Look how much has changed [sarcasm]
- The past two weeks have regrettably seen more terrorist atrocities, tensions with North Korea, a former US Vice President calling on US President Trump to resign, stronger-than-expected economic growth and weaker-than-expected inflation figures. Financial markets are essentially unmoved.
- The lesson from the past two weeks is perhaps that however shrill the media sensationalism, investors continue to focus on longer-term economic fundamentals when looking for trends in markets. Unfortunately, today does not offer much in the way of longer-term economic fundamentals.
- German producer price inflation (a better indication of corporate pricing power than consumer price inflation) came in a fraction higher than expected but not enough to animate investors. Italian current account data is due, and other than as a reflection of the dysfunction of the Euro as a monetary union, this is not of interest.
- US Michigan consumer sentiment is due. Consumer sentiment suffers the same flaw that plagues business sentiment; no one fills in surveys any more, and those people who do fill in surveys are not normal. The inflation expectations data gets attention but should not – consumers are absolutely useless at predicting inflation.