The US Fed signalled relatively clearly that rate hikes are coming – with the data dependency caveat that everyone expected. The emphasis is labour data – and we have two employment reports and the employment cost index before the September FOMC (when we see a rate rise).
The focus on US labour market data may take the shine off of the second quarter GDP data release from the US today. Only about half the available data has been collected, and of course US GDP is generally revised substantially (up to five years after release), but the figures should show respectable growth.
Spain also offers GDP data, and there are expectations for an ongoing real recovery. Real growth is great, but in the case of countries like Spain and Italy it is also worth remembering the importance of nominal growth as relevant to debt metrics. German CPI is due – watch for any upside on food prices.
With a slight choking sound of despair, economists recognise that they may have to talk about Greece again. The profession had hoped for a vacation from this topic, but the Greek Prime Minister is muttering about possible snap elections. Not necessarily taking place, not necessarily a surprise, but it reminds us Greece has not gone away.