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Macroeconomics: The Day Ahead for 14 November

  • US CPI in focus as UK labour data, Swedish CPI, India WPI are digested; German ZEW survey, Eurozone and CEE Q3 GDP prints, US NFIB Small Business Optimism ahead; busy day for central bank speakers; German 2-yr sale
  • UK labour data: public sector bonuses distort headline earnings, core wages trending lower but only slowly; labour demand relatively resilient
  • US CPI: gasoline price fall to dampen headline CPI; core CPI set to remain sticky as medical insurance swings from drag to boost

EVENTS PREVIEW

US CPI tops a busier day for statistics, with UK labour data, Swedish CPI (up slightly less than expected) and Indian WPI (falling a little more than forecast) to digest ahead of Germany’s ZEW survey (small improvement seen), the first revision to Eurozone Q3 GDP, and a slew of provisional Q3 GDP readings from Central and Eastern Europe, with US also looking to NFIB Small Business Optimism. Central bank speakers are abundant, above all at the SNB/Fed/BIS High-Level Conference, while Germany sells EUR 5.0 Bln of 2-yr. After yesterday’s upward revision to OPEC global oil demand forecasts (on the back of expected continued strength in China and India), attention turns to a likely more downbeat assessment from the IEA.

 

** U.K. – Sep/Oct labour data **

– Once again the labour data were mixed, with both HMRC Payrolls at +33K (vs. rev. prior +32K) and the experiment Q3 Employment gain of +54K showing some unexpected resilience, though both series are subject to relatively sharp revisions. Vacancies continued to drop (957K vs. prior 981K), but still remain well above their pre-pandemic peak. Average Weekly Earnings were heavily distorted at the headline level by one-off public bonuses, but still slipped to 7.9% y/y, while core Earnings slipped as expected to 7.7%. Per se the trend in wages is lower, but as with core inflation the path lower is rather shallow, and again supports the idea that rates will stay ‘high for longer’.

 

** U.S.A. – October CPI **

– Lower gasoline and utility prices look set to keep headline CPI in check with a 0.1% m/m rise that would bring the y/y rate back down to 3.3% (from 3.7%). But core CPI is likely to remain rather ‘sticky’ with a 0.3% m/m rise to leave the y/y rate unchanged at 4.1%, boosted above all by medical services (primarily due to idiosyncrasies around medical insurance), and thus reinforcing the Fed’s tightening

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