Political power, and pricing power
- US President Trump has forcefully urged Congress to pass tax cuts. The problem is that investors do not really believe US President Trump can provide the leadership to deliver tax cuts, and are perhaps more likely to focus on Congressional leadership as the drivers of tax change.
- More substantially, personal income and spending data is due from the US, including the PCE deflators that are the Federal Reserve's favored inflation measures. PCE deflators are vulnerable to technical quirks these days, as is the consumer price measure, which makes forecasting more problematic. Market expectations are for stability in the year-on-year rate.
- The Eurozone is offering the flash consumer price data (with the French and Italian releases) in the wake of upside surprises to inflation in Spain and Germany. Whether the modest increases are enough to counter ECB President Draghi's addiction to easing remains to be seen.
- Japan offers industrial production data today, which is of some interest in the wake of recent economic strength. China offers a purchasing managers' business sentiment opinion poll. It is really difficult to give this much credibility.