Drama and excitement, European style

Posted by: Paul Donovan

10 Apr 2019
  • The ECB meets. Nothing is expected in particular, other than the traditional excitement surrounding the color of tie that ECB President Draghi will be sporting at the press conference. The minutes of the last meeting showed an inclination to raise rates at the end of the year. Trade tensions are perhaps worse since that meeting. The German economy is stronger (having revised numbers up).
  • One of the many EU presidents has written to urge a long, flexible delay to the interminably tedious EU-UK divorce process. There was a none-too-subtle reminder that the UK can unilaterally delay it by two years by revoking and resubmitting article 50. Markets still cannot be bothered to care.
  • France, whose vibrant cheese industry may be threatened by new US consumer taxes, offers industrial and manufacturing production data, as does Italy and the UK. With China now accounting for 25% of global manufacturing, the traditional lunar new year volatility in Asian manufacturing may now be evident further up the supply chain.
  • Japan's producer price inflation was marginally higher than expected. US consumer price inflation is due. The Fed prefers the personal consumer expenditure deflator, which is a more market-based measure. Markets, ironically, favor the less market-based CPI.