Tonight FOMC minutes will give more insights into the thinking of the Fed. However, it may be a bit outdated as the main theme at the time of the meeting was the tight financial conditions. Since then we have seen a big decline in bond yields and a rally in equities and credit bonds.
The most important release this week will likely be US CPI for October on Tuesday, which is extra uncertain this month due to possible effects from the auto workers' strike as well as technical factors relating to health insurance premiums. Also worth watching is US retail sales on Thursday after the very strong September-print. The week also features a long-expected Xi-Biden meeting on Wednesday along with a string of Chinese data and a possible Chinese rate cut, and UK job and inflation reports.
US: Fed chair Jerome Powell yesterday said that he was not confident the Fed had reached a monetary policy stance to achieve the 2% inflation target and he thought there was still a long way to go. He also underlined that more tightening would come if needed.
Bank of Japan chair Ueda reiterated that the central bank will keep easy policy until inflation target is in sight, while adding that the order of the normalisation process for the yield curve control and negative interest rate policies had not been decided yet.
China: The October international trade data overnight was a mixed bag. Imports recovered more than expected (+3.0% y/y, consensus -4.8%), which could suggest that the recent policy easing is supporting domestic demand. But in contrast, exports fell more sharply than anticipated (-6.4% y/y, consensus -3.3%), as tightening financial conditions are restricting demand elsewhere. Overall trade balance weakened, with surplus declining to USD56.5 billion (from USD77.7).