Dhara Ranasinghe gives a glimpse at what lies ahead.

No matter what your location, inflation is always awake.

The data on Thursday revealed that China’s factory gates prices rose at the fastest rate ever recorded in September. It was a day following figures showing another substantial increase in U.S. consumers prices.

Markets should take note that higher inflation is likely to be reacted to sooner than expected by central banks, whether they are transitory or permanent.

With minutes from the Federal Reserve meeting of last month showing that policymakers are growing concerned about inflation, investors again put forward their rate-hike predictions.

Fed Funds futures prices a possible 25-basis point increase by September. They have pulled back expectations from 2022, but not yet fully priced it.

Additionally, there are indications that the Bank of England may move prior to year-end. The prudent European Central Bank might tighten next year, while the more cautious European Central Bank could be less flexible. In contrast, the Reserve Bank of Australia, which is often dovish, could increase rates before end-2023. This trajectory doesn’t align with the guidance of the central bank.

The central bank of Singapore unexpectedly increased monetary policy on Thursday, in response to higher inflation forecasts.

The markets, which have priced in higher inflation, and a tighter outlook on monetary policy, seem to be more calm in Europe’s early stages. Asian stocks rallied overnight and U.S. stock options are also higher. While U.S. Treasury yields are a little higher than their multi-monthly highs, they remain well below the current levels.

China’s property shares declined despite concerns about the debt crisis.

Following the dismissal by three of Turkey’s central bank staffers, President Tayyip Erdan put the Turkish Lira in spotlight at record levels.

These are the key developments expected to give more direction for markets Thursday

BOJ Policymaker: No stimulus withdrawal allowed even after economic recovery

TSMC in Taiwan reports 13.8% increase in profit for Q3 due to global demand.

– Japan dissolves parliament, setting stage for general election

– Data: Spain Harmonized Inflation Rate (Sept), Canada Manufacturing Sales (Aug).

United States: Jobless Claims 4 Week Average (Oct), PPI (Sept), Initial Jobless Claims (4-Week Average), US Fed Treasury Purchases 22.5-30 Years, NY Fed Treasury Auctions 4-Week and 8-Week T-Bill

– Central Banks: Fed’s Bowman, Bostic, Barkin, Bullard, Daly and Harker, ECB’s Elderson, and BoE’s Tenreyro and Mann speak

Earnings: UnitedHealth (NYSE 🙂 Bank of America(NYSE 🙂 Wells Fargo (NYSE:) Morgan Stanley (NYSE? ) Citigroup (NYSE:), US Bancorp (NYSE:), Walgreens Boots Alliance (NASDAQ:), Fast Retailing, Domino’s Pizza.

Graphic: China’s factory gate inflation rises again – https://fingfx.thomsonreuters.com/gfx/mkt/egpbkmaygvq/PPI1410.PNG