ECB "excitement"

Posted by: Paul Donovan

24 Jan 2019
  • The European Central Bank meets. The main question is what color tie ECB president Draghi will wear to the press conference. There is little capacity to surprise on any other point. Comments about risks will probably focus on external demand. It is always easy for a central bank to blame everyone else for any risks ahead.
  • There are purchasing manager opinion polls of business sentiment due out. Markets have a touching faith that people answer the questions correctly. The correlation of these surveys with reality remains low.
  • The US government is still shut down. US President Trump agreed to delay the state of the union address. This is not market significant. The state of the union is obvious to investors. Initial jobless claims data will be welcomed as 1) it is a data release; and 2) it can show if there is a wider economic effect from the government shutdown.
  • Venezuela would appear to have two presidents. Some countries recognize one. Some countries recognize another. The EU suggested more elections might be nice. The main investor concern is the consequence for the oil market, but the state of the Venezuelan oil industry means that this is a long-term consideration.

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