What’s in Today’s Report:
- Market Multiple Table Chart
- CPI Preview: Good Bad and Ugly
Futures are slightly higher ahead of this morning’s CPI as reports suggest UK PM Truss will have to abandon more of her fiscal spending and tax cut plan.
Positively, conservative members of Parliament continued to push back against PM Truss’s fiscal plan and that’s helping the Pound rally and GILT yields to decline.
Negatively, Chinese authorities are reimposing some restrictions in Shanghai as COVID cases rise and as Chinese officials hold on to the “Zero COVID” policy.
Focus today will be on CPI and estimates are as follows: Headline: 0.2% m/m and 8.1% y/y. Core: 0.4% m/m and 6.5% y/y. For CPI to spark a material rally, markets will want to see outright declines in CPI (so less than 8.1% and 6.3% respectively). Conversely, year over year CPI coming in higher than September readings will reinforce the idea that inflation is not declining, and the market is a long, long way from a Fed pivot. The other notable report today is Jobless Claims (E: 225K) but that shouldn’t move markets.