G20 and US employment. What excitement.
- The G20 meets. A pre-agreed statement will be issued. Leaders will jostle to be next to US President Obama in the group photo. Surely it is time to save G20 taxpayers the expense of flying their leaders around the world, and replace the G20 with an e-mail chain and Photoshop?
- The US employment report is due. There is speculation that this single data point may determine the timing of the Fed's next rate move. Economically, that is an absurd suggestion. One highly revised figure should not dictate medium-term policy – it is underlying trends that should dictate policy.
- Unfortunately the Yellen Fed seems to place more weight than is appropriate on market moves. While the data may say little constructive about medium-term direction, the Fed may react to the markets reacting to a single highly revised figure.
- There is little other data today. The Eurozone offers producer price inflation. This is interesting as it reveals the impact of currency moves on inflation, and (as most companies sell to other companies, not to consumers) demonstrates pricing power and profitability. However, it is not a focus for the ECB.