Daily update
Daily update
- Central bankers keep stressing rates will stay high—the Federal Reserve minutes signalled much the same message. Markets are not paying attention. There is a sense that central bankers are trying to manipulate the bond market vigilantes—but bond traders are like three-year olds at a party who are high on sugar and will not be controlled. Investors are increasingly looking at the disinflationary details of advanced economy consumer prices and speculating on rate cuts having to come sooner.
- US October durable goods orders have conflicting drivers. Consumers are not increasing spending on durable goods (European spending is slowing). Companies pursuing capital for labor substitution plans are investing in durable goods, but other companies are cutting back. Flexible working reduces demand for office furniture, for instance.
- The UK CBI trends survey is not likely to excite markets very much. US Michigan consumer sentiment releases revised November data, which will again stress the partisan bias in survey responses. This bias has become significantly worse in recent years, and suggests historical relationships between sentiment and reality cannot be relied upon.
- The hostage agreement between Israel and Hamas is a humanitarian, not a market, issue. Investors might see it as a signal that risks of a broader conflict have lessened.
