Inflationary pressures are rising sharply in Australia. Corporate earnings keep indices from falling

In the Middle East, French President Macron met with Prime Minister Netanyahu in Israel on Tuesday before calling for an international coalition to fight Hamas and warning other Iranian-backed militant groups against opening new fronts in the war between Israel and Hamas.

The Eurozone manufacturing PMI for October unexpectedly fell by 0.4 to 43.0, weaker than expectations of a rise to 43.7. The German GfK consumer confidence index for November fell by 1.4 to a 7-month low of 28.1, weaker than expectations of 27.0. In her speech yesterday, ECB President Lagarde told the Presidents of the European Commission, European Council, and Eurogroup that stagnation and downside risks await the Eurozone economy in the next few quarters, although inflation risks have become more balanced.

Asian markets were predominantly up yesterday. Japan’s Nikkei 225 (JP225) increased by 0.20%, China’s FTSE China A50 (CHA50) added 0.03%, Hong Kong’s Hang Seng (HK50) ended the day down by 1.05%, and Australia’s ASX 200 (AU200) ended Tuesday positive 0.19%. Chinese stocks continued their recovery rally on Wednesday after the government announced plans for a massive bond issue. Beijing announced plans to issue 1 trillion yuan ($1=7.3088 yuan) worth of government bonds to support the economy. Nevertheless, Chinese stocks remain near 2023 lows, having suffered significant losses on fears of slowing economic growth and a collapse in the real estate market. Despite Wednesday’s optimism, the factors that drove domestic markets lower are still in place.

Japan’s business activity index for the manufacturing sector for October was unchanged at 48.5. The services PMI for October fell by 2.7 to 51.1, the lowest reading in 10 months.

In Australia, the consumer price index unexpectedly rose. In annual terms, the inflation rate rose from 5.2% to 5.6%. In quarterly terms, the index rose from 0.8% to 1.2%. Such data gives grounds for further interest rate increase by the Reserve Bank of Australia next week.