German PPI And Hong Kong CPI Significantly Decreased
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The beginning of the week is quite calm when it comes to reports. Today, attention may be drawn to the events from the second half of the day, ie reports from New Zealand.
German PPI
In Germany, there was a report on inflation from the manufacturer. For Europe's largest economy, it turns out that the reading was positive/negative. The current reading has reached the level of -4.2% , which is what was expected. In September, the PPI m/m peaked at 7.9% for the year and then dropped dramatically to 2.3%. Today's reading may suggest a negative trend.
PPI YoY has been on an upward trend since the beginning of the year. The current reading is at 34.5% and it is a drop from level of 45.8%.
Hong Kong CPI
The Hong Kong Consumer Price Index has reached 1.8% and thus increased/decreased. Since the beginning of the current year, it has remained at low levels to a maximum of 2.5%. A sharp increase in inflation took place in September and reached the level of 4.4%.
Source: investing.com
Speeches
Today, the market awaits three speeches from the European continent, including one from Great Britain.
The first speech was at 10:00 CET, The European Central Bank Supervisory Board Member Edouard Fernandez-Bollo. This speech can clarify certain aspects of the financial regulation in the eurozone. The speeches of the ECB's officials often contain references to possible future monetary policy objectives, assessments and measures
Bank of England (BOE) Monetary Policy Committee (MPC) Member Sir Jon Cunliffe will speak at 11:05 CET. His speeches often contain indications on the future possible direction of monetary policy.
Deutsche Bundesbank President and voting member of the ECB Governing Council Joachim Nagel is set to speak at 19:30 CET. He may drop subtle clues regarding future monetary policy.
BCB Focus Market Readout
The Central Bank of Brazil will publish a report on market expectations regarding the economic performance of the country's economy, i.e. Focus Market Readout. Expectations are important because they will determine what mood prevails in the economy, whether the country is developing and what the further economic situation in Brazil may look like.
US 2-Y and 5-Y Note-Auction
Yield fluctuations should be monitored closely as an indicator of the government debt situation. Investors compare the average rate at auction to the rate at previous auctions of the same security.
US Treasuries have maturities of two to ten years. Governments issue government bonds to borrow money to cover the gap between the amount they receive in taxes and the amount they spend refinancing existing debt and/or raising capital. The interest rate on government bonds reflects the return an investor will receive by holding the bond for its life.
When it comes to 2Y and 5Y bonds, yields are increasing, which means that investors rate the risk associated with US debt high. And they want the highest possible rate of return to decide to buy US bonds. The last reading for 2Y was 4.460% and if the trend continues you can expect a drop of 4.5%.
The situation for 5-Y bonds is better as the ongoing uptrend has not gone that high and the last reading was down. The decrease took place from the level of 4.228% to the level of 4.192%
New Zealand Trade Balance
At the end of the day, reports on imports and exports, and thus on the trade balance, will come from New Zealand. This country is expected to import more than it exports and its trade balance will remain negative. The trade balance is forecast at -1.715M, this is the expected decline from the previous reading which was at -1.615M. It can mean that a country with a large trade deficit borrows money to pay for its goods and services.
Even though the beginning of the week was calm, watch out for the next days. There may be important reports for the markets.
Summary:
3:15 CET China New Loans
9:00 CET German PPI (Oct)
10:00 CET ECB Supervisory Board Member Fernandez-Bollo Speaks
10:30 CET Hong Kong CPI (YoY) (Oct)
11:05 CET BoE MPC Member Cunliffe Speaks
13:25 CET BCB Focus Market Readout
18:30 CET US 2-Year Note Auction
19:30 CET German Buba President Nagel Speaks
20:00 CET US 5-Year Note Auction
23:45 CET New Zealand Trade Balance
Source: https://www.investing.com/economic-calendar/
