Week in a Glance: Inflation, Pandemic, Infrastructure Plan

15 nov 2021

The past week was quite busy for the financial markets. And if it began very positively for risky assets with the news that Congress had finally adopted Biden's infrastructure plan, then after the publication of inflation data from the United States, the mood changed radically.

Manufacturing inflation has renewed historical highs, while consumer inflation has reached its highest levels in the last 30 years. At the same time, the CPI already exceeds the Fed's target by 3 times. As a result, the markets are again thinking about tightening US monetary policy and raising rates in 2022.

We also remembered the markets and the pandemic. And although the main concern, according to the results of surveys by the Federal Reserve Bank of New York, is new strains, but so far the good old delta is enough for Germany, Greece and a number of other countries to reach new highs in the number of cases.

Another cause for concern has traditionally been the Chinese developer Evergrande. Another deadline expired on Wednesday. It seems that at the very last minute, the default was again avoided, but the future still looks extremely gloomy, since the company is simply selling itself in parts and sooner or later liquid assets will come to an end.

The reporting season continues, but last week it was not very happy: Disney and Coinbase flopped. Major US retailers as well as Nvidia are reporting this week and the season can be closed after that.

Oil was under pressure last week following the publication of monthly OPEC and EIA reports. OPEC expects a decrease in demand at the end of the year due to high oil prices, and EIA predicts a surplus in the oil market as early as 2022. So oil sales look very promising in the medium term, especially in light of the fact that the energy crisis has lost some of its severity: coal prices in China fell by 50%, and in Australia - by a third, and Russia has also increased gas supplies to Europe.

The coming week will not be rich in super important events, but there will be quite a lot of macroeconomic statistics from the Eurozone (GDP, consumer inflation) and the UK (labor market, retail sales, inflation), Canada (inflation and retail sales), China and the USA (retail sales ). So it won't be boring anyway.