Eurozone Still In A Fine Mess
There has been a brief respite for the Australian and New Zealand Dollars despite being the subject of further poor data. Business confidence in New Zealand continued to shrink, consumer confidence was also down. The markets also learnt that the RBNZ had been intervening in the markets in August. We have also seen the situation in Hong Kong cause unrest in the markets and lower than expected Chinese PMI.
In the US, Chicago Fed Chief Charles Evans towed the party line about the US not being ready for a rate hike just yet. We’ll have to wait until after the summer of 2015 for that as long as inflation is at 2.0% or slightly higher.
Lots of important data out today and in the UK the focus is on the GDP figures. This isn’t the primary focus of the Bank of England at the moment as it seems to be taking care of itself. Their concern is average earnings, inflation and how to translate these figures into interest rate hikes.
In the Eurozone, we will get the opportunity to see what a fine mess it is in yet again. Ultra low inflation is still causing concern for Mario Draghi and there is not expected to be any improvement shown by the figures today. Draghi’s original plans for rescuing the economy do not seem to have worked so today may help highlight just what needs to be done.
Headline data out today is unemployment from Germany, Italy and the Eurozone, Q2 GDP from the UK, CPI from the Eurozone and consumer confidence from the USA.