A noisy racket sweeps over markets today – in other words the purchasing managers' sentiment data makes its appearance. While the broad direction of sentiment data generally correlates with the direction of the economy, such figures are prone to overreact to underlying economics.
The Euro area PMI figures should show the range of economic experience that exists within the monetary union. Germany has every reason to be cheerful, given credit, the fiscal position, and the labor market. However, political noise may distract from reported sentiment.
Meanwhile, the Italian economy sits in a different point in the cycle, with the banking system problems still likely to weigh on economic activity and sentiment. Managing so divergent a monetary union with a single central bank problem is of course a challenge.
The US has three Federal Reserve speakers on a panel. With the Federal Reserve so riven by disagreements (three wanting rates up now, three wanting no rate increases this year) the potential for entertaining debate is increased. However, the potential for market confusion also increases.