Eurozone inflation fell from an all-time high of 10.6% to 10.0% year-on-year in November, the first decrease for 17 months. Whilst the fall was 0.4% larger than analysts had predicted, inflation may not yet have peaked, as a large driver behind the decrease was a one-off discount to energy bills in the Netherlands that caused the annual increase in energy costs to fall from 99.7% to 41.6%.<\/p>\n
Core inflation, which strips out energy prices and is generally viewed as having \u2018sticky\u2019 price increases, remained at its all-time high of a 5.0% year-on-year increase. Having raised rates by 0.75% at the past two meetings, many economists now predict that the European Central Bank will opt for a 0.50% rise at their next meeting on 15 December.<\/p>\n
The US economy remains robust, despite the Federal Reserve\u2019s (Fed\u2019s) aggressive interest rate rises. November\u2019s economic data release revealed stronger-than-expected growth in both employment and the services sector.<\/p>\n
Non-farm payrolls rose by 263,000 vs a forecast of 200,000 but less than the 284,000 added in October. However, unemployment remains stubbornly low at 3.7%, leading to speculation that the Fed is unlikely to relax their rate hiking programme any time soon.<\/p>\n
At the same time, inflationary pressures remain, particularly in the services sector, where there are signs of increasing domestic demand and few indications that cost-push inflation is easing. Fed Chair, Jerome Powell, has indicated that policymakers are particularly concerned with inflationary pressures in \u2018core services\u2019 outside of housing, thus adding to a mixed picture regarding interest rate expectations.<\/p>\n
It was a marginally positive week across most equity markets, with the MSCI All Country World index ending the week up over 1%. The largest gains were seen in China, where the MSCI China ended up almost 9%, after increased speculation that the zero-Covid policies may be eased in the face of growing discontent.<\/p>\n
Important information<\/strong><\/p>\n All details in this article are provided for information purposes only and should not be misinterpreted as investment advice or taxation advice.<\/p>\n Where the data in this article comes partially from third party sources the accuracy, completeness or correctness of the information contained in this publication is not guaranteed, and third-party data is provided without any warranties of any kind.\u00a0 Sarasin & Partners LLP shall have no liability in connection with third party data.<\/p>\n \u00a9 2022 Sarasin & Partners LLP \u2013 all rights reserved.\u00a0 This article can only be distributed or reproduced with permission from Sarasin & Partners LLP.<\/p>\n","protected":false},"excerpt":{"rendered":" It's been a marginally positive week across equity markets. Read on to see how the last week has unfolded... Eurozone inflation surprises to the downside: have we passed the peak? Eurozone inflation fell from an all-time high of 10.6% to 10.0% year-on-year in November, the first decrease for 17 months. Whilst the fall was 0.4%...<\/p>\n","protected":false},"author":73,"featured_media":12904,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[28],"tags":[],"coauthors":[191],"class_list":["post-7073","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-markets"],"yoast_head":"\n