This week’s calendar is a light one in terms of data releases as the US prepares to celebrate Thanksgiving Day on Thursday. Later today, the Bank of Canada (BoC) as well as Statistics Canada will publish their CPI inflation reports for October.

The People’s Bank of China (PBoC) kept borrowing costs unchanged as it was expected to focus on the impact of its monetary stimulus on the economy while the yuan kept getting weaker.
 

BoC And Statistics Canada To Publish CPI Reports

Economists suggest that CPI inflation in Canada fell to 3.2% in October, on an annualized basis, recording another drop that would bring it closer to the BoC’s target. It should be noted that headline inflation came in at 3.8% in September.

Analysts note that if the forecast was to be confirmed, it would be positive news for the BoC’s governing board, which wants to see inflation recording a sustained drop. The Canadian central bank has kept interest rates on hold in its last two board meetings, becoming one of the first major banks to implement a pause in monetary policy tightening.
 

PBoC Keeps Interest Rates On Hold 

The Chinese central bank announced its decision to keep interest rates on hold yesterday morning. The decision was in line with market expectations. Economists suggest that the PBoC made this decision as the sliding yuan could not support further monetary policy easing while policymakers would like to examine the effect of a powerful stimulus package on the economy. 

Following the announcement, Bloomberg’s analysts noted that “the decision by China’s commercial lenders to keep their prime rates steady on Monday was almost a foregone conclusion after the People’s Bank of China held rates last week. The question is, what’s next? We expect additional easing, but with measures focused more on stimulating credit growth rather than lowering borrowing costs.”
 

Bundesbank: German Economy To Shrink In Q4?

A survey released by Bundesbank, Germany’s central bank, sparked more worries regarding the country’s economic condition. Economists working for the German institution suggested that “the economic output is likely to once again decline slightly in the fourth quarter of 2023,” adding that “the German economy is set to recover only arduously from the period of weakness that has persisted since the outbreak of war against Ukraine.”

The report mentioned that signs of slight improvement that could turn the tide after the beginning of the new year have been observed. However, commenting on global economic activity, Bundesbank’s analysts noted that there is no evidence of a sustained improvement in global industrial growth.
 

Commerzbank: Oil Prices Likely Back To $85 In Q1 2024

As oil prices have slid in the last few weeks, Commerzbank’s analysts suggest that they might hover around $85 per barrel in the first quarter of 2024.

Commenting on updates from the oil market, they wrote: “As Saudi Arabia is likely to maintain its voluntary production cut beyond the end of the year, only a modest supply surplus is on the cards for the Oil market at the beginning of next year. There is even a supply deficit on the horizon for the second half of 2024 due to rising demand, which would allow Saudi Arabia to reverse the production cut. Overall, the price of Brent Crude is expected to recover to $85 per barrel in the first quarter of 2024 and to rise further to $90 per barrel by the end of 2024.”

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