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Wednesday sees a full day of global inflation prints, further evidence of the run of higher prices for central banks ahead of Thursday's meetings.
UK Inflation Data (0700 GMT)
Markets will be watching inflation data keenly ahead of the BOE’s monetary policy decision announcement, although the November number alone is unlikely to convince the BoE to hike before February.
Analysts forecast headline CPI to hit 4.8% y/y, but with upside risks 0n the back of higher petrol prices. This is up from 4.2% in October, reflecting in part high energy prices from the October 1 increase in the Ofgem energy price cap. November annual CPIH is predicted to increase by a similar magnitude to 4.4% y/y from 3.8% y/y, whilst core inflation displays slightly milder growth to 3.7% y/y for November, up from 3.4% in October.
Monthly CPI is projected to slow to 0.4% m/m in November from 1.1% m/m in October.
Annual readings for producer prices for inputs and outputs are forecasted to bump up 0.2 percentage points to 13.2% y/y and 8.2% y/y respectively for November. However, monthly producer prices are both projected to slow by over half a percentage point to 0.6% m/m for inputs and 0.5% m/m for outputs, down from 1.6% and 1.1% respectively. Oil and petroleum are the key forces driving prices up, notably input PPI which is more volatile.
French Inflation Data (0700 GMT)
French headline inflation is expected to marginally increase in November’s final readings, set to remain in line with the flash forecast of 2.8% y/y, up from 2.6% y/y in October. For France this will be the highest reading since the GFC, with high energy prices continuing to be the main driver. On the month, analysts are looking for the reading to remain stable at 0.4% m/m in November.
Italian Inflation Data (0900 GMT)
For Italy, harmonised headline inflation is expected to hit 4.0% on the annual reading, in line with the flash estimate.
FOMC set to extend taper (1900GMT)
The Federal Reserve is expected to scale back its pandemic-era asset purchase program more quickly on Wednesday and pencil in two to three rate hikes next year after inflation hit a 39-year high last month, MNI's Washington bureau write.
U.S. inflation topped 6.8% in November and core CPI hit 4.9% as strong demand for cars and furniture were again met with supply shortages. Price pressures have also broadened in recent months, with shelter costs climbing steadily and restaurant industry wage hikes filtering through to higher dining out prices.
With many central banks in a blackout period ahead of Thursday's meetings, speakers are few and far between. However, BoC Governor Tiff Macklem is expected to speak at an event in Toronto.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.