The data calendar today is so quiet even ECB President Lagarde does not appear to be speaking. The lack of economic data to guide investors might be troubling—but recent market swings were not based on rational economic analysis, UBS macro analyst Paul Donoban notes.

Feds’s summer camp for central bankers cometh

“Politics dominates the near-term market landscape. US President Biden will open the Democratic National Convention in Chicago. The focus is less on Biden’s remarks and more on policy proposals from Vice-President Harris. Of course, markets do not necessarily assume campaign rhetoric will become policy reality.”

“The issue of food retailers’ ‘price-gouging’ has been getting attention. US retailers’ profits-to-GDP ratio has risen from circa 14% before the pandemic to just under 22% today (wholesalers’ profit ratio remained around pre-pandemic levels, in contrast). Absolute price controls are generally regarded by economists as unhelpful. Enforcing competition and educating consumers can combat profit-led inflation.”

“The Federal Reserve’s summer camp for central bankers is at the end of the week, and we get minutes from the last Fed meeting mid-week. The summer camp is likely to be more of a focus. Fed President Daly was signaling a series of rate cuts are coming.”