The data missed expectations across the board but it didn’t change much for the BoE, so the market reaction was muted.
Looking ahead, we have the German IFO survey. The IFO is correlated to the German Composite PMI given that they measure basically the same thing. The Business Climate index is expected to tick lower to 84.2 vs 84.4 prior, but whatever the data, the market reaction will likely be muted given no changes to the ECB policy outlook.
AMERICAN SESSION
In the American session, we have the Canadian retail sales report and the final University of Michigan consumer sentiment data. Retail Sales M/M is expected at 0.6% vs 0.7% prior, while the Core metric is seen at 0.9% vs 0.5% prior. The data is not going to change anything for the BoC, so the market reaction will likely be muted.
The main event today is Fed’s Waller speech at the Centre for Central Banking in Frankfurt, Germany on the Economic Outlook. The economic outlook speeches generally contain policy signals.
Fed’s Waller has been a great “leading indicator” for Fed policy in this cycle and I think the market would react in a big way if he were to change his dovish stance now. He’s been worrying about the labour market but the data has been pointing to resilient conditions
