The economic calendar is quite packed today. First of all, there was a trade balance report from Japan this morning which was three times better than anticipated. This is the second upbeat economic report from Japan this week, after its GDP data exceeded investors’ expectations a few days ago.
Then came inflation reports from the United Kingdom. Core inflation rose to 1.5% in October and the YoY rate improved to 0.7%. Both numbers are better than the forecasts.
As for the eurozone, the inflation rate there remained stagnant at 0.2%, in both monthly and yearly terms. Note that this data is pre-lockdown, since most countries only took action starting from November. October’s numbers are thus of far lower consequence than the November reports will be.
Like the United Kingdom, Canada also saw an increase in its inflation rate last month, which climbed to 0.7% YoY, with a core inflation rate of 1% in October, beating the forecasts.
Later in the day we expect reports on crude oil reserves, building permits and housing starts from the United States, together with speeches from the Federal Reserve.
Speaking of the Fed, Donald Trump’s chosen nominee to the Board of Governors of the central bank, Judy Shelton, was dismissed after Senate Republicans decided to vote against her. The GOP seems to be putting more and more resistance against Trump these days, which is a clear signal that his term is truly coming to an end.
As for the stock market, today we are seeing an increase, which is likely a correction after yesterday’s drop. US stock indices will remain quite volatile as investors try to adjust their expectations in light of the new hope for Covid-19 vaccinations in 2021 and how that will counteract the damage the pandemic is currently inflicting upon the global economy.
