Follow Paul Donovan

Telling tales of tightening

| Posted by: Paul Donovan | Tags: Paul Donovan

  • Spring in the northern hemisphere has brought with it the scent of central bank policy tightening floating on the breeze. Yellen of the Fed and Carney of the Bank of England were both very clear about the next interest rate move being up (Yellen suggesting timing as well as direction).
  • The health of the US consumer is on display today with personal income and personal consumer expenditure data. The spending figures are significant with some somewhat strange weakness in the recent retail sales figures. We are looking for a relatively good 0.2% spending figure for February.
  • Spanish consumer price inflation is expected to come out negative. Perhaps more of an issue for markets is the German consumer price data. This has surprised positively this year. That the higher CPI shocks coincided with quantitative policy is not relevant economically, but may be relevant politically.
  • The Greek government is to brief the Greek parliament on the state of negotiations with the rest of the Euro area over the German crisis. This may offer investors a chance to assess the standing of the Greek government in terms of parliamentary support, which is pertinent to the market risks around Greece at the moment.