As we discussed back in October, the September US consumer inflation number coming in higher than expectations at the time was obscuring the fact that inflation was nevertheless continuing to decline.  September’s consumer inflation reading came in higher than expected at 8.2%, but it marked yet another decline.  Inflation peaked in June at 9.1%.  In July, it fell to 8.5%.  In August, it fell to 8.3%.  And in September it fell to 8.2%.  New today is that data for October has been released and shows that inflation has fallen even further to 7.7%.  It has now fallen for four straight months, but also importantly came in lower than expected.  This time around, the global financial markets are reacting very positively. 

Separately, of note in China is that 1,185 new daily coronavirus cases were reported today.  While down from the 1,346 new cases reported yesterday, this marks only the second time since April 30th that over 1,000 new daily cases have been reported.   We continue to urge caution if anticipating any near-term reopening in China.