Daily Update - 21st November 2017
German PPI producer price inflation fell back to 2.7% year over year in October, from 3.1% year over year in the previous month. Pretty much as expected and with the deceleration to a large extent due to lower energy prices, which rose 2.8% year over year in October, after jumping 4.9% year over year in September. The president of the ECB is speaking for the second business day in a row. Mario Draghi is mostly repeating the same stance of his previous speech: great growth but with lagging inflation. Yet he adds some other interesting comments: the central banker warns that geopolitical risks and outside forces could trigger a market correction that would trigger tightening in financial conditions. If this is the case, the ECB would have to act and loosen its monetary policy to help, and this means a lower euro. A busy day in the markets with several key speeches planned with FED Yellens speech being the highlight of the day. Early morning RBA will release their meeting minutes from the last meeting along with a speech by RBA Governor Philip Lowe. This will followed by a Financial Stability review in the euro zone which will be watched closely by markets. Next up will be Inflation report hearings from UK, where BOE Governor and the Monetary Policy Committee members are scheduled to testify before the Treasury Committee of the Parliament on inflation and economic outlook. The hearings last for a few hours and cause market volatility. Then the focus shifts to Janet Yellen, the Fed Chair, where she is scheduled to take part in a panel discussion on the topic “In Conversation with Mervyn King” at the Stern School of Business in New York University. Market volatility is expected during her speech. Yesterday’s Focus
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