Carrying on, without keeping calm

Daily update

The expected error from the ECB was accompanied by rhetoric citing concerns about oil price pressures broadening throughout the Eurozone economy. There is no evidence of this reported broadening—non-oil prices should be expected to pass on oil-related costs, and only a wage-spiral or profit-led inflation would constitute a broadening of inflation pressures. These are notable by their absence. Nonetheless, the Teutonic cry of “we must have discipline” seems to be echoing throughout the ECB, raising the risk that the error will be compounded with a further rate increase.
US President Trump has suggested—for what media report to be the thirty ninth time—a deal with Iran is just around the corner. Iranian media is suggesting that the US has agreed to Iranian terms, which has given the statement a little more credibility.
US University of Michigan consumer sentiment data is due, and is not especially useful. However, polls do matter to the extent that they influence politicians. Other polls suggest that a majority of Republicans now blame Trump for the affordability crisis, so the political breakdown of the Michigan data is important.
UK production data was in line with global trends—strength in manufacturing coming from a stronger computer sector.