Something wicked this way comes?
- The US Federal Reserve indicated that "some" inflation would lead to a rate increase, and then wisely opted to say nothing else as the political war continues to wage overhead. We see a December rate hike.
- "Some" inflation this way comes because the US labor market is relatively tight, and domestic labor markets account for about 70% of inflation over time. Today's unit labor cost data is a part of that story (the Fed's wage tracker index is also a useful indicator).
- The UK High Court rules whether the government can invoke Article 50 to leave the EU without parliamentary approval. The market assumption is they can. Legal opinion suggests that once invoked, Article 50 can be revoked. Perhaps invoking on 1 April 2017 would allow the flexibility of saying it was all a joke?
- The Bank of England is unlikely to change policy today. The inflation report will be interesting as a herald of "more than some" inflation to come. The ECB's monthly bulletin may also offer insights into the prospect of "some" inflation coming in the euro area, or parts of it.