As the dust settles, and market participants await signals on policy priorities from the incoming administration and Congress, this week's data docket and Fed speak should help inform expectations for the near-term monetary policy path. From a data perspective, Wednesday's CPI and Thursday's PPI will be the main events. On Oct CPI expectations, we expect declines in energy prices to keep the gains in headline CPI (+0.20% forecast vs. +0.18% previously) more muted than those for core (+0.26% vs. +0.31%). We are expecting slight changes in both primary (+0.26% vs. +0.28% in September) and owners' equivalent (0.34% vs +0.33%) rents. Currently we are expecting 0.21% gain for the Fed's preferred inflation measure, core PCE MoM in Oct. Initial and continuing claims both likely moved higher this week. Initial claims likely ticked up due to planned layoffs at Stellantis and Intel. On US retail sales, we expect it to rise 0.4% in October (same as September). Control-group sales which exclude cars, gas, food services, and building materials likely slowed to 0.3% growth after September’s strong 0.7% gain. In RoW data, Chinese data due 15th Nov might show some uptick due to recent stimulus packages but it is likely short lived. Zew Survey might also disappoint after Trump coming to power as well as German Chancellor Olaf Scholz calling a snap election. In UK data, the upcoming UK jobs data will give the Bank of England one more reason to tread carefully on rate cuts. Pay gains are set to continue to move in the right direction from the central bank’s perspective, but only slowly.
