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No real change to Fed expectations

| Posted by: Paul Donovan | Tags: Paul Donovan

  • Chinese economic data came in largely as economists expected, but that is enough to get markets excited. The investment numbers continue to stagnate, but there is a claim that this reflects increased accuracy of reporting, rather than a real relative decline.
  • Comments from US Federal Reserve members have not really changed perceptions about the prospect of monetary policy tightening (quantitative policy tightening continues in the US). A signal in September and a decision in December seems the most likely outcome.
  • The US NFIB small business sentiment survey is due out. This has been criticized in the past as being vulnerable to political rather than economic sentiment influences, and in the politically charged environment of the US at the moment, that may be a distortion.
  • The German ZEW survey (which asks economists' views, and is therefore to be revered) should show anticipation of a steady pace of economic expansion. UK inflation data for August may be worth looking at for early signs of the consequences of sterling's post-referendum decline.