Daily update
Daily update
- No fewer than 11 global central bankers are jostling for attention from the world’s media today. The message from all this central bank babble is likely to be confusion. We are close to monetary policy turning points, in the middle of structural upheaval, with data which is less reliable. In such circumstances, there is a risk that gut instinct and pre-conceived ideas play as much of a role as analysis when it comes to policy comments.
- Profit-led inflation may get a mention. Profit-led inflation occurs at the end of supply chains, so it is essentially about relative prices (consumer prices in specific sectors rise relative to other prices). There is anecdotal evidence of some margin squeeze emerging.
- South Korea’s export data for the first 20 days of May improved compared to April, but the trend is less robust. Europe and the US had fairly flat demand, and the picture is consistent with global trade lagging broader economic activity.
- The US debt ceiling farce continues, with more meetings today. There has been more sensationalist rhetoric—posturing is likely to increase as the ceiling approaches. More polarized politics might focus more attention on extreme solutions (platinum coin, fourteenth amendment) but a negotiated deal is still the most likely conclusion.
