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Syria and beyond

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  • The UK Parliament debates action in Syria today, with the UN failing to agree a resolution (Russia an obstacle), and President Obama looking for a "tailored" response. Markets risk concerns seem to be moderating, perhaps because there is a more realistic assessment of the implications of the situation.
  • Oil prices have moderated somewhat, but even at the more elevated levels they should not pose a significant problem for economic recovery. If oil were to damage US consumer confidence, it is possible the US Fed would delay scaling back bond buying, without abandoning the intent.
  • Japanese retail sales were weaker than expected, and are declining over the course of the year Japanese consumers expect their incomes to fall, and import prices to rise. Declining real standards of living are not normally a big inducement to borrow and spend.
  • Euro data is Germany unemployment, French business confidence and some inflation numbers€“ investors just want the bottoming out of the economy to be confirmed. From the US there is revised Q2 GDP lower net exports are likely to result in a downward revision, but Q3 economic momentum still seems good.

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