RBA SAYS SOME UPSIDE INFLATION RISKS HAVE EASED.

MNI: RBA LEAVES CASH RATE AT 4.35%

CHINA NOV EXPORTS +6.7% Y/Y VS MEDIAN +8.9% Y/Y: CUSTOMS

MNI: CHINA YTD EXPORTS +6.7% Y/Y IN YUAN TERM: CUSTOMS

MNI: PBOC Net Injects CNY90.3 Bln via OMO Tuesday

MNI: PBOC Sets Yuan Parity Higher At 7.1896 Tues; -1.71% Y/Y

EZ/UK Bond Supply Calendar: Austria, UK Auction on Tuesday

EZ/UK T-Bill Calendar: Spain, Belgium Auction on Tuesday

MNI:US OCT WHOLESALE INV 0.2%; SALES -0.1%

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

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

MACRO ANALYSIS: October Data Distortions Could Cloud November FOMC (4/4)

MACRO ANALYSIS
Homepagemarkets-real-timePolitical RiskCommoditiesPolitical Risk BulletBulletMarketsFixed Income BulletsForeign Exchange Bullets

For the Fed outlook, there are a few considerations:

  • October's payrolls number on Nov 1 will be an especially sensitive report given it comes less than a week before the FOMC meeting for which the debate between a 25bp or 50bp cut appears to hinge in large part on labor market developments. It's unlikely that the White House will intervene in the strike ahead of the election - see Tuesday's US Politics Daily for more (PDF link) - which means there could be prolonged disruptions to the employment data if a deal isn't reached in time.
  • If it's hard to parse the employment report due to the disruption, the implications for the FOMC rate decision could be unclear - potentially another split decision between a 25bp and 50bp cut. Increasing the complexity is the potential for other labor stoppages, including at Boeing.
  • It is likely to impact the clarity provided by economic data in general: The ISM's Tim Fiore told MNI (link) that the manufacturing sector is "going to have a lot of noise" in October in part because of the strikes. The downside effects on GDP will, as noted above, be difficult to immediately ascertain.
  • Just this week Chair Powell reminded that "goods prices have fallen 0.5 percent over the past year, close to their pre-pandemic pace, as supply bottlenecks have eased" - the strike threatens a key component to the overall disinflation progress that has allowed the cutting cycle to begin.
  • And while the port strike reflects a sector with high worker power via high union representation, it will be a reminder to the FOMC of potential tightness in some areas of the labor market, and inflationary implications thereof.
277 words

To read the full story

Close

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.

For the Fed outlook, there are a few considerations:

  • October's payrolls number on Nov 1 will be an especially sensitive report given it comes less than a week before the FOMC meeting for which the debate between a 25bp or 50bp cut appears to hinge in large part on labor market developments. It's unlikely that the White House will intervene in the strike ahead of the election - see Tuesday's US Politics Daily for more (PDF link) - which means there could be prolonged disruptions to the employment data if a deal isn't reached in time.
  • If it's hard to parse the employment report due to the disruption, the implications for the FOMC rate decision could be unclear - potentially another split decision between a 25bp and 50bp cut. Increasing the complexity is the potential for other labor stoppages, including at Boeing.
  • It is likely to impact the clarity provided by economic data in general: The ISM's Tim Fiore told MNI (link) that the manufacturing sector is "going to have a lot of noise" in October in part because of the strikes. The downside effects on GDP will, as noted above, be difficult to immediately ascertain.
  • Just this week Chair Powell reminded that "goods prices have fallen 0.5 percent over the past year, close to their pre-pandemic pace, as supply bottlenecks have eased" - the strike threatens a key component to the overall disinflation progress that has allowed the cutting cycle to begin.
  • And while the port strike reflects a sector with high worker power via high union representation, it will be a reminder to the FOMC of potential tightness in some areas of the labor market, and inflationary implications thereof.