Economy update
The German economy contracted 0.3% in 2Q from the previous quarter because of the trade barriers erected by the US. The latest composite PMI suggest that the US economy is on a solid footing, although the increase in initial jobless claims implies some weakness in the labour market. The odds of a September rate cut have fallen from close to 100% to just above 70%, the CME FedWatch tool shows. Core inflation in Japan has slowed. In anticipation of the Fed chair’s speech at the Jackson Hole symposium this afternoon, equity markets are comparatively quiet.
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