After the pre/post US election turmoil, when the excitement has given way to the reality principle (what to do with the fiscal cliff?), the markets are stabilising. Wall Street futures are up slightly and the Asian regional index (MSCI Asia Pacific) is almost stable. Now the markets will pay more attention to news on the real economy.
In China, the slowdown in inflation – consumer prices recorded the lowest trend rate for a long time in October: 1.7% – leaves room for supportive policies. A reason for disappointment instead came from Australia where the Reserve Bank reduced its growth forecasts for 2013, citing, among other things, the Australian government's determination to squeeze a surplus out of the public finances: austerity is also affecting Australia, where in truth there would be no need.
The euro and yen strengthened slightly, as did gold, to $1736 an ounce. Oil continues at 85 $/barrel (WTI) and this relatively low level helped to improve the US trade balance in September: an improvement to which the non-oil balance also contributed, contrary to expectations, thanks to a strong increase in the 'export.
