E Market Deluge

What Happened?

  • Japan September Domestic PPI rose 0.3% m/m, 3% y/y after 0% m/m, 3.0% y/y – as expected. The ex-electricity rate was up 0.2% m/m. Import prices rose 0.1% m/m, export prices rose 0.6^ m/m while the JPY weakened 0.7% on the month. The biggest increase was in energy with oil and products adding 0.16pp to headline while agriculture/fish subtracted 0.02pp. 
  • BOJ Sakurai: Still need easy policy but eying side effects. Sakurai, an advocate of the idea that the BOJ must keep a close eye on the side-effects of easy policy, warned, "Maintaining the easy policy to achieve the price stability target will cause a risk the financial and economic imbalances accumulate." The BOJ must examine financial imbalances and manage monetary policy in an appropriate manner, he said, without elaborating how the BOJ addresses the risks its facing now. Sakurai also voiced concern over increasing uncertainties regarding the outlook for the global economy and over downside risks from trade disputes and fund outflows from emerging economies.
  • Australia October consumer inflation expectations unchanged at 4% - as expected. The mean-weighted inflation rose to 2.5% from 2.4%, however it’s been consistent within the 2.3-2.5% range for 6 months. The data confirm inflation expectations are well anchored and consistent with the RBA target. 
  • RBA Ellis: Labor market good indicator for growth pulse.Ellis was speaking in Melbourne at the Melbourne Institute 2018 Economic and Social Outlook Conference on the topic, "Supporting Growth in the Short Run and the Long Run."The main message was that monetary policy needs to be expansionary to support above-trend growth when there is spare capacity in the economy. And the best guide to spare capacity is the labor market. Ellis said that "If employment is growing faster than the working-age population, and the unemployment rate is coming down, those are pretty good signs that the economy is running faster than 'trend'."

  • Sweden September CPIF rose 0.5% m/m, 2.5% y/y after -0.2% m/m, 2.2% y/y – more than +0.4% m/m, 2.4% y/y expected. The CPI rose 2.3% y/y after 2.0% y/y. Core CPIF rose 1.6% - in line with the Riksbank. Food and accommodation prices led to the rise in the headline. 

  • Bank of England 3Q Credit Conditions Survey: Mortgage supply shrinks, spreads narrow. The credit availability 3M forward drops -6.4% after +0.5% in 2Q. Corporate credit available past 3M -1.7% after +0.5%, household secured credit available -10.8% after +4% and outlook 3M forward -14.8% after -4.1%. Unsecured household credit -8.8% after -4.3% with 3M forward -10.7% from -7.7%. 
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