ECB lane once again subtly issuing worries about strength of Euro and thus its negative impact on Inflation.Stronger currency will cause some imports to be cheaper but good luck “importing” and inflation which can and likely has occurred in the past. A weaker Currency does stimulate more export demand and the hope is that this increase in Demand will push domestic prices higher and cause a bit of Price inflation. Nobody wants a stronger currency when fighting off Deflation is the goal. In the US we do see some commodities,food stuff rallying a bit Soybeans 2 year highs,Corn only 5 month highs.We know all about Lumber but if your not buying a house or remodeling you don’t feel the higher prices. Oil is stagnant OPEC Increased production too soon,Demand is not there yet,OPEC will hold a teleconference this Thursday to discuss production with her allies. Speaking of Lumber September traded at $1000 a day before expiration on what appeared to be a short position throwing in towel.
Monthly Survey of Consumer Expectations from NY Fed
” According to the results of the August 2020 Survey of Consumer Expectations, home price growth expectations nearly returned to levels seen a year ago, while delinquency expectations remain low. However, year-ahead spending, household income, and labor market expectations all remain weak compared to the pre-COVID-19 period. Median inflation expectations increased at both the short- and medium-term horizons, while uncertainty and disagreement about future inflation remain elevated.”
Even though Oil prices are stagnant Nat Gas continues to see strong LNG demand thus keeping prices near the highest price this year.