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Central bank inaction ahead

| Posted by: Paul Donovan | Tags: Paul Donovan

  • The Bank of England meets, but markets are not looking for a change in policy yet. Interest rates seem unlikely to move – for one thing most banks only passed on the last rate cut to their customers this month, so the economic consequences of the last reduction are not yet visible.
  • Eurozone final August CPI is due. Markets will almost certainly overlook this (as the flash estimate and the national data are already published). However from September the change in the price of crude oil (year on year) turns positive, and this data will be more interesting.
  • Politics lingers in Europe as President François Hollande of France and Chancellor Angela Merkel of Germany meet to "prepare" for the next EU summit. With the imminent loss of the UK, as Europe's second-largest economy, the balance of power in the remaining EU is shifting.
  • US regional manufacturing sentiment data offers noise but is unlikely to indicate anything of substance. Retail sales should give some taste of the strength of the consumer, but it has been evident in the US that healthcare spending has been rising, which may erode retail spending.