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| Posted by: Paul Donovan | Tags: Paul Donovan

  • Financial markets like a degree of certainty. Traders do not need perfect knowledge of the future – if they did, they would have become economists not traders – but a certain degree of certainty is appreciated. This is why the political uncertainty pervading the current US administration has market relevance.
  • Eurozone consumer price inflation for February ("final" data) is due. With non-market prices playing a larger role, a sensible central bank might think about inflation targets as a range – 1.5% to 2.5%, perhaps. We believe Eurozone inflation will slowly move higher over the course of this year.
  • US industrial production data is due. Economically, this is not especially relevant (this is not where the US competitive advantage lies, for the most part). However, there is a political focus on manufacturing that might heighten market interest.
  • While the grown-ups have been looking at things that actually matter in the real world, the cryptocurrency market had a bad week. Allegations of fraud, regulation, and advertising bans have reduced cryptocurrency demand. Cryptocurrency supply cannot fall (it can only rise). If demand collapses and supply stays unchanged, the implications for value are obvious. Deflating this bubble will hurt individuals, but the macroeconomic effects are limited.