October 16th Financial News
FastBull Featured
2024-10-16Canada's inflation slowed in September as gas prices declined significantly; the New York Fed's September survey shows inflation expectations tick up at the medium- and longer-term horizons...
[Quick Facts]
1. Canada's inflation slows in September due to lower gas prices.
2. U.S. inflation expectations tick up at medium- and longer-term horizons.
3. Fed's Daly: Open to one more rate cut this year.
4. Fed's Bostic: Only one more 25 basis point cut needed this year.
5. Israel agrees not to strike Iranian oil facilities, sending oil prices lower.
[News Details]
Canada's inflation slows in September due to lower gas prices
Statistics Canada reported on Tuesday that due to a substantial drop in gas prices, the CPI fell by 0.4% month-on-month in September, marking the largest decline since December 2022. Year-on-year, inflation increased by 1.6%, down from 2% the previous month, representing the smallest increase since February 2021. The ongoing decline in energy prices has helped bring the overall inflation rate closer to the Bank of Canada's 2% target more quickly than expected, with markets anticipating a higher likelihood of a 50 basis point rate cut by the Bank of Canada next week.
U.S. inflation expectations tick up at medium- and longer-term horizons
The latest survey from the New York Fed on Tuesday indicated that consumers' inflation expectations for the next year remained steady at 3% in September, while the three-year-ahead expectations rose to 2.7%, and the five-year-ahead expectations increased to 2.9%. Most labor market-related surveys remained stable. The average perceived probability of missing a minimum debt payment over the next three months increased to 14.2%. Nevertheless, respondents' outlook for the coming year improved, with expectations that financial conditions and credit access will improve as U.S. stock prices rise and interest rates decline.
Fed's Daly: Open to one more rate cut this year
San Francisco Fed President Mary Daly stated on Tuesday that the 50 basis point rate cut in September was an appropriate policy adjustment and that rates remain restrictive. Economic conditions have notably improved, and the labor market is no longer a significant source of inflationary pressure. In the long term, current rates are still far from neutral. The Fed may cut rates one to two more times this year, by 25 basis points each time, but Daly is open to the possibility of not cutting rates at one of the remaining two Fed policy meetings this year.
Fed's Bostic: Only one more 25 basis point cut needed this year
Atlanta Fed President Raphael Bostic mentioned on Tuesday that the U.S. economy is performing quite well, and he does not foresee a recession. Employment will remain strong, and he expressed considerable confidence in inflation returning to the 2% target. In the September update of the Fed's dot plot, he predicted one more 25 basis point rate cut this year, following the 50 basis point cut in September. However, he noted that forecasts are not fixed and will be adjusted based on upcoming inflation and labor market data.
Israel agrees not to strike Iranian oil facilities, sending oil prices lower
On Tuesday, international oil prices experienced a significant drop following reports that Israel agreed not to target Iranian oil facilities. This eased market concerns over supply disruptions, while OPEC lowered its forecasts for global oil demand growth in 2024 and 2025. WTI crude oil ultimately closed down 1.36% at $70.96 per barrel, and Brent crude oil fell 0.57% to $74.64 per barrel. Israel's recent comments have alleviated a major concern in the oil market regarding potential actions against Iranian oil infrastructure, directly resulting in a sharp decline in oil prices.
[Today's Focus]
UTC+8 14:00 U.K. CPI YoY (Sept)
UTC+8 20:30 U.S. Import Price Index MoM (Sept)
