Daily update
Daily update
- Financial markets are focusing on a soft economic landing. Friday’s US data demonstrated the relentless hedonism of the US consumer and ongoing disinflation. Some caution is warranted. Especially in the US, some of the strength of middle-income consumers is due to experienced inflation being lower than reported inflation. As reported inflation converges with reality, the disinflation will offer less additional support to consumers than might be supposed.
- German consumers seem less inclined to indulge their hedonistic tendencies—June retail sales were weaker than expected. However, the May data was revised stronger. Indeed, seven of the eight retail sales releases this year have included positive revisions.
- UK consumer credit and mortgage lending data is due. Higher interest rates hurt UK mortgage holders with a relatively short lag. However, mortgage holders are a minority of home owners in the UK, and around 70% of mortgage debt is owed by the top 30% of the population—so the mortgage/consumer relationship is blurred.
- Eurozone 2Q GDP data will be ignored by markets (which focus on the national numbers). The US Dallas Fed survey of manufacturing is always worth a glance—not for the data, which is just survey noise, but for the partisan and often hilarious comments section.
