Action from central banks
- The illusion of Abenomics seems to be wearing ever thinner. Consumer price data was a) decelerating, b) weaker than expected and c) some way away from the 2% inflation target that Mr Abe promised would be hit. It raises speculation of more Bank of Japan action.
- Discussion of US Federal Reserve action continues with hawkish Dallas Fed President Fisher sounding, well, hawkish. He suggested that rates could rise sooner rather than later, and was rather generous in assuming that the market expected an increase as early as next spring.
- US final Q2 GDP is due today (it is nothing like final, as the data will be revised for years to come). We expect a positive revision to 4.7% annualised on the back of healthcare spending normalising and better inventory numbers. Final Michigan consumer sentiment is also due.
- German GfK consumer sentiment was a little weaker than expected. From the UK Hometrack house prices rose 5% yoy - broadly in line with nominal GDP and nominal income growth. A normal housing market does not really need an abnormally accommodative monetary policy.
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