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Party like it's 1998

| Posted by: Paul Donovan | Tags: Paul Donovan

  • Financial markets' concerns about North Korea's missile shot have faded rapidly. People are naturally programed to be optimistic, so the reaction is not that surprising. The market reaction is similar to those in the 1990s when missile tests were common, although the US does have a president of a different temperament today.
  • European inflation looms large on the calendar, with consumer price data from Spain and Germany, and producer prices from Italy and Austria. Eurozone inflation is not abnormal (it is very close to long-term averages) but it is below target. Today's consumer price data is expected to increase a little.
  • US GDP data is due to be revised, with the consensus expectation for a positive revision. This is not unusual. Technological change means that initial estimates of GDP need to be revised more often, generally with larger revisions than in the past, and generally with positive revisions.
  • EU business and consumer confidence data is due, and should be treated with the respect it deserves. The UK is suggesting (threatening?) more EU exit talks in order to cover the workload.