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Euro rate cuts and relative performance

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  • the European Commission has revised down its 2014 GDP estimate to 1.1% - finally coming into line with our own forecasts. Markets seem inclined to view this as adding pressure on the ECB to cut rates, and to be sure the growth outlook will do little to remedy unemployment.
  • Today's Euro area service sector sentiment data may offer a somewhat unflattering comparison with the Anglos Saxon numbers. Both the UK and the US have shown service sector data that was both stronger than expected and strong in an absolute sense. The Euro area is seen decelerating.
  • UK industrial production is expected to pick p in September, but the manufacturing sector remains a laggard to the service sector. The impossibly nostalgic (and probably unnecessary) political concept of "rebalancing" remains elusive.
  • For the United States today offers a chance to draw in a deep breath before plunging into the GDP data (Thursday) and employment data (Friday). The BLS has been clarifying the effect of the government shutdown on the employment data �€“ the main effect being to maximise confusion.

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