The delights of SDR membership
- China awaits official confirmation of the inclusion of the RMB in the IMF's SDR basket of currencies. Evidence from the UBS Reserve Management Survey suggests that those central banks that want to own RMB already own it, so it is not likely to change reserve holdings.
- Commodity prices have weakened in Asian trading (in dollar terms, not necessarily in terms of other currencies). Generally consumers are not big buyers of iron ore, and the translation of moderate commodity prices into consumer prices is limited.
- Big commodity prices do translate into consumer prices – oil for instance. The effects of the oil price drop are fading from the Euro area CPI data, which should be evident with Italian and German numbers today.
- The US offers the Chicago PMI data of manufacturing sentiment, which gets far more attention than it actually deserves. It should have no bearing on the Fed decision in December (indeed no single data item should have a bearing on the Fed decision in December).