Daily update
Daily update
- Markets reacted relatively calmly to reports of a missile striking Poland, killing two Polish citizens. US President Biden has said it is unlikely that the missile was fired from Russia. NATO leaders have been careful in their language. Investors might note the speed and unanimity of the NATO response—that unanimity might influence future Russian policy.
- Food and fuel prices pushed up the headline rate of UK inflation in October. Food prices are rising more than costs, but consumers can be sold a story to get them to accept higher prices. Service sector inflation slowed noticeably. Bank of England Governor Bailey testifies to parliament today.
- The US offers supply and demand data. Industrial production for October is expected to continue to expand, albeit more slowly. The issue is whether we are now entering a period of excess supply for goods.
- US demand is represented by retail sales. Weak pay bargaining means workers are unable to maintain real spending power. Consumption rests on the willingness to leverage household balance sheets with credit and savings. Lower income consumers are experiencing difficulties. Middle income consumers have more savings to access, and their inflation rate is notably lower than the headline consumer price figure—albeit still producing negative real income.
