All I Want for Christmas Is My 2% Inflation. 🎄

Consumer prices lower than expected across the board.

Key: 블룸버그에 추정치를 제공한 65개의 하우스 중 오직 8개 하우스만 핵심 물가 지표의 전월 대비 증가가 +0.2%에 그칠 것으로 예상했음.

Only 8 among 65 forecasters in Bloomberg’s survey anticipated a 0.2% core monthly CPI increase.

Horizon: 미국 중앙은행이 원하는 물가 목표치에서 여전히 멀지만, 핵심 물가 지표가 전년 대비 4% 증가에 그친 것은 2021년 9월 이후 가장 적은 증가율임.

The 4% year-on-year increase in core prices is the smallest since September 2021. We are still quite some ways from the Fed’s target, but there’s at least some incremental progress.

Rates: 물가 지표 이후 금리시장의 가격 반응은 i) 중앙은행의 금리인상 주기가 막을 내렸으며, ii) 내년 금리인하 폭을 100bp(4회)에 가깝게 책정하고 있음.

The rate market is signaling that the tightening cycle has effectively ended, with the OIS market pricing in a mere 12% chance of a hike by January. Meanwhile, they’ve priced in rate cuts of about 92 bps by December 2024.

On a monthly basis, energy costs and core goods provided some disinflationary pressure for the first time since May, and service inflation eased from the prior month.

Implication: 중앙은행의 정책금리에 현재의 물가 추세를 대입하면 실질 정책금리는 1.50%가 됨. 만일 이대로 물가가 지속 하락 할 경우 중앙은행은 실질 정책금리가 너무 높은 것을 상쇄하기 위해 금리인하를 해야 한다는 사실에 시장 참여자들은 베팅 중인 것임.

With inflation falling, the real fed funds rate is tightening. Using Core CPI at 4%, the inflation-adjusted policy rate is at about 1.5%. Should inflation continue to cool next year, the Fed may need to bring the rate down to offset the tightening of the real rate. That’s what the market is betting on.

“The CPI print suggests ‘higher for longer’ might not be as long as some feared.”

UK inflation tumbled to the lowest level in two years, prompting investors to firm up bets that the Bank of England will be able to cut rates as early as the Spring of next year.

Rate-Cut Euphoria. ✂️

Horizon: 2020년 4월 이후 생산자물가가 가장 크게 하락함에 따라 물가 압력이 덜해진단 증거를 추가시킴.

Prices paid to US producers unexpectedly declined in October by the most since April 2020, adding to evidence that inflationary pressures are abating across the economy.

Implication: 물가상승 압력 완화에 소매판매 예상치 상회가 엇갈림을 줌. 다만, 이는 위험자산 투자자들에게 위험선호 성향을 낮추기보다, 되려 너무 뜨겁지도 차갑지도 않은 투자 적기(Goldilocks)란 생각을 줄 것임.

The disinflation narrative got a further fillip with the release of a PPI report that shows lower-than-expected producer price rises across every cohort on a m/m basis. The retail sales headline data was a little mixed, but in aggregate the figures look a bit stronger than expected once revisions are taken into account. Needless to say, that’s a kind of Goldilocks combo that should do little to derail the asset-market enthusiasm.

Chinese President Xi Jinping says in a speech in San Francisco that China will not fight a cold war or a hot war with anyone.

Microsoft closed at a record high after hiring OpenAI co-founders Sam Altman and Greg Brockman. US stocks rose overall, with the S&P 500 closing at its highest level since August.

• Nvidia

In the fiscal third quarter, which ended Oct. 29, revenue more than tripled to $18.1 billion, the company said. Profit was $4.02 a share, minus certain items. Analysts had predicted sales of about $16 billion and earnings of $3.36 a share.

Nvidia’s data center division, the star performer in its operations, had $14.5 billion of revenue, up 279% from the same period a year earlier. The company’s personal computer unit, meanwhile, has rebounded from an industrywide slowdown. Its revenue rose 81% to $2.86 billion.

Nvidia’s success in selling AI chips to companies such as Microsoft Corp. and Alphabet Inc.’s.