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Economic Update

Thoughts on the week ahead from Steve Waddington at Insight Investment – as at 14 November, 2017

15 Nov 2017
From

Steve Waddington

After a relatively calm week in terms of releases, this week is packed with inflation announcements. In addition to the key US consumer price index (CPI) report on Wednesday, we also have UK CPI Tuesday.

The CPI for Germany and France on Tuesday and Wednesday respectively should give an indication as to eurozone inflation on Thursday. Thursday will also have the October retail sales report from the US. Chinese October activity indicators tomorrow could also be a market driver.

We have a full schedule of central bank speakers. At the European Central Bank (ECB) policy panel discussion in Frankfurt today, major central bankers from the G7 countries will be speaking. There will be Mario Draghi from the ECB, Janet Yellen from the Federal Reserve (Fed), Mark Carney from the Bank of England and Haruhiko Kuroda from the Bank of Japan.

There appears to be a consensus within the Fed about a December increase in rates, but there could be a divergence of opinion regarding following rate increases. John Williams, who sits on the FOMC, said a rate rise in December “makes sense” and that he was “pencilling in” three further increases next year. However, Patrick Harker said that while he would support an interest rate rise next month, he wants to see signs of higher inflation before backing tightening next year.

The Senate Finance Committee is due to start working on mark-ups to the US tax reform bill. Given expectations that a final vote would occur before Thanksgiving on 23 November, there are likely to be several tax-related headlines this week given the differences between the senate and house’s tax bill. For further information read the full article.

Insight Investment is a leading asset manager focused on designing investment solutions to meet its clients’ needs. Founded in 2002, Insight’s collaborative approach has delivered both investment performance and growth in assets under management. Insight managed A$935bn (£552bn) as at 30 June 2017, across liability-driven investment, fixed income and currency, global multi-asset and absolute return, global farmland and specialist equities.

Insight Investment is owned by BNY Mellon, a global leader in investment management and investment services with $1.7 trillion in assets under management. The value of investments and any income from them will fluctuate and is not guaranteed (this may be partly due to exchange rate fluctuations). Investors may not get back the full amount invested. Past performance is not a guide to future performance.

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