Talking, but not opening up

Posted by: Paul Donovan

25 Jan 2019
  • The US government is still shut down (so no US durable goods data today). The US Senate failed to pass proposals to end the shutdown. Republicans and Democrats in the Senate are talking. The problem is that after so bad tempered a shutdown, the threat of the debt ceiling and September budget will still weigh on investor sentiment even when government reopens.
  • ECB President Draghi (in a purple tie) stressed greater downside risks to the Eurozone. Coeure of the ECB said that it was too soon to tell if there would be Eurozone rate hikes this year. The ECB has to balance avoiding an abrupt loss of liquidity with the policy needs of the economy.
  • Japanese consumer prices surprised to the upside (not a common occurrence in Japan). Energy prices were less of a drag. Energy should work to moderate inflation in the future, but there are some inflation pressures in the economy too.
  • The German ifo business sentiment opinion poll is due as is the Spanish producer price inflation data. UK CBI retail sales data is due too – the UK consumer was fairly strong into the end of 2018, but structural change is making some surveys poor indicators.

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