Markets are reacting to disappointing PMIs across Europe and in China, driving fears of a challenged global growth outlook. Accordingly equities are soft, the U.S. 10‐year yield is at 2.3% and the USD is mixed. The European currencies are weak; with the commodity and growth currencies flat to slightly stronger. Today’s focus will be U.S.CPI, expected to fall –0.1%m/m on headline, on the back of weak energy and a strong USD; while core is expected to rise +0.1%m/m. It is hard to argue that inflationary pressures in the U.S. are anything but well contained, opening the door for the Fed to be patient.
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