Daily update
Daily update
- Japan’s 10-year government bond auction had solid demand. Normally, this would not merit attention, but international investors have been getting anxious about Japan’s debt. Domestic investors have not. Japan is wealthy, most bonds are owned domestically, and the government has a lot of practice in funding its borrowing requirements.
- Federal Reserve Chair Powell speaks, but in theory the members of the Fed are in a blackout period that requires them to say nothing interesting ahead of a Fed meeting. Some Fed members never emerge from this state. The Fed chair has been known to comment if the markets are becoming divorced from the Fed’s reality, but with the Fed divided Powell is unlikely to make strong policy statements today.
- The UK November BRC shop price index showed more disinflation than had been anticipated—non-food prices falling, and even food prices seeing slower inflation. This is not really suggestive of a significant inflation-creating supply-demand imbalance in the economy, but of course consumer price inflation is driven by administered and non-retail prices.
- Eurozone November CPI will not interest markets, already sated with the regional data. By not retaliating on tariffs, the EU has supported growth by keeping inflation subdued and supporting real household income growth.