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CPI, Powell, Trump on the schedule today

  
  Analysis
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Powell addresses the joint economic committee of Congress

The schedule today is full with a few more releases and events than the prior 2 days (when there were no economic releases scheduled).

The scheduled for the day includes:
  • US CPI for the month of October.  8:30 AM ET/1330 GMT. MoM estimate 0.3% versus 0.0% last month.  Ex food and energy MoM 0.2% versus 0.1% last month. YoY headline 1.7% estimate versus 1.7% last month. Ex food and energy YoY 2.4% estimate versus 2.4% last month.
  • Real average weekly earnings for October and real average hourly earnings YoY will be released with the CPI.  Last month they rose by 1.0% at 1.3% respectively
  • Yesterday, Pres. Trump address the Economic Club of New York. Today the public impeachment inquiry will begin at 10 AM ET/1500 GMT.
  • At 11 AM ET/1600 GMT, Fed chair Jay Powell will address the joint economic committee of Congress.  The Federal Reserve as cut rates 3 times (25 basis points each) in 2019 after last raising rates by 25 basis points in December 2018.  The Pres. remains critical of the policy by the Fed.  The prepared text is not expected to be released ahead of his scheduled testimony at 8:30 AM ET (but will be prepared anyway just in case).
  • The monthly budget statement will be released at 2 PM ET/1900 GMT.  The estimate is for a budget deficit of $-130 billion. That compares to your co-level of $-100.5 billion

India’s corporate tax cuts credit negative, will widen fiscal deficit: S&P

  
Analysis, Economy
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Rating firm S&P Global said on Friday India’s move to cut corporate tax rates was a “credit negative development” despite potentially boosting the broader economy as it will widen its fiscal deficit.

The cuts are likely to “boost sentiment and support the broader economy at a time when momentum is flagging”, said Andrew Wood, director of sovereign and international public finance ratings at S&P Global Ratings.

“Nevertheless, we believe that the cuts will invariably lead to higher central and general government fiscal deficits, absent equivalent revenue generating measures,” Wood told Reuters.

The Indian government slashed corporate taxes on Friday, giving a surprise $20.5 billion break aimed at reviving private investment and lifting growth from a six-year low that has caused job losses and fuelled discontent in the countryside.

The news sent shares sharply higher, but bond yields spiked to a near three-month peak on speculation that the government may have to borrow more to meet its expenditure needs, as the measures will mean a revenue loss of 1.45 trillion rupees for the current year.

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