November 14th Financial News

Daily News

Summary:

U.S. CPI data is expected to be affected by how health insurance costs are calculated; ECB Guindos says Eurozone inflation may temporarily rebound, though its prevailing direction is downwards; British Prime Minister reshuffles cabinet...

[Quick Facts]

1. NY Fed October finds softer inflation expectations in October.

2. U.S. CPI is expected to be affected by how health insurance costs are calculated.

3. OPEC: The oil market remains strong despite negative sentiment.

4. Guindos: Eurozone inflation may temporarily rebound, though its prevailing direction is downwards.

5. British Prime Minister reshuffles cabinet.

[News Details]

NY Fed October finds softer inflation expectations in October

The New York Fed's latest consumer expectations survey reported softer inflation expectations in October overall, despite rising expectations for future gasoline price increases, while the outlook for employment and personal finances was basically stable. Respondents expect inflation to fall to 3.6% after a year, down from 3.7% in September, to 3% after three years, unchanged from September, and to 2.7% after five years, down from 2.8% in September. Expected increases in home prices were unchanged at a modest 3% in October, while expectations for future gasoline price increases were revised up to 5% from 4.8% in September, according to the report. The survey found little change in consumers' views of the job market outlook, with fewer people expecting the unemployment rate to rise next year and slightly more people expecting to lose their jobs over the next 12 months. The report also said that households' views of their current personal finances have improved, with a "mixed" view of their situation a year from now.

U.S. CPI is expected to be affected by how health insurance costs are calculated

Changes in the way the U.S. government estimates health insurance costs are expected to slightly boost the CPI, reversing the trend that inflation has eased in recent months. The U.S. Bureau of Labor Statistics made some adjustments to the way the category is tabulated in the October CPI report released on Tuesday. In addition to routine changes in the source data, the new methodology will smooth out some fluctuations and reduce the lag in time of the index. The new calculation is expected to put upward pressure on the overall CPI, at least in the short term. It will also boost supercore services inflation, which excludes energy and housing.

OPEC: The oil market remains strong despite negative sentiment

OPEC said on Monday that oil market fundamentals remain strong. At the same time, it slightly raised its forecast for global oil demand growth in 2023 and maintained its forecast for 2024. The price of Brent crude has fallen back to around $82 a barrel from a yearly high of close to $98 a barrel in September. While supply cuts by OPEC and its allies as well as the conflict in the Middle East have provided support for oil prices, concerns about economic growth and demand are still weighing on them. OPEC's monthly report, however, said that while "negative sentiment has been overstated," "recent data confirms strong growth trends in main global economies and healthy oil market fundamentals." OPEC raised its forecast for world oil demand growth in 2023 to 2.46 million barrels per day (bpd), an increase of 20,000 bpd from the previous forecast. The demand forecast for 2024 was unchanged from last month.

Guindos: Eurozone inflation may temporarily rebound, though its prevailing direction is downwards

European Central Bank (ECB) Vice President Luis de Guindos said in a speech on November 13 that the euro area economy would remain subdued for now but should strengthen again, and there are signs that the labor market is weakening. "We expect a temporary rebound in inflation in the coming months as the base effects from the sharp increase in energy and food prices in autumn 2022 drop out," Guindos said. "But we see the general disinflationary process continuing over the medium term."

Energy prices remain a major source of uncertainty amid heightened geopolitical tensions and the impact of fiscal measures, as do food prices, which could also come under upward pressure due to unfavorable weather conditions and the broader climate crisis. In this highly uncertain environment, where geopolitical shocks are coming in fast, I think we have to be very careful in our communication, so I wouldn't prejudge the future path of interest rates, and it's too early to talk about rate cuts, Guindos said.

British Prime Minister reshuffles cabinet

British Prime Minister Rishi Sunak announced on November 13 to reshuffle the cabinet, with the interior minister, foreign minister, health secretary, and other positions changed.

Sunak fired interior minister Suella Braverman while appointing James Cleverly as interior minister and former PM David Cameron as foreign minister.

On the same day, a number of other government officials resigned or were dismissed. After that, Sunak made more personnel adjustment decisions. According to the new cabinet list, former Health Secretary Steve Barclay was appointed as Environment Secretary, Victoria Atkins as Environment Secretary, John Glen as Paymaster General, and Richard Holden as Conservative Party Chairman and minister without portfolio.

[Focus of the Day]

UTC+8 10:00 U.S. Treasury Sec Yellen Speaks

UTC+8 15:00 U.K. ILO 3-Month Unemployment Rate (Sept)

UTC+8 17:00 European Central Bank Chief Economist Lane Speaks

UTC+8 17:00 European Central Bank Governing Council Member Centeno Speaks

UTC+8 17:30 European Central Bank Governing Council Member Villeroy Speaks

UTC+8 20:30 Bank of England Monetary Policy Member Dhingra Speaks

UTC+8 21:30 U.S. CPI YoY (Oct)

UTC+8 21:45 Bank of England Chief Economist Pill Speaks

UTC+8 01:00 Next Day: European Central Bank Governing Council Member Villeroy Speaks

UTC+8 01:45 Next Day: Chicago Fed President Goolsbee Speaks

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