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GLOBAL MACRO: Inflation Outlook Positive But Food & Metal Prices Trending Higher

GLOBAL MACRO
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Global factors have been mixed over September and October, but they are generally likely to put downward pressure on inflation or be neutral going forward, which is good news for central banks as most continue to reduce policy restrictiveness. The stand out though is food prices which rose sharply in September. Metal prices are also higher in October boosted by China stimulus announcements, but they are vulnerable to disappointing growth outcomes.

  • Food prices may add to price pressures with the FAO global index rising 3% m/m in September, the fastest since March 2022. The increase was also broad based and the annual rate is now up 2.1% driven by dairy, meat and oils. While rice prices rose in August and September, they are down in October. 

G20 CPI inflation vs food prices y/y%

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Global factors have been mixed over September and October, but they are generally likely to put downward pressure on inflation or be neutral going forward, which is good news for central banks as most continue to reduce policy restrictiveness. The stand out though is food prices which rose sharply in September. Metal prices are also higher in October boosted by China stimulus announcements, but they are vulnerable to disappointing growth outcomes.

  • Food prices may add to price pressures with the FAO global index rising 3% m/m in September, the fastest since March 2022. The increase was also broad based and the annual rate is now up 2.1% driven by dairy, meat and oils. While rice prices rose in August and September, they are down in October. 

G20 CPI inflation vs food prices y/y%

Keep reading...Show less