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June is not too soon

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  • Fed Chair Yellen joined the steady drumbeat of Fed speakers indicating a mid-year rate hike. Her contribution was not, perhaps, as explicit as the contributions of some of her peers, but was still pretty clear. There was also a hint that the language of the FOMC statement will be altered next meeting.
  • The German crisis is resolved with a can-kicking compromise on Greek debt that was the sort of compromise markets expected. Apparently the interregnum of argument, wailing and general political hysteria was just something we all had to endure. Several parliaments (including the German, Finnish and Greek) will have to ratify this.
  • The flash estimate of China's manufacturing PMI sentiment data came out with an improvement. This is a) Chinese data and b) sentiment data which may lead to some questioning the reliability of this figure as an economic indicator, but some chose to interpret it as a sign of health in the US consumer.
  • From Germany comes news of a strong IG Metall pay settlement. German consumers have experienced a far lower standard of living than they could experience for several years now; better incomes may induce change. Pay settlements also underscore that some Euro economies face inflation pressure over the medium term.