Daily update
Daily update
- The economic calendar is full of central bankers tripping over themselves in their rush to get into the media spotlight. ECB President Lagarde will be speaking twice. The ECB’s central bank forum is more likely to focus on longer-term considerations than immediate market concerns.
- The US releases May wholesale and retail inventory data. Global supply of goods is at an all-time high, but demand for goods has slowed. This has allowed companies to build inventory as insurance against supply chain problems. However, some firms now have “involuntary” inventory builds, which are a potential source of goods price disinflation or deflation.
- Commodity prices have been volatile, with some commodity markets in deflation (cotton prices have collapsed, for instance). This is why stagflation is a low probability—the price mechanism is working, and when demand falls relative to supply, prices will drop. Of course, politicians can interfere in the price mechanism—not content with the largest tax grab since 1953, UK Prime Minister Johnson plans to add extra taxes to UK users of steel.
- There are German and US consumer confidence figures, and a regional manufacturing confidence poll from the US. Economists care about what people do, not what they say—the two things are not necessarily correlated.
