UK inflation declines unexpectedly in September

CAD to hit 1.3% on commodity price rise: BofA

Concerns about current account deficit (CAD) and its serviceability have resurfaced

Rising global commodity prices will shave a lot off the current account leading to higher imports and a rise in current account deficit, which is likely to print at 1.3% of the GDP, according to a report by Bank of America Securities (BofA).

Given the sharp increase in global commodity prices, particularly oil, concerns about current account deficit (CAD) and its serviceability have resurfaced, the report said.

“But, we see FY22 CAD at 1.3% of GDP or $40 billion, up from a 0.9% surplus in FY21, but still well-contained under the threshold of 2.5% of GDP,” BofA said on Tuesday.

Syria: 13 killed and three injured after explosion destroys bus in Damascus

At least 13 people have been killed after an explosion destroyed a bus in the Syrian capital of Damascus.

A local television station said two explosive devices went off as the bus was on the Hafez al Assad bridge – and a third device was being defused by an army engineering unit.

European Economics Preview: UK Monthly GDP Data Due

Monthly GDP estimate from the UK and industrial production from euro area are due on Wednesday, headlining a light day for the European economic news.

At 2.00 am ET, the Office for National Statistics releases UK GDP, industrial and construction output and foreign trade figures. The economy is forecast to grow 0.5 percent on month in August, following a 0.1 percent rise in July.

The UK visible trade deficit is seen at GBP 12 billion in August versus -GBP 12.7 billion in July.

Also, Germany’s final consumer prices are due at 2.00 AM ET. Final inflation is seen at 4.1 percent in September, unchanged from the flash estimate.

At 4.00 am ET, industrial output data is due from Poland.

At 5.00 am ET, Eurostat publishes euro area industrial production for August. Economists expect industrial output to fall 1.6 percent on month, reversing a 1.5 percent rise in July.

In the meantime, Greece unemployment data is due.

Wendel in talks to sell paints company Cromology to DuluxGroup

PARIS (Reuters) – French holding company Wendel said it was in exclusive talks to sell decorative paints specialist Cromology to DuluxGroup, after Dulux made an offer giving Cromology an entreprise value of 1.26 billion euros ($1.47 billion).

“The closing of the transaction should take place during the first half of 2022, subject to customary regulatory approvals,” Wendel said in a statement.

Since 2019, DuluxGroup has been part of Japan’s Nippon Paint, the world’s fourth largest paint company.

($1 = 0.8594 euros)

Trevor Noah Talks ‘Striketober’

“The Daily Show” host joked that jobs are “how Americans prove that they deserve health care.”

By Trish Bendix

Gold Futures Settle Higher As Dollar Loses Ground

After posting losses in the previous two session, gold futures settled higher on Tuesday, as the dollar lost ground against its major rivals with disappointing U.S. industrial production data easing fears about inflation and tightening of monetary policy.

Weighed down by weak data, bond yields declined and the dollar index slid to a three-week low.

The dollar index dropped to 93.50 in the European session before regaining some lost ground. The index was hovering around 93.70 by 1.30 PM ET, down nearly 0.3% from the previous close.

Gold futures for December ended higher by $4.80 or about 0.3% at $1,770.50 an ounce.

Silver futures for December closed up by $0.619 at $23.883 an ounce, while Copper futures for December settled at $4.7030 per pound, down $0.0225 from the previous close.

A report from the Federal Reserve Monday showed an unexpected steep drop in industrial production in the month of September.

The Fed said industrial production tumbled by 1.3% in September following a revised 0.1% dip in August.

The sharp decline surprised economists, who had expected industrial production to edge up by 0.2% compared to the 0.4% increase originally reported for the previous month.

Nestlé 9-month Organic Growth In Sales At 7.6%; Raises Full Year Organic Sales Growth Outlook

Nestlé (NSRGY.PK,NSTR.L) said it recorded strong organic growth in the nine months, driven by broad-based contributions from most geographies and categories. Organic growth in sales was 7.6%, with RIG or real internal growth of 6.0% and pricing of 1.6%. Organic growth was 7.1% in developed markets, while organic growth in emerging markets was 8.3%, for the period. By product category, the largest contributor to organic growth was coffee, the Group said.

For the nine-month period, total reported sales increased by 2.2% to 63.3 billion Swiss francs from 61.9 billion francs, previous year. Net divestitures decreased sales by 3.3%. The negative impact on sales from foreign exchange was 2.0%. Starbucks products recorded 15.5% growth, with sales of 2.2 billion francs.

Mark Schneider, Nestlé CEO, stated: “In the third quarter, we increased pricing in a responsible manner, while maintaining strong real internal growth.”

For the full year 2021, the company expects organic sales growth between 6% and 7%. The underlying trading operating profit margin is expected around 17.5%. Beyond 2021, the company’s mid-term outlook for continued moderate margin improvement remains unchanged. Underlying earnings per share in constant currency and capital efficiency are expected to increase this year, the Group said.

UK inflation declines unexpectedly in September

  • Consumer prices rose 3.1% in annual terms in September, easing back from 3.2% in August, the Office for National Statistics said.
  • A Reuters poll of economists had pointed to inflation of 3.2% in September although 11 of the 34 analysts who took part had predicted a slowing in the rate of price growth.

British inflation slowed unexpectedly last month but the decline probably marked a temporary respite for consumers and the Bank of England is expected to address the acceleration by raising interests rates, possibly in two weeks.

Consumer prices rose 3.1% in annual terms in September, easing back from 3.2% in August, the Office for National Statistics said.

A Reuters poll of economists had pointed to inflation of 3.2% in September although 11 of the 34 analysts who took part had predicted a slowing in the rate of price growth.

The hospitality sector was the largest drag on inflation last month – the result of the "Eat Out to Help Out" restaurant meal subsidy scheme launched in August 2020 dropping out of the annual comparison.

Last month the BoE said it expected inflation to rise slightly above 4% in the last quarter of 2021 but since then energy prices have continued to rise sharply.

On Sunday, BoE Governor Andrew Bailey sent a latest signal that the British central bank was gearing up to raise rates for the first time since the onset of the coronavirus crisis as the risks from inflation mounted.