US inflation acceleration

Mixed to good data, US stocks bounce.

Fed is signalling big hikes in 2022.

Australian Capex seriously soft.

Australian Capital Expenditure suffered a steep contraction in the third quarter and things are going to be pretty ugly for the current quarter as well. We know the economy suffered lockdowns, but the point keeps getting missed that the Australian economy was already slowing before the latest round of lockdowns began.

These are national figures, and while the most populated states of NSW and Victoria where heavily impacted, we should have seen a better result if all other States were powering on. They were not.

My warning remains that there are far more deeply seated challenges facing the Australian economy, than the initial post lockdown massive stimulus surge data allowed others to see.

The abyss of fresh economic activity now facing us,

post-the stimulus suck forward into last year,

is a very scary thing indeed.

The RBA will be forced to hike rates in 2022, in a sub-trend quite modest economic growth period. The Australian stock market and currency are already under-performing or falling fast, and these are the major macro-market trends of the foreseeable future.

US Durable Goods Orders contracted for the second month in a row.

US Personal Consumption Price Index, below, a good handle on inflationary pressures, actually accelerated.

This is a worrying combination. despite other strong data.

The slightly firm home sales data could be a sign people are again fleeing the cities, but this time permanently to more regional centres.

New Weekly Jobs Claims collapsed back into normal, and even to a 59 year low. Holiday season hiring being the likely major factor here. That could well reverse after the season.

The World is Hiking Rates while the RBA dribbles.

South Korea, New Zealand raise rates again. The US Federal Reserve strongly shifts to it will be raising rates sooner jargon, and the RBA continues to sit on its hands.

I don't even know if they bother to go to the office?

Despite being the world's highest paid central bankers? Why? Because they organised that review and dramatic hike for themselves a few years ago. Without even telling the Treasurer of the day? He was not amused, and neither should any of us be...

 

 

A new early morning First Thoughts quick market overview.