Italy - not going anywhere
- Italy has been creating some volatility, after an Italian politician suggested the country would be able to cope with its problems with its own currency – before clarifying that there were no plans to leave the Euro. The costs of leaving the Euro would be horrific (and it is the political and social costs that would be most damaging). Fortunately Italians do not appear to think the idea credible – if they did the logical response would be bank runs, and these are not in evidence.
- US Federal Reserve Chair Powell read a speech that sounded confident that wage gains showed no overheating of the US labor market. Whoever wrote the speech has a touching faith in the accuracy of US wage data (amidst considerable structural change in the US labor market). The comments are consistent with a steady pace of policy tightening.
- Euro retail sales data are due. There is a degree of divergence in the Euro area experience with retail sales lately.
- UK PM May will deliver a speech to the Conservative Party Conference, with the government's ally the DUP refusing to accept any kind of border splitting the United Kingdom (such as, for instance, a regulatory border between Great Britain and Northern Ireland).