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Lots of noise. Less substance

| Posted by: Paul Donovan | Tags: Paul Donovan

  • Greece's parliament meets to discuss the creditor terms, as the IMF gets all critical about the deal (no debt reduction is not good, it seems). The Greek prime minister has been making speeches to the domestic audience – he should perhaps remember the need to win the trust of the German Bundestag too.
  • The main lesson from markets from this, perhaps, is that understanding political risk continues to rise in importance as a driver of investment. That in turn perhaps means that the parochialisation of capital rather than the globalisation of capital will continue.
  • Yellen testifies to Congress, and we would expect her to continue to signal that monetary policy tightening will join quantitative policy tightening as a tool for the Fed this year. Yesterday's retail sales were a little weaker than expected, but not in a way that derails growth.
  • Chinese GDP came in at 7% yoy (funnily enough the Chinese government target for GDP is 7% yoy for this year). Of course, equity moves had no discernible impact on the economic data. Interestingly retail sales were strong, again, supporting the idea of a rising consumer share of GDP.