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USD Reverses Losses After October Producer Price Index Data
Published November 14, 2017
China’s economy cooled further last month; industrial output, fixed asset investment and retail sales missed expectations as the government extended a crackdown on debt risks and factory pollution. Data today suggests that policy makers are making progress in defusing financial risks by weaning China off its year-long addiction to cheap credit, signalling moderate growth over the next few years.
British inflation held at its highest level in five-and-a-half years in October, amid wrong-footed expectations from the Bank of England and other economists that it would hit a new peak. CPI held at an annual rate of 3% in October, below economists’ average expectation in a Reuters poll for a 3.1% annual rise. The Office for National Statistics said October’s steady reading reflected falls in fuel prices being offset by a higher cost of food.
Data today also showed that the euro zone economy grew by more than the USA in the third quarter compared with a year earlier, supporting the European Central Bank’s move to begin its bond-buying program. Eurostat confirmed its estimate from October 31 that the GDP of the 19 countries using the EUR grew by 0.6% in July-September from the previous three months and was 2.5% higher than in the same period of 2016. In the US, the economy grew 0.7% quarter-on-quarter and 2.3% year-on-year in the second quarter.
The American Petroleum Institute is due to release its weekly report today at 4:30pm EST amid forecasts for an oil-stock drop of roughly 2.8 million barrels. Brent Crude is down ~1.10% on the day with WTI Crude down ~1.05% on the day, trading at $62.48 and $56.18 respectively. Despite the cautious sentiment, crude prices stayed within sight of their strongest level in more than two years amid optimism that oil producing countries will agree to extend an output cut at their meeting at the end of this month.