MNI China Daily Summary: Wednesday, December 11

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CORRECTED-MNI BRIEF: Brazil Inflation Rises To 4.87% In Nov

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MNI: JAPAN NOV CORP GOODS PRICE INDEX +3.7% Y/Y; OCT REV +3.6%

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

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Lagarde: Not Sure Where Neutral Rate Is Until We Get To It

ECB
Q: Is it fair to assume that the focus on wages means that you need to see wages falling before cutting rates? Or could it just be stable?
  • A: Are already seeing past - by looking at wage numbers, comp per employee etc,- are seeing a slight decline. Should it stabilise or decline? It's already declining. The hope is that wage increases are sufficiently absorbed by the profit unit so that it does not go into fueling inflation - which are not seeing at the moment.
  • The assumption in Dec was that profit unit would come down - this is actually happening.
  • Also one of the reasons we see growth coming up and beginning in 2024 - because of rising wages as inflation comes down - which should increase consumption.
Q: Where do you see the neutral rate?
  • A: Not going to answer as not sure. Won't know until get to the neutral rate.

Lagarde adds re the upcoming round of forecasts: We are in Jan and Q1 ends in March - premature to look at growth projection - will come to that in March. Need to be further along in disinflation process before can be confident inflation will hit the target sustainably. Giving insight into trajectory - but it's not forward guidance.

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