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What lies beneath

| Posted by: Paul Donovan | Tags: Paul Donovan

  • US inflation is hardly at levels to invoke the memory of Weimar Germany. However the steady pace with which core inflation has risen over the past year is indicative of growing inflation pressures beneath the drama of the gyrations of the oil market.
  • Business sentiment (purchasing managers') surveys are due in Europe. These surveys do have a tendency to overreact to underlying economics, but with policymakers looking for the impact of markets in the real world the data may have heightened importance.
  • China shuffled its regulators over the weekend, in a move financial markets have chosen to interpret as signalling a desire to have better control over the current situation (and thus a positive development).
  • The date for the UK referendum on EU membership has been set. Sterling has weakened on the news that the mayor of London (not the Lord Mayor of London, who is another person entirely) is against remaining in the EU.