The dangers of "anti-politics"
- Politics looms large over markets, with the Second Super Tuesday primaries in the US. One concern is the rise of politics that defines itself as being "against" issues/groups rather than "for" ideas/policies. This can undermine productivity and trend growth.
- European politics is not without its drama as German Chancellor Merkel reiterates her positions in the wake of electoral defeats. France has diluted labour market reforms in the face of opposition (the failure of reform emphasises Europe's recovery is cyclical rather than structural).
- French and Italian consumer price inflation numbers are due. These are likely to be negative but they are very definitely not likely to be deflation. Deflation is a general decline in prices, and whatever Mr Draghi may like to pretend we do not have that.
- The US offers retail sales as evidence of the strength of the US consumer, albeit with the caveat of price distortions in the headline data. There is also producer price data and the Empire State survey of regional business sentiment.