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Japanese producer output prices rose 7.1% year-on-year in October instead of the expected 6.5%. This increases pressure on the Bank of Japan to raise the rate on December 17-18 - the third time in a calendar year, something that has not happened since 1989.
The Office for National Statistics (UK's national statistics service) publishes its preliminary estimate of third-quarter GDP. Consensus is growth of 0.7% quarter-on-quarter versus 0.5% in the second quarter, with an annual rate of 1.9% versus 1.4%. GBP/USD approaches the release around 1.3275 - the lowest since mid-October.
October inflation in the US came in above forecast, and the government bond market responded with a sell-off. The DXY dollar index stands at 102.22 - a high since October 28, and the market considers a Fed rate hike on December 9 almost a done deal: 91.9% according to CME FedWatch versus 84% the day before.
Lorie Logan, president of the Federal Reserve Bank of Dallas, said on November 10 that the Fed may have to raise rates further this winter. For the past few months, the market had been living with the opposite picture - talk of easing.
US October prices rose faster than expected, and the market almost unanimously bet on a Fed rate hike on December 9. The euro lost 0.28% over the day and is trading around 1.1190.
US consumer prices rose 0.4% month-over-month in October versus the expected 0.23-0.3%. Immediately after the release at 16:30 MSK, exchanges forcibly closed roughly $200 million in long positions in crypto; Bitcoin and gold moved lower.
Fed Governor Christopher Waller said on Tuesday, November 10, during the European session: if US core inflation for October comes in around 0.3% month-over-month or higher, December will require a rate hike of a full half percentage point. The October CPI report itself is released the same day.
Taiwan's TSMC, the world's largest contract chipmaker (it produces processors on orders from other brands), reported a 60% increase in October revenue compared to October of last year. The driver is the same as in previous months - demand for artificial intelligence chips.
The US consumer price report is published today at 16:30 Moscow time, but it will not include a year-on-year change. The reason is the US government shutdown a year earlier, because of which some of the data was simply not collected. This was reported by CNBC.
This week, three data blocks come out for the US, and both crypto and tech stocks are already sliding ahead of them: consumer inflation on Tuesday, earnings from AI equipment makers on Thursday, and producer prices on Friday. BTC is trading around $74,322, down 1.85% over the day.
Austin Goolsbee, President of the Federal Reserve Bank of Chicago, said on Monday, November 9, that service price growth has been accelerating for several months. A day before the US inflation data, this is the most inconvenient argument for those expecting a rapid rate cut.
On Tuesday, the US consumer price report for October is released. The FactSet consensus is plus 0.2% for the month versus 0.6% in September, when annual price growth accelerated to 3.7%, the highest since May.
The October US employment report (NFP) was released on November 6 and showed 165K new jobs against a forecast of 65K. The pound lost about 0.6% against the dollar and fell below the 1.3400 level.
The October US labor market report came in more than double expectations, and the probability of a Fed rate hike at the December 9 meeting rose to 73%. US Treasury yields moved higher, and the dollar strengthened.
Bank of Japan Governor Kazuo Ueda speaks today, November 6, at 19:00 MSK. Japan's rate is currently 1.25% - the highest since April 1995, and Ueda is expected to hint whether the next move will come on December 18.
The US publishes its October employment report - the main release of the week for the dollar. Consensus expects +65 thousand non-farm payrolls after a weak +29 thousand a month earlier, and half an hour later the preliminary Michigan index is released.
Thomas Barkin, president of the Federal Reserve Bank of Richmond, said on Thursday, November 5, that inflation remains too high and for the Fed it is risk number one. He called the policy path clear: the only debate is about the pace of rate increases, and a gradual step "makes sense."
Beth Hammack, head of the Cleveland Fed, on Thursday called gradual rate increases the best path for US monetary policy. Inflation, she said, is too high and moving in the wrong direction, so policy must become restrictive.
The US Department of Labor reported on Thursday at 16:30 Moscow time: in the week to October 31, initial jobless claims came in at 189K versus a forecast of 196K. Layoffs in the American economy are lower than expected - and this is a day before the main employment report.
Ante Zigman, a member of the ECB Governing Council (the body that actually decides on the rate), said in comments to Bloomberg that the chance of another hike at the December meeting is high. The euro barely reacted to this: EUR/USD traded around 1.1220, slightly below the day's levels.
The rate was raised by 25 basis points, from 3.75% to 4%, exactly as the market expected. In the minutes, the Bank of England stated directly: further increases will most likely be needed, because inflation could approach 5% by mid-2027.
The German statistics were released on Thursday at 10:00 Moscow time and came in weaker than consensus. EUR/USD rolled back from session highs to just below 1.1250, but the pair still ends the week in positive territory.
At 03:00 Moscow time on November 5, the Bank of Japan published the minutes of the September meeting: board members agreed that the rate should continue to be raised. The yen is strengthening for the second day in a row, USD/JPY slid to 158.25, EUR/JPY to 177.90.
Consensus is 4.00% versus current 3.75% and a shift in the Committee vote from 3-0-6 to 7-0-2. GBP/USD approaches the decision at a seven-week high of 1.3485.
