It ain't what you do, it's the way that you do it
- OPEC agreed to a production cut at its informal gathering, which was a surprise. The one tiny detail yet to be decided is how OPEC will actually cut production. Oil rallied. The fact that the Saudi government is now reacting to prices is a change of policy stance.
- The US Congress overrode President Barack Obama's veto, and has removed sovereign immunity from the Saudi government. For investors, the issue is whether this accelerates the withdrawal of Saudi investments in the US (public and private), and whether US assets in other economies are now vulnerable to similar threats.
- German initial September consumer price inflation is due. September is the start of the long march back to inflation normality, as the data shrugs off the disinflation of the oil price. The move will not all come at once, but today's data is the beginning of the end of the ultra-low inflation episode.
- There are several central bank speakers today – the range of Fed speakers raises the possibility of the ruptures within the Fed being displayed. The Fed's Janet Yellen and the ECB's Mario Draghi were both subject to tough political examination yesterday. The implicit threat to central bank independence should not be ignored.