UK CPI growth slows to the lowest in two years

The US dollar

The USD dropped and US indices jumped after US consumer price index (CPI) data didn't rise as much as anticipated. The US consumer price index rose 3.2% year-over-year (YoY) in October, down from 3.7% in September and below the forecast of 3.3%. The core CPI rose 4% on an annual basis in October, down from September's 4.1%. Traders erased any expectations that the Fed would raise rates further and added to their bets that rate cuts could begin in the first half of next year. Markets now price in around a 60% chance that the Fed will cut interest rates by May next year.

The Japanese economy

The Japanese economy shrank 0.5% in Q3 quarter-over-quarter (QoQ), worse than market forecasts of a 0.1% decline and after a 1.1% growth in Q2. This was the first gross domestic product (GDP) contraction since Q4 of 2022. Private consumption, which accounts for more than half of the economy, remained flat, missing estimates of a 0.2% rise. Capital expenditure unexpectedly fell for the second straight quarter, by 0.6%, compared with the consensus of 0.3% growth.

China's economy

China's economic activity perked up in October. China's industrial output grew the fastest since April, up 4.6% in October year-on-year, accelerating from the 4.5% pace recorded in September and beating expectations for a 4.4% increase. Retail sales rose 7.6% in October, quickening from a 5.5% gain in September and hitting the fastest growth since May. Analysts had expected retail sales to grow by 7%. However, some analysts note that the property sector remains a weak link for the economy and fear that the lack of major reforms will prevent a sustainable, longer-term revival.

UK consumer price inflation

UK consumer price inflation fell to a lower-than-expected 4.6% in October from 6.7% in September. The increase in consumer prices was the smallest since October 2021. Annual core inflation fell to 5.7% from 6.1%. Elsewhere on the equity market, Tullow Oil trims its 2023 production forecast. The group cites delays in the Jubilee South-East extension and reduced water injection. Experian reports an increase in half-yearly profit, benefiting from sustained demand in key markets in North America and Europe.

Target

Over in the US, Target is due to publish its quarterly report before the market opens. Analysts expect earnings per share (EPS) of $1.46 on revenue of $25.29 billion of $1.46 on revenue of $25.29 billion. This compares to EPS of $1.54 and revenue of $26.5 billion a year ago. Guidance will be key. Three months ago, Target stated it expected sales to decline slightly for the rest of the year. During that period, Target shares fell by about 16%. Now near the low of the year, some analysts have a bullish long-term view on the stock. The holiday season is coming up, and yesterday's inflation data raised the possibility of interest rates being cut next year.

Cisco

Tonight, after the US closing bell, one all-session stock is due to report. It's Cisco's fiscal first quarter. The Street anticipates quarterly earnings of $1.03 per share, which would be a year-on-year increase of 19.8%. Revenues are expected to rise by 7.2% to $14.62 billion. Analysts forecast revenue in Cisco Products to rise by 8.5% to $11.12 billion. The much smaller'services' segment' is seen rising by 2.9% to $3.48 billion. Investors will be keen to hear the group's guidance for the current fiscal year, especially after it announced a few weeks ago the launch of meeting room devices powered by NVIDIA's Al engine.