Fed Chairman Alan Greenspan has again cautioned markets on the current levels of asset prices, capacity utilisation and a tightening labour market. European markets are currently twisting and twitching at every utterance from european politicians and central bankers. The EMU effect could be distracting from a more immediate danger.
There is a real possibility that the Fed will raise interest rates on 12 November. An early move from them (assuring that they stay ahead of the inflation curve) would bring a sharp dose of reality back to markets.
The week's diary:
21 October - CBI industrial trends survey (Oct)
22 October - Retail sales (Sep)
23 October - Money Supply (Sep); Conference on EMU, speakers include E George; Bundesbank meeting
24 October - Whole World Visible Trade (Aug); Non-EU Visible Trade (Sep); Prelim GDP (Q3).
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