What was all the fuss about?

What a couple of weeks, had one been on a desert island and come back, you would have wondered what the fuss was about. US stocks have rallied for six days on the trot, as a combination of inflation rates coming in slightly better than the market expected at 2.9% and a strong retail sales number indicating the US consumer is happy to continue to spend reinforced by some decent numbers from Walmart, all contributing to bringing Goldilocks porridge to just the right temperature again. The chorus of those calling for a 50 basis point cut by the Fed in September has not gone away completely, but their voices have been dulled. The rise of the Japanese yen, which is seen as a contributing factor to the steep fall in asset prices, has retreated this week, adding to the sense of calm. As much as we want to keep an eye on macro data for signals as what the Fed might do, it will also make sense to keep one eye on the yen for indications of risk appetite. That was the case for many a year.

The UK economy continues to hum along, if only at a moderate pace. Estimates show that we grew at 0.6% in the second quarter, on top of 0.7% in the first quarter. Growth was led by services, which were the biggest contributors to the economy, particularly the IT industry, legal services, and scientific research. That growth rate was the second highest among the G7 group of industrialised nations, with only the United States performing better. The latest retail sales numbers out this morning also show spending increased year over year by more than expected.

The Premier League starts this weekend, although August feels a little early for hats and scarfs. The start of the football season almost feels like the end of summer, sadly. After a strong rally in Asian markets, stocks in Europe are once again going to start on the front foot.