Reading statements of the obvious
- US Fed Chair Powell read a speech suggesting that rates could be raised to levels that could restrain growth. This is to be carefully filed away under statements of the obvious. Of course, if the US economy were to overheat, then growth would be slowed by the Fed. In the meantime, the rhythm of hike, pause, hike, pause seems well established.
- The Italian government's budget deficit projections have been revised down twice in the past twenty-four hours. The unreliable deficit projection, expressed as a percentage of an unreliable GDP projection, is now an unreliable deficit projection, expressed as a lower percentage of an unreliable GDP projection. Italy is unlikely to default and very unlikely to leave the Euro. The rest is just noise.
- There are a couple of ECB speakers on the calendar, but this is unlikely to arouse too much market interest (unless investors want to play a game of "guess who replaces Draghi").
- US durable goods orders data is due, although the reliability of this as an indicator for investment can be questioned. There is something of a tense quiet in the markets over data anyway, with the thrills and excitement of the US employment report due out tomorrow.