Dull resilience

Daily update

The narrative of today’s generally “second tier” data releases is of a global economy that is resilient if somewhat dull. This might seem remarkable in the face of war, oil price gyrations, and unpredictable US policy. However, middle-income consumers in developed economies began this year in a solid position. Oil and the US economy have become less important over time. People are very good at adapting to a crisis.
UK prime minister presumptive Burnham gave a speech on policy which confirmed investor expectations—little of market importance will change. There was no magic money tree (the productivity pixie did appear, with pledges to make government spending less wasteful, but politicians from time immemorial make that promise).First quarter GDP was revised to show some more positive signs in the details, but with imports detracting a little more from the headline.
German, French, and Italian June consumer price data should confirm the error of the ECB’s ways (core Spanish inflation was lower than expected). However, resilient activity is also in evidence—the German May retail sales data was notably stronger than expected, with some positive revisions to past numbers too.
The US conference board consumer confidence data is likely to provide limited insight, given the polarized nature of US society.