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Sounds amidst the data silence

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  • The data calendar has pretty much nothing on it. There are two Fed speakers, but we have heard so much from Lacker and Kocherlakota of late that a surprise from either would be a surprise. Instead, markets will just have to indulge in a period of calm reflection.
  • The US is basking in the aftermath of an employment report that we would consider strong. The wage growth data caused some concern, but with a strong increase in part time seasonal retail workers (who earn below average average hourly earnings) care is needed in the interpretation.
  • The Euro area is focused on the ECB meeting next week, and whether Mr Draghi will be able to have the ECB buy Italian government bonds. However the European Court decision this Wednesday on the legality of the ECB's OMT program may shape the structure of any ECB quantitative policy.
  • Inflation data is the other focus for this week, with consumer price figures in the US, UK and Euro area. Headline and core figures will both be affected by the falling oil price - if consumers see this as a relative price change, rather than deflation, it should be positive for growth.

Listen to the audio version of this briefing.