Daily update
Daily update
- UK September consumer price inflation was lower than expected. Air fares and fuel prices added, but food prices seem to have been subject to more general discounting. Previously, food prices mainly experienced discounts for supermarket loyalty card holders, which is not captured in the official inflation data.
- After the sharp decline in the gold price yesterday, the market has calmed somewhat. Some gold drivers—central bank purchases, lower US rates, weaker dollar expectations —still provide a level of support. The economic impact (via consumer wealth effects) is likely to be muted. Gold is a relatively small share of investors’ portfolios, and the price shift is quite small.
- US President Trump has signalled that some international meetings may not be happening. Questioning the mooted meeting with Russian President Putin is of limited market interest. Questioning whether a meeting with China’s President Xi will take place is more market-relevant. Trump’s focus on rare earths and soybeans shows the political importance of that meeting.
- The US taxpayers’ first foray into foreign exchange markets in years is not, so far, a great success. Market reports suggested the US intervened to buy Argentinian pesos yesterday, and that Argentinians were only too happy to sell to them. The peso hit a new low.