The indicators of inflation both in USA like in the Euro zone will present the smallest annual increases since early or mid-2021. This reinforces the perspective that Interest rates they will not rise.
In the US, the price index for personal consumption expenditures is expected to increase around 3.1% in October from a year earlier. Meanwhile, the underlying index, which excludes food and fuel and is considered a more accurate indicator, it could rise 3.5%.
In the euro zone, inflation of 2.7% is anticipated for November, being the lowest since July 2021. Core inflation is also expected to decrease to 3.9%.
Despite these signs of slowing inflation, economic policymakers in both the United States and Europe continue to watch cautiously and want more evidence that inflation will remain under control in the long term.
The president of the European Central Bank, Christine Lagardeemphasized that “we are certainly not declaring victory” regarding inflation.
At the Federal Reserve, officials are taking a cautious approach to monetary policy. The minutes of their latest meeting revealed their concerns about how higher rates are starting to affect households and businesses.
Inflation: the economic data analyzed by the market
As for economic data, in the United States, the personal income and spending report is expected to show a slight increase in inflation-adjusted consumer spending. This decline in demand in October suggests an economic slowdown after growth in the third quarter.
In addition, the first revision of the gross domestic product for the third quarter is expected, with a forecast median 5% growth according to a Bloomberg survey. Initial estimates of business profits are also awaited.
In Canada, third-quarter GDP data will reveal whether the country has entered a recession, with forecasts suggesting at least minimal growth. November’s employment numbers will be crucial ahead of the Bank of Canada’s interest rate decision on December 6.
The OECD will present new forecasts, while central banks from New Zealand to South Korea are expected to keep interest rates stable.
In Asia, central bank governors will meet at the Hong Kong Monetary Authority’s global financial summit and the Bank for International Settlements conference. Chinese purchasing managers’ indices are awaited for signs of economic recovery.
Inflation in other latitudes
The central banks of South Korea, New Zealand, Thailand and India will make interest rate decisions. India will also release third quarter GDP.
In Japan, information on industrial production, retail sales and employment is expected. Additionally, business leaders will hear from Bank of Japan board members on normalizing monetary policy.
In Europe, inflation reports are expected in Spain, France, Germany and Italy, with expectations of declines in price levels. Reports from rating companies are also forecast, as Germany reviews its budget following a court ruling.
In Latin America, inflation in Brazil and Mexico stands out, with slowdown forecasts in both countries. Chile will publish activity and production reports, with special attention to the Imacec index of economic activity.
In summary, the global economic outlook shows signs of slowing inflation, as central banks and analysts continue to closely monitor key economic data to determine the direction of monetary policies and assess economic growth in different regions of the world.
Source: Ambito
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