Daily update
Daily update
- There is an eerie calm over the economic calendar. Weekly US initial jobless claims data may get more attention than normal. This is not survey evidence (people have to do something to make a claim), but it is also not comprehensive as unemployed new entrants to the workforce are not captured. The state breakdown may offer some helpful insights into the effects of Hurricane Beryl on Texas (and through that, national employment data).
- The Federal Reserve has been late to cut rates, but sensationalist demands for an intermeeting cut can probably be dismissed. Financial markets are not so important as to justify a panicked policy response. We hear from Fed President Barkin today, who may give some hints as to the scale of the expected September rate cut (which might be 0.5 percentage points if the Fed wants to correct for failing to cut in the second quarter).
- Equity markets have been meandering rather than moving with clear direction. The unwinding of more speculative trades should have concluded, allowing economic fundamentals to gradually reassert themselves.
- Ukrainian action in Russia pushed up European gas prices yesterday, with a gas transit station being captured. Gas flows do not appear to be affected, and the economic impact is likely to be minimal.
