Daily update
Daily update
- Federal Reserve Chair Powell is speaking on the economic outlook today. An explanation of how Fed policy transmitted (or failed to transmit) to inflation would be interesting. Instead, comments are likely to focus on the prospect for three rate cuts this year, in line with other Fed speakers.
- Eurozone March consumer price inflation is expected to slow. Regional data has already tended to surprise by being lower than forecast (only the Netherlands surprised higher). Euro unemployment is expected to stay at its record low—it is worth reflecting how rapidly inflation fell without any increase in unemployment.
- US President Biden and China’s President Xi had a phone call. A phone call is unlikely to lead to a collaborative TikTok dance between the two, but with rising economic nationalism any dialogue is to be welcomed. Separately, Biden was critical of Israel after the deaths of aid workers in Gaza. Markets are pricing a slightly higher risk of an escalation.
- Assorted business sentiment opinion polls are due. These are released very frequently, and frequency bias gives unjustified emphasis to frequent information. When combined with some central banks’ data dependency, this raises the risk of markets overreacting.
