• Inflation was centre stage last week with the core figure in the US just missing the 5% level. For once it was not higher than expected, and that was a bit of a relief. The other positive that was taken from it was the decline in the month-on-month rate i.e. we are passing the peak.

• The Fed meets this week and the expectations are that it will announce accelerated tapering, with net buying to be completed by March next year, and that the ‘dot plot’ will be brought forward by a couple of quarters. Expectations have moved to a relatively aggressive statement from the Fed. Post the ‘Powell pivot’ of the week before last some of the investment banks have revised their interest rate forecasts.

• As we approach year end the background remains equity friendly. Earnings are still being revised upwards. These have been acting as the perfect inflation hedge -as inflation has been accelerating in the second half of this year so has earnings growth. The Q4 reporting season will be kicking off in 4 weeks and the signs are that it will be another very strong quarter. In China the authorities are beginning to implement policy changes instead of just talking about them.