— Equities today: Asian and European markets were mixed to firmer in overnight trading. U.S. Dow opened around 90 points higher. Inflation in Britain fell to its lowest level in two years. And consumer spending and industrial output in China rebounded last month, a hopeful sign for the world’s No. 2 economy. In Asia, Japan +2.5%. Hong Kong +3.9%. China +0.6%. India +1.1%. In Europe, at midday, London +1.1%. Paris +0.7%. Frankfurt +0.8%.
On the services front, prices remained unchanged following six consecutive increases. The 1.5% increase in the index for final demand transportation and warehousing services, along with a 0.1% rise in prices for final demand services less trade, transportation, and warehousing, offset a 0.7% decline in margins for final demand trade services.
The core inflation rate, which excludes volatile items like food and energy, also decreased to 5.7%, the lowest since March 2022. On a monthly basis, the Consumer Price Index remained unchanged. The net trade balance had a negative impact on GDP as exports grew by 0.5% , while imports increased by 1.0% . Additionally, government spending showed a slight pickup with a 0.3% increase after previously showing no growth.— Outside markets: The U.S. dollar index was higher, with the euro and British pound weaker against the greenback. The yield on the 10-year U.S. Treasury note was higher , trading around 4.48%, with a mixed-to-negative tone in global government bond yields.
— Google DeepMind unveils faster, more accurate weather forecast AI model. Google DeepMind debuted a weather forecast AI model, GraphCast, it claims is more accurate and faster than the industry's best weather systems.
The House Freedom Caucus opposed the bill for lack of spending reductions and money for the border. Bottom line: Congress just moved the deadline to January or February when the real shutdown drama could go down. So, again, Congress is dragging this process on for months. Key spending issues must be made in the months ahead. Rep. Rosa DeLauro , the top House Democrat on the Appropriations Committee, said that the two-phase CR “doubles the likelihood of future crises.
RUSSIA/UKRAINE — EU officials are discussing the reinforcement of the $60 per barrel price cap on Russian oil exports, which has raised concerns because "almost none" of Russia's oil exports are being traded below this cap. In contrast, the U.S. has different priorities, as it worries about the potential impact of stricter sanctions and enforcement on global oil prices.
— Ukraine launches insurance program for grain vessels. Ukraine has initiated an insurance program in collaboration with broker Marsh McLennan and Lloyd's of London to provide coverage for grain vessels departing from Ukraine's deep-sea ports, Bloomberg reports. This move comes shortly after a Russian missile struck a ship.
— China bolsters economy with large cash injection via one-year policy loans. China has taken significant measures to support its economy by injecting a substantial amount of cash into the financial system through one-year policy loans. The People's Bank of China initiated this move by offering 1.45 trillion yuan, which is equivalent to $200 billion. This cash injection is the largest since late 2016 and exceeds market expectations.
U.S. and China already agreed to displace fossil fuels by ramping up renewables. A detailed action plan including holding new talks and policy exchanges was released Tuesday.