Morning auction: not even at halftime

A preview of the day ahead in the European and global markets of Anshuman Daga

As a blitz of central bank rate meetings from Australia and Britain to the United States keeps investors on edge this week, markets will also grapple with crucial inflation data. and employment.

Monday kicks off with the Eurozone’s October inflation flash estimate, which is expected to remain elevated at 10.2% year-on-year.

With the ECB just delivering its second 75 basis point (bp) rate hike to stem price pressures, authorities are desperate to know if their actions are having the desired impact.

ECB Governing Council member Klaas Knot said on Sunday that the central bank’s next move in December is expected to be between 50 and 75 basis points.

“We’re not even at halftime yet,” Knot said in an interview with Dutch TV show Buitenhof, referring to the ECB’s fight against soaring eurozone inflation.

Eurozone borrowing costs jumped on Friday after stronger-than-expected inflation data from countries including France, Germany and Italy.

Factory surveys earlier this week should add to evidence of weakening global demand.

But for global investors, Tuesday and Wednesday’s Fed meeting will take center stage along with Friday’s U.S. jobs data.

Asian stocks edged higher on Monday on expectations that the Fed will moderate its expected rate hikes after this week’s meeting. The Fed is set to raise rates by 75 basis points on Wednesday.

Data from last Friday showed that consumer spending in the United States rose more than expected in September as underlying inflationary pressures persisted.

In a move that could deepen a global food crisis, Russia suspended its participation in a UN-brokered deal to export Black Sea grain, sending Chicago wheat futures up 5% on Monday.

Meanwhile, Luiz Inacio Lula da Silva narrowly beat President Jair Bolsonaro in a Sunday run-off election that marked a stunning comeback for the left-leaning former president and the end of Brazil’s most right-wing government. for decades.

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Personal consumption

Key developments that could influence markets on Monday:

Economic data: Retail sales in Germany in September, mortgage loans in September in the United Kingdom, CPI flash in October in the euro zone, GDP in the third quarter in flash

US economic data: US Oct Chicago PMI

Reporting by Anshuman Daga

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