Economic Highlights of the Week
This week, everyone’s watching the October U.S. Consumer Price Index (CPI) report, coming out on Tuesday. This report tells us about inflation, and it’s a bit unpredictable this time because of a strike among auto workers and changes in health insurance costs. Also, watch U.S. retail sales data on Thursday, showing how much people are shopping. There’s also a big meeting between President Xi of China and President Biden on Wednesday, and we’re expecting some important news from China about their economy and maybe even a cut in their interest rates. The U.K. will also share news about jobs and how prices are changing there.
Last Week in the Markets
Last week was pretty steady; the markets didn’t change much because there wasn’t a lot of new economic information. Interest rates worldwide initially went down slightly but then rose again. This happened because some important people at the Federal Reserve (the U.S. central bank) said things that made people think interest rates might increase. Also, a report showed that people in the U.S. expect prices to rise more than we thought. Right now, it doesn’t look like the Federal Reserve will raise interest rates in December, and they might even lower them in March.
World Markets and Oil
Overall, markets were down slightly, even though U.S. stocks did well on Friday. In Japan, producers’ prices were lower than people thought they would be. Oil prices have dropped significantly, which is essential because it can tell us about the world’s economy. If oil prices stay low, it might mean that the global economy is slowing down.
Inflation in Norway
In Norway, prices increased more than expected in October, especially for food and furniture. This was a surprise and might mean Norway’s central bank will raise interest rates in December. But this isn’t certain, especially if their prices go down next month and their economy looks weaker.
Last week, stocks worldwide did well, especially companies that make or sell things (we call these “cyclical”). But smaller companies didn’t do as well because people worry more about them in a recession. Energy companies did a bit better on Friday, but they’re still not doing as well as tech companies.
European and Foreign Exchange Markets
In Europe, interest rates didn’t change much. In the currency market, currencies tied to commodities (like the Australian dollar) didn’t do so well. The surprise about Norway’s inflation made the Norwegian Krone stronger. The Euro was pretty stable against the U.S. dollar.
Not much happened in the market for company loans (called corporate bonds) on Friday. The prices of these loans changed only a little.
In Sweden, an important person from the central bank will give a speech before they decide on interest rates later in November.
How Does This Affect the Economy?
All these updates give us a mixed picture. Steady job and inflation reports are good because they show things are stable. But the ups and downs in oil prices and other markets show some uncertainty. Overall, these things might have a small positive impact on the economy. They suggest that things are generally stable, but some areas remain to watch closely.