Properties of industrial production
- China's currency fixing has created some pressures in Asian markets – it is important to recognise that the minor weakening of the renminbi is not a competitive devaluation. A competitive devaluation requires export prices to move, not just the currency.
- US industrial production is due. The industrial sector is about three times as important to equity markets as it is to the economy. The energy sector production may be of interest, not because of its US impact but because of the read through into future oil price moves.
- Rosengren of the Fed was suggesting that rates may slow until economic data suggests higher inflation (NB, not that inflation changes, but that the data suggests inflation changes). However beneath the oil price inflation pressures have risen in the US.
- UK labour market data is due – the balance of labour market strength and wage restraint on increased labour supply is politically and economically pertinent. The Greek inflation data will likely demonstrate the divergence of the Euro economy.