Equity market data is driving financial markets at the moment. It has come to this – equities are assuming more importance than economists in the absence of significant macro news.
It is worth reminding ourselves of the natural order of things. Listed companies in developed markets are around 15% to 20% of domestic economic activity – and their earnings are often distorted by foreign exchange moves. Economics is supposed to take pre-eminence…
Australian consumer price inflation came out in line with expectations, rising on the quarter. Reserve Bank Governor Stevens was not really sounding like a man in a rush to ease (although ready to ease of required, because why would one not ease if one was required to?).
The Bank of England minutes are now expected to signal a somewhat more hawkish tone in the wake of some recent rhetoric from MPC members. With price discounting pressures seeming to ebb, revolving credit rising and wages also showing signs of life, we see a November rate rise.