Economists' Groundhog Day
- On Monday, we had the anticipation of the US Federal Reserve meeting, we had US politics as a distraction, and we had the noise of sentiment data. On Tuesday, we have the anticipation of the US Federal Reserve meeting, we have US politics as a distraction, and we have the noise of sentiment data.
- There is nothing new to say on the Fed. US politics is a mix of the Russia question and Trumpcare (another vote being possible). As always, investors regard the political turmoil as lessening the prospect for meaningful fiscal change, and deterring international investors from supporting the dollar.
- The European PMI business sentiment opinion polls weakened yesterday – a correction was one of the more easily predictable events of the summer as sentiment data is unreliable, poorly correlated with reality, and prone to overshooting. Today, there is the German ifo (less prone to overshooting) and US consumer confidence.
- The Bank of Japan meeting minutes show much discussion of exiting the current extra special, double-helping quantitative policy money printing policy. The discussion was about why there should be no exit soon. The ECB's Mersch was urging Eurozone accommodation for ages and ages and ages.