Daily update
Daily update
- The extension of the ceasefire in the Israel-Hamas war is, of course, primarily a humanitarian concern. Investors may interpret this as lessening the risks that the conflict broadens to the wider region.
- The UK BRC shop price index reported a mix of disinflation and deflation pressures. Non-food prices fell on the month. This is no surprise; the global trend for consumers is slower spending on durable goods, which slows or reverses price increases. Food price inflation slowed. Retailers are talking about costs lessening. An alternative explanation is consumers are less willing to support profit margin expansion.
- US President Biden was critical of profit-led inflation in remarks yesterday (Biden used more dramatic language). The problem for politicians is that this is not, and never has been, the 1970s. Lower inflation was noticeable in the 1970s because consumers were used to price increases. Consumers today are used to price stability, and so price levels get more attention than price changes. Price declines for durable goods are also less noticeable than the price levels of frequently bought purchases—the Snickers bar or Starbucks coffee is the price consumers focus on.
- Assorted central bankers are crowding the calendar, and the Eurozone releases the M3 money supply (expected to decline, again).
