What seismic shift has taken place today?
- And today markets are down… what seismic event has happened in the world economy to reverse the moves of Asian equities and oil prices? No seismic event has happened. The world economy is remarkably placid.
- The moves in Chinese equities are being attributed to capital outflows, which is more of a truism than an explanation and adds little to the intellectual debate. Nonetheless one can regard the moves as "good" if they bring markets closer to fundamental value.
- Carney of the Bank of England speaks on the topic of the financial stability report – which talked of capital requirement changes, a policy move that Carney has equated to monetary policy tightening in the past.
- US consumer confidence is unlikely to show too much of a reaction to the equity moves. Rising house prices (data also due) more than offset the wealth effects. There is also services PMI data scheduled, along with the Richmond Fed survey.