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Testimony time (and the referendum, still)

| Posted by: Paul Donovan | Tags: Paul Donovan

  • The German ZEW is the lone economic data release of note today – and sentiment data is not necessarily the most reliable of indicators. Nonetheless the German economy is currently relatively well positioned, with consumers spending and export volumes holding up.
  • The UK referendum is with us all week. Three opinion polls out overnight essentially give equal probabilities to the two sides. The currency markets reacted strongly yesterday after a better performance of "remain" in the weekend's polls.
  • Yellen of the Fed is due to testify to the US Senate, offering an opportunity to explain the rather flip-flop approach to policy that the Fed seems to have adopted as of late. Labour market questions seem likely, given the political climate.
  • Draghi of the ECB is due to testify to the EU parliament. In theory this should carry as much weight as Yellen's testimony. In practice it does not. Maybe this is the relative cyclical position, maybe the relative weight of the currencies as reserves, but the attention is with Yellen.