Daily update
Daily update
- Anyone worried about inflation “stickiness” should look at Eurozone producer price inflation over the past 40 years. May Euro producer price inflation likely fell into deflation, having plunged some 45 percentage points in a year. Energy is a big part of this, but the collapse of inflation pressure is nonetheless astonishing. Most profit-led inflation is not in producer price data—it is generally a consumer price issue.
- US May factory orders data is due, with revisions to durable goods orders. French May industrial production data is also due—predating recent riots.
- The June Federal Reserve meeting minutes cover discussion where Fed factions may have done a deal to pause for now, but hike in the future. The minutes may tell us more about internal politics at the Fed than the state of the US economy. We also hear from Fed President Williams, a voice of economic authority.
- China’s President Xi said they want open supply chains (except, presumably, those supply chains with newly imposed export licenses). China faces two challenges to trade today. Economic nationalism forces deglobalization. Automation and digitization encourages localization. There will be no surge in trading of Beyoncé compact discs if compact disc supply chains become more open, because digitization makes such trade obsolete.
