China GDP releases are starting to look like near-perfect landings each and every time, in all kinds of weather conditions and visibility.
European Union leaders have offered Turkey a possible 3 billion euros in aid, the prospect of easier travel visas and “re-energised” talks on membership in return for its help stemming the flow of migrants to Europe. This is all a pretty good win for Turkey’s Tayyip Erdogan two weeks before the early elections he hopes will cement his authority. And what about the EU’s oft-stated concerns over human rights in Turkey? Doused by realpolitik. “In our neighbourhood, we are not asking any more for fundamental rights after the Arab Spring,” said one EU official. “We are asking for stability.”
The global economic slowdown shows a clear risk of extending into next year, along with an even more prolonged period of disinflation, according to the overwhelming majority of nearly 300 economists polled by Reuters around the world.
Only a few weeks ago he was the butt of much EU criticism over his authoritarian behaviour. Now Turkey’s Tayyip Erdogan is being courted assiduously by the bloc’s leaders as an essential part of the solution to the migrant crisis. Tonight’s EU summit will review plans under which it is hoped Turkey will cooperate to stem the flow of refugees west from its territory; in return Ankara will want easier visa access to the EU, more aid and a new push on its EU membership bid. Significantly, Germany’s Angela Merkel will be heading to Turkey for talks this weekend.
Wage inflation is supposed to pick up once unemployment gets down to a level at which scarcity of labour means companies are forced to pay more for top talent. This time, at least so far, the theory is either not working so well, or taking its time to kick in. Or perhaps the modest rise we’ve seen is the best we’re going to get.
With Bank of England policymakers ready at a moment’s notice over the past several years to warn anyone who will listen that a rate rise is closer than we think or just around the corner or soon coming into sharper relief, the main instrument it targets – inflation at 2 percent – is having nothing of it.
One of the week’s biggest numbers is out at 0900 GMT with the ZEW report on sentiment in the German economy in October. This could give a first glimpse of perceptions on whether the VW emissions scandal is hurting the wider economy and comes after last week’s data signaling a drop in exports and weak industrial orders, largely down to a slowdown in China and other emerging markets.
Russia has denied assertions by U.S. officials that four cruise missiles it fired at Syria crashed in Iran, sticking to its version that they hit Islamic State targets as intended. With Iran also not confirming the incidents it may be some time before the full truth emerges which will only add to concerns about an escalation of the conflict and the risk of more trouble as U.S. and Russian forces jostle for Syrian airspace. Looking for further comment from U.S. Secretary of Defense Ash Carter during a London visit.
More bad news for the German economy as exports fell in August by the largest amount since the height of the global financial crisis in 2009. That comes after sharp declines in industrial orders and output in August that already signalled the fact that weak demand from abroad, particularly China, could be leaving its mark on the euro zone’s top economy. And this of course does not factor in any future damage to the image of German manufacturing from the VW emissions scandal.