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Greenspan Rice-Davies

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  • The Fed's Yellen declared that equity prices were not a bubble. Not so much Alan Greenspan and "irrational exuberance" as Mandy Rice-Davies: "She would say that, wouldn't she?". To say otherwise would be to invite the suggestion that quantitative policy was building bubbles.
  • It seems to be "get France" week in the Euro area this week. A credit downgrade, negative growth, and now a critical OECD report. The OECD are not saying anything investors do not already know, but it perhaps adds fuel to those investors inclined to take a negative view of the economy.
  • Abenomics in Japan is critically dependent on corporates spending money domestically (through capex or wages). The breach of 100 on the dollar/yen does not change this as exporters are seeking profit not volume. A Reuters survey suggests very little inclination to raise capex or wages at the moment.
  • Euro CPI is expected to confirm the weakness of pricing pressures in the Euro area, which triggered the ECB policy reaction. In the US we have manufacturing sentiment from the Empire State survey, and industrial production.

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