Eyes on US consumer data and CPI inflation

While stock markets started the day trading lower, with several indices down between 1-2%, many traders will be awaiting today’s key data releases from the US which include preliminary university of michigan consumer confidence as well as CPI inflation. Both these reports could have a noticeable impact on stocks, particularly in the US, as fears of rising inflation have pushed the FED to announce it’s tapering recently and could lead to further action taken by the US central bank while consumer sentiment has been on a steady decline for several months.

A better than expected outcome from today’s data could reassure markets that despite growing fears related to the new variant the economy continues to recover which in turn could encourage the FED to change its approach in the near term. On the other hand, worse than expected reports could further incentivize the central bank to take action, something which may be closely followed by its peers around the world.

UK GDP report leaves investors concerned

Today’s GDP report showed an estimated growth of 0.1% in October 2021 and a return to 0.5% below its pre-pandemic levels. Services seem to be outperforming with an increase of 0.4% and a return to pre-covid levels while production output decreased by 0.6% in October 2021 and construction contracted output dropped by 1.8%, the largest fall since April 2020, partly due to rising costs and supply concerns. Overall today’s report could be considered positive by some, while on the other hand it may raise some concerns regarding the state of the economic recovery as we await the upcoming Bank of England decision.

Walid Koudmani

Market Analyst working in UK-Italian-Arabic markets covering a broad range of assets including stocks, commodities, FX and crypto. English, Italian and Arabic Speaker with a B.A in Business Management. Quoted in many prestigious publications including the Guardian, Barrons and Lefigaro and winner of bloomberg top forecast rank Q-2/Q-3 2020.