After interest rates, inflation
- The Greco-German crisis in 45 seconds. The Greek PM expects nothing from Ecofin (he will probably get nothing) and wants a heads of government meeting. The Greek central bank is warning that default leads to the dark side. The ECB extended more liquidity to Greek banks, which is what really matters.
- The US FOMC has seemingly endorsed (again) the idea of a September rate increase, although there has been a moderation in market expectations about the pace of tightening in 2016 – this raises the interesting question of what that means for quantitative policy.
- US consumer price inflation data is due. US CPI is calculated in a very different way from European CPI (they have little in common) and it is not a target for the Fed. CPI has, however, surprised on the upside consistently this year. Moreover fiscal indexation and the TIPS market make it relevant for bond investors.
- Chinese house prices continue to decline, according to the latest data, although the pace of decline is slowing somewhat.