The ECB meets. Final September Eurozone consumer price data should confirm that inflation has fallen almost nine percentage points from its peak, and a whole percentage point this year. Cutting rates is simply an act of chasing inflation lower and keeping real rates stable, UBS’ economist Paul Donoban notes.

All eyes on the ECB meeting

“ECB meetings mean ECB President Lagarde press conferences (although Lagarde has been uncharacteristically quiet recently). There is enough uncertainty about the economic outlook to raise questions about the pace of easing, forcing economists to listen to Lagarde’s remarks.”

“Japanese export data in September were unexpectedly weak. This is not necessarily a reflection of weaker global consumer demand given patterns of spending are shifting toward having fun (having fun = events that can be posted on Instagram). US September retail sales data mainly cover the boring parts of spending but there are some fun elements. The advice never to short the hedonism of US consumers holds good.”

“US industrial and manufacturing output data are due, along with the Philly Fed manufacturing sentiment poll. Manufacturing output (on the official data) has risen slightly this year. Sentiment (ISM, Philly Fed) has pointed to a near continuous contraction for the past two years. It is enough to make one question whether sentiment lives in the real world.”