European data poor but Friday's Inflation index is the key

Today's Highlights

Quiet markets as holiday season draws to a close

European data poor but Friday's Inflation index is the key

FX Market Overview

Groucho Marks famously said he wouldn't want to be part of any club that would have him as a member and South Yorkshire Police and Crime Commissioner Shaun Wright; who is at the centre of the Rotherham abuse investigation, appears to be living that rule as he quits the labour party which has been so critical of his shamelessness. I still can't equate this South Yorkshire Police Force which ignored 1,400 vulnerable children who were systematically abused with the South Yorkshire Police Force that so publicly investigated a single allegation against Sir Cliff Richard through a 7 officer raid on his house 250 miles away. Curious priorities and resource allocation don't you think!

As we near the end of the holiday season across Europe and as far as UK schools are concerned, the markets are reasonably quiet. That belies the turmoil going on in the political and geopolitical world and kind of ignores some of the economic data that is assailing us through the newswires.

For example, the Euro remains relatively flat in spite of a change of government in France, French unemployment at record highs (3.4 million out of work), French manufacturing sentiment still declining, German business and consumer confidence slumping etcetera etcetera....(Yes I did watch 'The King and I the other day). Traders are quite closely focussed on tomorrow's inflation data because the ECB is not expected to move monetary policy next week unless that data is dire enough to suggest deflation is a real risk.

The Pound is pretty lacklustre as traders try to weigh up; amongst other things, the effect - if any - of a Scottish exit from the UK and the Bank of England's reticence when it comes to interest rate hikes. Business leaders are lining up on the pro and anti sides of the debate. The government is caught between pressing for the benefits of being inside a trading bloc and the hypocrisy of saying that whilst threatening exit from Europe.

The US Dollar is also sanguine but the US data has been a little more positive. Tomorrow's consumer income and expenditure data will be closely watched, as will the business and consumer sentiment indices but this afternoon brings the big data of the week. The 2nd estimate of US economic growth is expected to bring a small downgrade from the 1st calculation. 4% should be replaced by b3.9% or perhaps 3.8%. A small scale weakening of the USD is very likely.

Away from the markets, I absolutely loved the story about Ai Hin the Panda. The scientists working with Panda's think she may have faked a pregnancy because she saw how well the other expectant Pandas get looked after. So by mimicking the behaviour of other pregnant females, she got access to better accommodation, more bamboo, buns & fruit and other creature comforts. Top work Ai Hin. I think they underestimated your sneakiness.