Fed commentary awaited amid CPI focus

A lineup of Federal Reserve officials is set to provide insights today, potentially clarifying the Fed’s approach as markets seek signals on the pace of future policy easing. However, markets’ primary focus remains on tomorrow’s U.S. CPI release. While a 25-basis-point cut in December is widely anticipated to close out the year, the outlook for rate cuts in 2025 remains uncertain.

Oil steadies as OPEC revises demand forecast lower

WTI crude oil prices held at $68 per barrel after OPEC reduced its 2024 global demand growth forecast to 1.82 million barrels per day, down from 1.93 million in the previous forecast. This marks the fourth straight revision downward, driven by weaker demand signals from major consumers such as China.

ECB’s Rehn hints at policy shift by late winter

Speaking at a conference, ECB Governing Council member Olli Rehn indicated that the path toward monetary easing is "clear," while noting that the “speed and scope” will hinge on inflation trends, core inflation, and the effectiveness of policy transmission. Rehn suggested that, data permitting, the ECB could lower its deposit rate from the current 3.25% by late winter or early spring, moving toward a more neutral stance. However, he added that this timing is merely an observation, not a formal commitment.

BoE’s Pill highlights persistent wage and inflationary pressures

At a conference, Bank of England Chief Economist Huw Pill pointed to today’s UK labor data, noting that wage growth remains “sticky at elevated levels,” which he sees as “challenging” for meeting the inflation target amid current productivity growth trends. He acknowledged recent disinflationary progress, allowing for a degree of policy relaxation, but warned that underlying inflationary pressures persist in the UK economy.