s current account (€31.3B), September recorded a lower than expected surplus of €25.3B, down from a revised €29.1B in August.

 

EU – German PPI m/m

The producers price index for Germany rose 0.7% in October, compared to September which saw a decrease of 0.2%.

Compared with a year ago October 2016 fell 0.4%.

 

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