No. 1US inflation
New York Fed survey shows one-year inflation expectations at 3.9%, a 2023 high
The New York Fed's September consumer survey put median 12-month inflation expectations at 3.9%, up 0.3 point from August and the highest since May 2023. Expected household spending growth also rose 0.3 point, to 5.5%. Longer horizons look steadier: three-year expectations edged up to 3.3% and five-year held at 3%. Market gauges are less comforting, with the five-year breakeven near its yearly high of 2.35%. Markets largely expect the Fed to hold at its October meeting, with the funds rate at 3.75%-4%. Futures imply 5.58% in five years, a far tougher path than the one the Fed is signalling for now.
Why it mattersWatch the gap between calm survey expectations and the bond market's pricing of a much higher policy rate ahead.
Full story at Economy →No. 2India
Reserve Bank of India raises rates for the first time since 2023
The RBI lifted its repo rate 25 basis points to 5.50%, as economists expected, and moved its stance to "calibrated tightening". Retail inflation has risen for 10 straight months, reaching 4.8% in August against a 4% target. Governor Sanjay Malhotra said the next move can only be a hike or a pause. HSBC and Goldman Sachs both expect another hike in December. The bank raised its growth forecast by 40 basis points to 7.1%, though India imports nearly 85% of its fuel and is exposed to Iran-war supply disruption. The 10-year yield rose 5 basis points to 7.243% and the Nifty 50 fell 0.7%.
Why it mattersYou should read this as another major central bank tightening against energy-driven inflation, with India's fuel import dependence the main vulnerability.
Full story at Economy →No. 3Libor
Five ex-Barclays traders have Libor and Euribor convictions quashed
The Court of Appeal on Wednesday overturned the convictions of Jay Merchant, Jonathan Mathew, Philippe Moryoussef, Alex Pabon and Colin Bermingham. Each had been convicted of one count of conspiracy to defraud over attempts to influence benchmark rates. The Serious Fraud Office did not oppose the appeals. The ruling follows the earlier clearing of ex-UBS trader Tom Hayes and Carlo Palombo, which opened the way for these challenges. Only Christian Bittar and Peter Johnson still hold convictions. Bittar's challenge is set for 9 October, and Johnson also hopes to appeal. Lord Justice Edis said full reasons would follow later on Wednesday.
Why it mattersNote that the prosecutions that defined post-crisis banker accountability are now almost entirely unwound, and the court's full reasoning is still to come.
Full story at BBC News →No. 4Japan
Japan's competition regulator raids major brewers over alleged price-fixing
The Japan Fair Trade Commission searched the premises of Asahi, Kirin and Suntory Spirits, and Sapporo was reportedly raided too. The Japan Times says the inquiry centres on price increases in April last year and October 2022. The companies had cited higher raw material, energy and transport costs. Kirin said the suspected breach is of the Antimonopoly Act. It said the financial impact has not been determined. All four companies said they would cooperate with the inquiry. Asahi, Kirin and Sapporo shares fell on Wednesday, while Suntory is not listed.
Why it mattersCheck exposure to Japanese consumer staples, since a cartel finding could bring penalties and tighter scrutiny of pricing.
Full story at BBC News →