Chattering central bankers
- US Federal Reserve Chair Yellen was making clear the benefits of current regulation in the financial system. Given US President Trump's views on regulation, these comments may not have been career enhancing. Markets would be worried by a replacement of Yellen, and excessive deregulation may risk economic instability.
- The Trumpcare US healthcare reform vote in the Senate has been delayed a couple of weeks. The delay slows discussion of fiscal reform. There is also a risk that a thwarted Trump would double down on issues under presidential control like trade. The Fed has a paper suggesting China's trade surplus may be bigger.
- Williams of the Fed, Carney of the Bank of England and Draghi of the ECB are all due to speak today. Draghi's comments yesterday, recognizing the reality of normal inflation in the Eurozone, were taken as a reason to rally the euro. Italian consumer price inflation is due today.
- The data calendar is relatively light – there is some housing data from the US. The UK prime minister's questions in the House of Commons may attract interest as disagreements in the UK cabinet are now emerging. The topic for disagreement is the UK-EU divorce. The metaphor of choice is cake.