And so starts a big week of data for Bernanke and the taper squad.
The Markit final August manufacturing PMI is expected in at 54.0 from 53.9 prior and it leads the ISM manufacturing PMI at 14.00 gmt, which is also looking for a read of 54.0 from 55.4.
July construction spending is out at the same time we’re looking for a 0.3% read from -0.6 prior.
I’m still in two minds over the whole taper issue. As well as my colleagues I also think that the Fed wants to taper because of the risks rather than the data allowing them to. This week is very important to Uncle Ben as the data could well save his arse. If it’s good all week, particularly the unemployment report, then he has his taper on a silver plate. If not then a taper is going to be viewed from the financial risk point of view.
Reducing purchases is coming and the market is prepared for it, but it’s the reason behind it that will be key. If the data is really bad then it’s going to be one hell of a job for him to sell the taper from both an economic and financial risk point of view.
Who’d be a central banker eh?
