Inflationary pressures persist

Today's news headlines: 

‘UK inflation hits highest level in a decade’. UK Consumer Price Index data shot past analyst expectations in November, reaching 5.1%—its highest for a decade. The Bank of England's Monetary Policy Committee is due to meet this Thursday to give its latest decision on interest rates as Omicron continues to dominate the headlines. The likelihood of any material change in policy has faded over the last few weeks, with the probability of a rate hike in Thursday’s meeting hovering around a one-in-three chance. (Financial Times)

‘Congress votes to lift US debt ceiling to narrowly avoid default’. The Senate finally decided on the US debt ceiling yesterday as the December 15th deadline loomed. The debt limit has been raised by $2.5tn to an eye-watering $31.4tn. The agreement to abandon the 60 vote threshold in the 100 member senate has allowed the Democrats to lift the ceiling with a classic majority. The recent limit increase is expected to support the US government for at least another year. (Financial Times)


Today

Stocks drifted lower yesterday amid stronger-than-expected Producer Price Index data and Omicron fears continuing to harm sentiment; the S&P 500 was down 0.75% on the day. Asian markets slipped again overnight, with the Hang Seng falling around 1.00%. The US Dollar Index continues to hold above the $96 level ahead of the Federal Reserve meeting tonight.

Events

China Retail Sales y/y: 3.9% vs 4.9% last month
China Unemployment Rate: 5.0% vs 4.9% last month
UK CPI y/y: 5.1% vs 4.2% last month
Canada CPI m/m: 1:30PM
US Retail and Core Retail Sales: 1:30PM
US Empire State Manufacturing Index: 1:30PM
Bank of Canada Governor Tiff Macklem speaks: 5:00PM
Federal Open Market Committee Statement: 7:00PM
New Zealand Gross Domestic Product q/q: 9:45PM
Reserve Bank of Australia Governor Philip Lowe speaks: 11:30PM


Interbank rates:

GBP/USD – 1.3263
GBP/EUR – 1.1766
EUR/USD – 1.1272
USD/CAD – 1.2851

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