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Prices. Votes. Policies

| Posted by: Paul Donovan | Tags: Paul Donovan

  • Chinese producer price inflation rose 6.3% y/y. Does this herald a global inflation upswing? It does not. Chinese producer price inflation has a limited correlation with Chinese export prices, and Chinese export prices have a limited correlation with foreign goods prices. Domestic labor costs remain the focus for inflation pressures.
  • The UK parliament is scheduled to vote on key EU exit legislation, including the granting of the Henry VIII powers. These increase the power of the executive (for a limited period of time). The vote will attract attention given the fragile nature of the government's majority in the House of Commons.
  • The UN Security Council meets to discuss the North Korean situation, with the US sanctions proposal now diluted. There is unlikely to be much new information from today's meeting, but a rejection may increase the desire of the US president to act unilaterally on trade protection.
  • New York Fed President Dudley suggested that the recent hurricanes may impact the timing of a rate move by the Federal Reserve, but that they were unlikely to change the necessity of a rate hike given the strength of US economic activity.