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| Posted by: Paul Donovan | Tags: Paul Donovan

  • Sentiment data is due today. Business sentiment data is, ordinarily, prone to overreact to underlying economic trends. That tendency may be emphasized if some of the data was compiled after the UK referendum result.
  • The impact of the UK referendum result is felt via demand in the UK, and consequently on those that export to the UK. The impact is also felt via uncertainty in the UK and also the EU. Therefore the biggest reactions in sentiment terms should be UK and Euro area focused.
  • The Bank of England governor is delivering the financial stability report (one gets the sense that there may have been some last minute alterations). Expect reassuring noises about the Bank's willingness to provide support, and perhaps questions about London as a financial centre.
  • US durable goods orders are not really likely to capture investors' imagination at the moment. There are questions about how structural change is impacting capital spending plans, which raises questions about the insight this data offers.