Today, the US Consumer Price Index will be announced in November. It will be noted as a confirmation of the hawkish attitude at the US FOMC meeting next week. Inflation is expected to accelerate further from the previous October’s + 6.2%, with a year-on-year increase of + 6.8%. I was surprised at the high level of 6% last time, but this time it is expected to be even higher. However, strong numbers seem to be woven into the market, and the dollar buying reaction may not be so strong unless the numbers are higher than expected. The announcement is scheduled for 10:30 pm Japan time.
Regarding the remark event, ECB President Christine Lagarde, German Central Bank Governor Biteman, and French Central Bank Governor Bill Roy de Gallow will participate in the BIS-sponsored panel debate. ECB directors Panetta and ECB Elderson will give lectures. Inflation attitude survey (November) by the British central bank and market research firm Kantar will be released. The US-sponsored Democracy Summit will reach its final day.
In the overseas market after this, it seems that it will be a difficult weekend market ahead of the final monetary policy announcement of the year such as the US FOMC, UK MPC, ECB board next week. Among them, as mentioned above, many ECB officials participated in the event, and it seems that attention will be paid to whether or not they can get hints for future monetary policy.
Yesterday, as a statement by ECB officials, it was reported that they would discuss the scale and temporary expansion of the APP for a limited period. It was also reported that the reinvestment of bonds by purchasing PEPP would be considered to be fine-tuned to cope with future turmoil. It seems like a common practice to listen to the market reaction by leaking informational reports from the people concerned before the board of directors. There was a slight euro selling movement, but has this been woven into the market to some extent?
Other materials include geopolitical risk materials such as the composition of the US-China conflict over human rights issues and the US-Russia turmoil over the situation in Ukraine. Yesterday, the People’s Bank of China announced that it would raise the reserve requirement ratio for foreign currencies from 7% to 9%, inviting a depreciation of the yuan. It should also be noted that the amount of materials related to China, such as reports related to defaults of Chinese real estate companies, is increasing.
There are various topics. China Evergrande, Ukraine situation, ECB, democracy summit, etc. However, today’s main point is the US consumer price index. If inflation accelerates further, it will be easier to move on to buy USD, reminiscent of easing tightening.
Currently, the situation is that buying is gradually coming in due to speculation.