Technical & Fundamental Oil Reports Specialists

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“What do we want?”

Published Thursday, August 28th, 2014

“What do we want? We want inflation” is the common central bank chorus. Not that long ago inflation was an anathema, now it is desperately sought after. They also want to see real wage growth, as do unions in another example of unexpected alliances in this topsy-turvy world. Oil producers would like to see some price inflation as well.

In seven days’ time financial markets will be on the edge of their seats awaiting the latest monthly US non-farm payroll figures. Today the market is focusing on tomorrow’s eurozone inflation numbers and ECB projections. The Reuters consensus is for a rate of 0.3%, down from last month’s 0.4%. If that is the number or lower it will unleash a vigorous debate on whether the ECB will finally relent and launch QE at its next meeting on September 4.

Alarmingly, two financial stability threats that never really went away and which have re-emerged this summer are the eurozone and the Chinese property market. Two of the eurozone’s major economies, France and Italy, are in desperate shape. The latest data show Italian consumer confidence at its lowest level since March and retail business confidence in France falling dramatically.

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Posted by David Hufton