Comprehensive picture for November

The week will be quite eventful and volatile for the markets.
Firstly, the publication of monthly inflation data is traditionally a nervous event for the markets.
Secondly, the period of corporate reporting begins.

Of course, the markets are interested in the general trend and specifically in the US data, since this is the basis for making a decision on the rate in early November.

Will be published this week data on September inflation:
👉 Brazil, data released on 11.10, price decline continues for the third month in a row. The current level of the consumer price index is 7.17% (against the previous year)
👉 India, data published on 11.10, the index has been rising for the third consecutive month since July and is approaching annual highs.
👉 USA — data will be published on 13.10
👉 Germany — data to be published on 13.10
👉 China — data will be published on 14.10
👉 France — data will be published on 14.10
👉 Spain — data to be published on 14.10

In almost all cases, analysts are conservative and expect values at the level of previous ones. I would venture to agree with them, since the dynamics of oil prices does not give reasons for optimism so far, in any case. The price of Brent Oil is again above $90 per barrel ($93 at the time of writing), which of course does not suit producers and continues to drive prices, and therefore provoke central banks to further increase interest rates.

By the way, sayings - "but we don't care", from my point of view, of course bravado or myopia. Or both.
Current interest rates will have a negative impact through the following channels:

  1. lending channel.
  2. Investment channel
  3. demand channel.

And producers of oil and oil products will face these effects in the very near future. Moreover, despite the decisions of OPEC + to reduce oil production, there is little that can help price dynamics in the medium term precisely as a result of these channels, especially the reduction in demand. In this situation, it is interesting that high rates give a chance for the development of really high-quality, high-tech industries, as they act as a kind of stress test for innovative projects. But this is definitely not a chance for resource or resource-intensive enterprises.

Also starts this week corporate reporting season, but interesting data (banks) will be published on Friday. Until that time, the market will already win back the data on inflation.

Author: Novel in macroeconomics

More news: