It’s a packed week ahead with U.S. inflation data, the start of Q3 earnings, a French budget and possibly a big rate cut from New Zealand.
Global markets have remained broadly unfazed. Oil prices, the main conduit for tremors further afield, have jumped about 8% this week, but soft demand and ample supply globally have kept a lid on gains. A further escalation between Iran and Israel could change that, especially if Israel strikes Iran’s oil facilities, an option that U.S. President Joe Biden said was under discussion.
Thursday’s September U.S. consumer price index, meanwhile, will be closely watched for signs that inflation is moderating. It reckons spending cuts and tax hikes should bring the deficit, seen rising to 6.1% this year in the latest upward revision, to 5% by end-2025. The target date for reaching the euro zone’s 3% deficit limit is also being pushed back to 2029 from 2027.Markets are not impressed. Having eased slightly, the extra premium France pays for its 10-year debt over Germany’s widened back to just under 80 bps, near its highest since August.