Lower gas prices could avert Euro-area recession, Hong Kong record worst contraction in more than two-years.
October 31, 2022
GBP/USD 1.1558 GBP/EUR 1.1638 EUR/USD 0.9931 USD/CAD 1.3641 EUR/CHF 0.9930 EUR/SEK 10.9110 EUR/NOK 10.2792 EUR/DKK 7.4438 USD/ILS 3.5376 AUD/USD 0.6400 NZD/USD 0.5804 USD/SGD 1.4140 USD/JPY 148.24 USD/CNH 7.3185 USD/INR 82.5075 EUR/ILS 3.5132 GBP/ILS 4.0887 USD/ZAR 18.2820
UK business confidence dropped to its lowest level since March 2021. The model fell 1 point to 15% in its October survey. Contrary, the number of employers expecting to increase staffing levels rose for the first time in 5 months. The findings reflect the recent turmoil seen across the UK economy following Liz Truss’ tax cutting mini budget.EUR
A relentless stream of negative headlines had pushed gas prices to record highs over the last 9 months. However, this may be changing as high stockpile levels across the continent, combined with mild weather have sent gas spot prices tumbling. If energy prices continue to moderate this could reduce pressure on the ECB, and subsequently they can ease off on painful rate increases.
German inflation continued to surge through October, after jumping to double-digits for the first time in 70 years. Energy costs in Germany are being passed through to consumers, which may keep price gains elevated well into 2023. New support packages might help tame inflation, but it is unlikely to impact the short-term outlook.USD
September’s core PCE inflation accelerated through September, rising 0.3% matching forecasts. The higher print is unlikely to dissuade the Fed from downshifting from 0.75% hikes to 0.5% in December, which is currently the base case. The Employment Cost Index (ECI) will help ease the Fed’s communication challenge in signalling a downshift in its rate-hike pace for December. Total compensation for workers edged down to 1.2% in the third quarter.ASIA/PACIFIC
Hong Kong’s economy has recorded it worst contraction in more than two years, as the financial hubs recovery is hindered by weak global demand. GDP plunged 4.5% between July and September. This was also the third consecutive quarter of contraction.
China’s October PMIs all slipped below 50 into contractionary territory. The survey’s results were all taken prior to fresh covid curbs to contain outbreaks, which may weaken output yet again.ILS
Israel’s unemployment rate rose to 3.7% in September from a revised 3.5% in August. USDILS trades 0.5% higher intraday.Data & Events
UK Mortgage Approvals
Euro-Area Oct. CPI
OPEC World Oil Outlook
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