The Dow Jones Industrial Average was up 1.1% in early deals while the S&P 500 traded 1.2% higher. The Nasdaq Composite was also up 1%.
— Karen Gilchrist
Lagarde: ECB may tighten policy faster if high inflation persists
The European Central Bank is prepared to tighten monetary policy more aggressively if the current record-high rate of inflation persists and expectations spike, President Christine Lagarde said in a speech in Estonia on Friday.
“If we were to see, for example, inflation becoming more persistent and expectations being at risk of de-anchoring, we could not wait until the full impact of the policy measures materializes,” Lagarde said.
“We would need to take additional actions until we are more confident that inflation will return to target in a timely manner.”
– Elliot Smith
Jobs report a ‘nail in the coffin’ of Fed pivot hopes
Friday’s strong U.S. jobs report was “another nail in the coffin” of hopes for a dovish monetary policy pivot from the U.S. Federal Reserve, according to Ron Temple, head of U.S. equities at Lazard Asset Management.
“The U.S. economy continues to create far more jobs than population growth can accommodate, putting more upward pressure on wages and prices,” Temple said.
“The Fed has attacked the inflation challenge aggressively, but will be forced to remain on the offensive as long as the labour markets remain resilient.”
– Elliot Smith
U.S. payrolls surged by 261,000 in October
Bank of England chief economist warns of ‘difficult trade-offs’ for inflation to hit 2%
Huw Pill, chief economist at the Bank of England, discusses the central bank’s latest rate hike and the tricky balancing act of tightening monetary policy combined with economic risks.
Euro zone data deepens fears of winter recession
October’s final S&P Global PMI (purchasing managers’ index) reading for the euro zone — seen as a reliable gauge of economic health — painted a bleak picture on Friday as high inflation and fears of a worsening energy crisis hammered demand.
The final composite PMI reading — which captures services and manufacturing — dropped to a 23-month low of 47.3 in October, down from 48.1 in September, with anything below 50 indicating a contraction. However, the reading was slightly above a preliminary estimate of 47.1.
– Elliot Smith
Stocks on the move: Andritz up 10%, Leonardo down 6%
Though earnings season is winding down, third-quarter reports remained a key driver of individual share price action in Europe on Friday.
Andritz shares jumped 10.8% by early afternoon to lead the Stoxx 600 after the Austrian industrial group massively exceeded third-quarter earnings expectations.
At the bottom of the index, Swedish real estate company SBB fell 8%, while Italian aerospace and defense company Leonardo dropped more than 6% after its third-quarter trading update.
Bank of England chief economist hints that traders have it wrong
The Bank of England remains committed to its “key goal” of bringing down inflation, but hopes markets will “re-anchor” their interest rate expectations, Chief Economist Huw Pill told CNBC on Friday.
What we are seeking to do, we’re always seeking to do this, is to find that balance that gets us back to our 2% inflation target without generating unnecessary and costly problems in the real side of the economy,” Pill said.