Macroeconomics: The Day Ahead for 19 November

Nvidia’s Q3 earnings tops a busier run of data and events today, which also has Japan’s Orders, Australian Q3 Wages and UK CPI to digest, head of final Eurozone CPI and some rather stale US trade data for August, while the October FOMC minutes tops the events schedule. Lenovo, Lowe’s and TJX also feature in terms of earnings and accompanied by a smattering of ECB and Fed speakers. There will also be a lot of focus on the Japan Finance Ministry press conference after the meeting with the BoJ, though whether it signals a more active approach to dealing with JPY weakness, rather than more ‘jawboning’ about one sided volatility remains to be seen. It is unlikely that it will offer a clear signal on further BoJ rate hikes, given that PM Takaichi, Finance Minister Katayama and Economy Minister Akazawa do not appear to be on the same page, and as previously noted much really depends on details of the (seemingly ever larger) stimulus package, and whether these will get the support from non-coalition parties that will be necessary.

** U.K. – October CPI **

CPI was broadly in line with forecasts at 0.4% m/m 3.6% y/y, as were the dips in core CPI to 3.4% and Services 4.5%, leaving inflation elevated, though the details underline that in y/y terms most of the upward pressure still coming from four sources: food, utilities, transport and restaurants/hotels, even if base effects from Transport and Household Utilities, which rose more in October 2024 than this year, accounted for the fall in Services CPI. But with the Budget looming next week and talk of Chancellor Reeves implementing measures to bear down on inflation, today’s report is unlikely to have any material impact on market rate expectations.

** U.S.A. – October FOMC minutes **

The October FOMC meeting minutes are likely to highlight already well documented resistance to the rate cut at that meeting from many non-voters, and even broader resistance to further rate cuts, given elevated inflation and much less concern about the health of the labour market, and relatively resilient growth (leaving aside the obvious impact of the govt shutdown). Outside of rate signals and the intensity of the related debate, attention will also need to be given to any discussion about money market tensions, given that the decision to end Treasury QT was not really a game changer, given the monthly roll-off was already tiny.