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Presidents, chairs and governors

| Posted by: Paul Donovan | Tags: Paul Donovan

  • North Korean President Kim has suggested that nuclear war could break out at any moment. Markets are unlikely to price in a risk of that extreme, however. Markets rarely price in extreme events. Conflict in Iraq is another matter, as that is increasingly a reality rather than a risk and gives upside to oil prices.
  • Departing ECB Vice President Constancio is scheduled to speak, but is probably not the central banker to enlighten investors about 2018 quantitative policy tightening. There is speculation that the next Fed chair will favor a rules-based approach to policy – because a rigid rules-based approach to policy sounds just right at a time of considerable structural change.
  • Bank of England Governor Carney testifies today. The UK is the next country expected to tighten policy (November). UK inflation data is also due. Carney is likely to be questioned on the UK-EU EU-UK divorce. Yesterday's meeting between UK Prime Minister May and one of the EU presidents produced a statement that was as meaningless as such statements usually are.
  • Data offers little distraction. Industrial production from the US is not a key release given the weight of the service sector in the economy. The Germans throw out the ZEW opinion poll on business sentiment.