Inflation's Everywhere, and Yellen Reminds of the US Default

18 בנוב׳ 2021

Yesterday was rich in inflation data from everywhere: the Eurozone, Great Britain, Canada. And decisively everywhere it grew, even relative to the already multi-year maximums. Take the UK, for example. Consumer prices there rose to their highest level in the last 10 years, and if you look at retail prices, they generally climbed to rates that have not been seen since 1991.

Naturally, everyone is now looking towards the Bank of England. Even the pound, which had been dull lately, raised its head in the hope of a rate hike at the start of 2022.

The situation in the Eurozone is not much better, but Lagarde was extremely clear in her last interview, so you can return to the idea of ​​medium-term sales of the EURGBP cross.

And although the US stock market is in a very good state after a super-successful reporting season, this does not diminish the clouds on the horizon. Let us recall the key threats today: inflation and tightening of monetary policy by leading central banks, a pandemic and new strains of the virus, and the development sector in China.

So yesterday, US Treasury Secretary Janet Yellen reminded everyone with a short memory that there is still a threat of US default. According to the latest estimates, the money from the government will end on December 15 (according to previous estimates, the deadline was December 3). That is, if in the near future Congress does not raise the ceiling of public debt, it will not seem enough to anyone. First of all, the totally overvalued US stock market.

We will remind, the Republicans publicly refused the new vote in conjunction with the Democrats. So very soon the focus of the markets may shift from the topic of the successful reporting season to the topic of default.