Macroeconomics: The Day Ahead for 19 November

While there are statistical items of interest, via way of Eurozone final CPI, US Housing Starts and Canadian CPI on the day’s agenda, it may be the case that the central bank speakers, above all the testimony from various BoE MPC members on the latest Monetary Policy Report, and overnight RBA minutes have a greater impact on markets. The first of this week’s corporate earnings from US retailers sees results from Lowe’s and Walmart, while govt bond supply takes the form of UK 14-yr and Finnish 5 & 10-yr.

** Eurozone – October final CPI **

– October’s final CPI is likely to be confirmed at 2.0% y/y with the uptick from September almost wholly due to the rise in food prices, with core CPI unchanged at 2.7% y/y; the report should however show that ‘core core’ CPI measures continued to edge lower, despite an unchanged and still stubbornly high Services CPI at 3.9%. Given Stournaras’s comment yesterday that a December rate cut was ‘more or less’ a done deal, and his warning that Trump tariffs may lead to a Eurozone recession in the medium-term, today’s report is unlikely to move the dial much in terms of ECB rate expectations.

** U.S.A. – October Housing Starts **

– Yesterday’s uptick in the NAHB Housing Market Index (46 vs. expected 43, Oct 43) was a triumph of hope over reality, in so far as it was paced by an expected rise in future sales, and optimism over a reduction in regulatory restrictions, even though the latter hardly looks to be a priority for the Trump 2.0 administration, and mortgage rates continue to rise in line with UST yields. Be that as it may, Housing Starts are forecast to fall 1.3% m/m, mostly due to some disruption from Hurricane Milton, though the impact from Hurricane Helene on September’s Starts was minimal given a drop of just -0.5% m/m.

** Canada – October CPI **

– As with the US, a rise in gasoline prices is expected to account for much of the anticipated 0.3% m/m rise, which would see the y/y rate rebound to 1.9% from 1.6%, while core measures are expected to be broadly steady at 2.4% y/y. Having surprised to the downside in recent months, the headline upturn will not deter the BoC from further rate cuts, particularly if labour and growth indicators remain sluggish