Time for some grown up economics
- Before we get to grown up economics and the US, the Euro area is offering M3 money supply data. This is of some importance as it serves as a barometer for the success (or otherwise) of Mr Draghi's awfully big idea of quantitative policy.
- German inflation is also due, having surprised on the upside for three consecutive months already. The surprises in inflation are domestic driven, and obviously nothing to do with quantitative policy, but that will not necessarily deter German hostility to the ECB.
- US Q1 growth is due, forecast at 1% annualised. Lots of factors are at play - weather, capital spending in the energy sector, the dollar etc. It is also worth bearing in mind that only around half the data is actually collected by this stage, allowing scope for revision.
- The US Fed is likely to be held steady by the slower economic growth, but is unlikely to be deterred from additional tightening later this year. US growth will rise. US employment will rise. US inflation will rise. What US rates should do seems obvious.