If emerging markets are to lead global economic performance one again as they did in recent years, an important foundation will be to convince as many people as possible that reported growth data are as accurate as they can possibly be.
Russia’s Vladimir Putin will meet leaders of France, Germany and Ukraine in Paris this afternoon for talks originally slated to cover Ukraine but now overshadowed by a conflict in Syria pitting Moscow and Washington in combat in the same country for the first time since the Cold War. While they have the same foe, Islamic State, they have different allies and a divergence of views on the end-game. Not for the first time, Western officials are struggling to work out Putin’s motives and come up with a convincing response. A news conference is due after the talks this evening.
We have already heard enough commentators and economists explain how U.S. payrolls data will not matter much in coming months because we’re at a solid enough pace of hiring to keep the unemployment rate, already at just 5.1 percent, on a steady downward path.
from Ann Saphir:
John Williams, chief of the San Francisco Federal Reserve Bank, happens to have the same name as the guy who wrote the music for the Star Wars films. Judging from his speeches of late, the Fed’s own Williams is something of a sci-fan himself. Thursday in Salt Lake City he borrowed from the iconic greeting of Star Trek’s Spock with a talk titled “The Economic Outlook: Live long and Prosper.” Earlier this month he riffed on Star Wars, with a speech subtitled “May the (economic) force be with you.” In July, he spoke about “The recovery’s final frontier” (see http://www.imdb.com/title/tt0098382/). So it is quite logical that the enterprising captain of the Fed’s farthest-flung Western outpost would be keen on exploring strange new worlds. And here I don’t just mean voyaging to Los Angeles, where he was on Monday, or to Spokane, Wash., where he treks next week. Williams, like most Fed officials, believes that after nearly seven years of extraordinarily easy monetary policy, the U.S. economy is finally ready to leave near-zero interest rates behind. On Thursday, Williams repeated his view that the Fed should raise interest rates this year. Not all U.S. central bankers agree – one can almost hear Minneapolis Fed’s Kocherlakota or Chicago Fed’s Evans echoing Princess Leia’s warning, “I have a bad feeling about this.” Certainly, if the Fed can successfully raise rates without quickly needing to cut them again, it will have pulled off what several other global central banks – the European Central Bank, the Bank of Japan, Sweden’s Riksbank -- have tried to do, but failed. Raising rates this year, as Williams hopes and expects to, would indeed be a bold move; and if the first hike is followed by others, he would indeed be taking the Fed where no other central bank has gone before.
Russia’s launching of air strikes in Syria is a potential game-changer, not least because of the row over what it is actually striking. Western officials assert it is attacking not Islamic State but Syrian rebels that in some cases the U.S.-led coalition may be supporting. The mechanics of “deconfliction”, ie making sure Russian aircraft do not accidentally clash with Western warplanes, is a pressing issue, with U.S. Secretary of State John Kerry saying he now expects urgent discussions. A wider angle is how this transforms Russia’s role in geopolitics, and what indirect effect it might have on other knots of tensions between Moscow and the West, not least Ukraine. Is Vladimir Putin in the process of gradually turning himself from pariah to an awkward yet indispensable player?
Euro zone prices fell year-on-year in September for the first time in six months, the official estimates showed on Wednesday, highlighting the persistent risk of outright deflation amid a slump in commodities prices.
Euro zone inflation data due at 0900 GMT are expected to show that prices stagnated, highlighting the persistent risk of outright deflation amid the slump in commodities prices. They come after the ECB’s preferred measure of inflation expectations — the so-called five-year, five-year break-even forward showing where investors expect 2025 inflation forecasts to be in 2020 — hit its lowest point since February, i.e., before the bank launched its bond-buying stimulus programme in March.
A patriot acting in the defence of decency, fair play and other supposedly British values is how UK Labour leader Jeremy Corbyn will portray himself in his keynote speech to the party’s congress this afternoon, seeking to counter critics who write him off as a loony leftist. He will also expound on his pledge to consult widely on Labour policy — a move some in his own party fear will only confuse voters about what the party actually stands for.
Once one of the hardest-hit economies in Europe from the global financial crisis, Spain’s recent economic success sets a good precedent for the euro zone’s potential for recovery. But political machinations on the horizon could put the progress it has made at risk.