ASX200: U.S Inflation to Influence ahead of October Employment Figures

The Stats

In November, the Westpac Consumer Confidence Index increased by 0.6% to 105.3, partially recovering from a 1.5% fall in October.

According to the latest Westpac Report,

• The lack of a major pickup in confidence came in spite of Sydney and Melbourne easing lockdown measures.
• Higher vaccination rates have continued to support consumer confidence, limiting a material decline in response to the last set of lockdown measures.

Looking at the sub-components:

• Family finances vs a year ago fell by 4.5% and was down by 1.9% year-on-year.
• By contrast, family finances next 12-months declined by a modest 0.7%.
• Economic conditions next 12-months rose by 3.3%, with conditions next 5-years up 2.6%.
• Time to buy a major household item increased by 1.8%, with the time to buy a dwelling up 9.4%.
• Also positive was an 11.1% slide in the Unemployment Expectations Index. Year-on-year, the index was down 24.9%.

China Inflation

In October, China’s annual rate of inflation accelerated from 0.7% to 1.5% versus a forecasted 1.4%.

Month-on-month, consumer prices increased by 0.7% following a 0.1% rise in September. Economists had forecast a 0.7% increase.

Wholesale inflationary pressures also accelerated. China’s annual wholesale rate of inflation picked up from 10.7% to 13.5%. Economists had forecast an annual rate of 12.4%.

The Market Movers

It was a mixed day for the banks. NAB jumped by 4.36%, with ANZ and Westpac seeing gains of 0.75% and 0.84% respectively. CBA ended the day up by just 0.09%, while Macquarie Group slipped by 0.02% to buck the trend.

Commodity stocks also had a mixed session. Newcrest Mining found support, rising by 0.64% to buck the trend.

BHP Group and Fortescue Metals Group Ltd slid by 2.70% and by 2.13%, however, with Rio Tinto ending the day down by 1.65%.

Other Asian Markets

Elsewhere, it was a mixed session, with the Hang Seng Index rising by 0.74% to buck the broader market trend once more.

The CSI300 and the Nikkei 225 ended the day with relatively modest losses of 0.53% and 0.61% respectively.

The Day Ahead

It’s a relatively quiet day ahead on the Asian economic calendar. All-important employment figures from Australia will be in focus early in the session.

With the RBA placing plenty of attention on labor market conditions and wage growth, today’s numbers will influence.

From overnight, further market reaction to the U.S inflation numbers will also be likely. In October, the U.S annual rate of core inflation accelerated from 4.0% to 4.6%.

The Futures

In the futures markets, at the time of writing, the ASX200 was down by 9 points.

For a look at all of today’s economic events, check out our economic calendar.