San Francisco Fed President John Williams has just been voicing, in a prepared speech, his opinions surprisingly close to the next FMOC meeting of September 20-21.

For the most part, his opinions were pretty vague. He tried to push markets to realize that (from a realistic and thus economic viewpoint) it’s better not to obsess about single data points, which is, unfortunately, the situation we have today.

I have little doubt that his attempt will be futile. We now live in a myopic short-term goals/views world. 

Williams’ speech reads: “I remain confident about the road we are on. Consumer spending is strong, the labor market is running apace, and household balance sheets are improving. All in all, I see a solid domestic economy with good momentum going forward.”

He continues: “What does this mean for interest rates? … It makes sense to get back to a pace of gradual rate increases, preferably sooner rather than later. Let me be clear: In arguing for an increase in interest rates, I’m not trying to stall the economic expansion. It’s just the opposite: My aim is to keep it on a sound footing so it can be sustained for a long time. History teaches us that an economy that runs too hot for too long can generate imbalances, potentially leading to excessive inflation, asset market bubbles, and ultimately economic correction and recession.”

So, did Mr. Evans give us a signal that the Fed will raise this month? Probably not.

Of course, whether the FOMC should raise rates this month is a different question, but the balance of politics and market expectations to which the Yellen’s Fed attaches seemingly disproportionate importance, all this argues for a delay of a rate hike to December.

Over in the U.K., the Governor of the Bank of England Mark Carney is to testify to the Treasury Select Committee of Parliament. 

Notable Euro-skeptic members of the Committee are likely to attack the Governor over recent improvement in sentiment data. 

There are a number of problems with the political showmanship that we are likely to see today. 

First, the economic consequences of an EU exit were always likely to be longer term.

Second, the Bank of England’s policy response is likely to have had an impact, especially on sentiment. 

But perhaps the most concerning risk of today’s event in the UK Parliament is the global tendency to challenge independent central banks, which is serious matter of concern globally.

Down under we saw Australia’s economy growing at 0.5 percent in Q2 quarter-over-quarter and at 3.3 percent y/y, which was the highest annual growth rate in 4 years, which, by the way, validates the stable policy stance that the Reserve Bank of Australia took earlier this week.

It’s also noteworthy that Australia has now enjoyed 25 years without recession.
 

Investors shouldn't overlook that growth was mainly bolstered by government spending to offset another steep decline in mining investment. Annual GDP growth excluding the mining sector was 2.7 percent, which was nevertheless also the highest in 4 years. But GDP growth without the government-spending boost was 2 percent y/y, which is, it must be said, not so flash.
 

But one shouldn't read too much into the Australian GDP growth figures (when taken in the context as an indicator for global growth).
 

In the Euro area, Germany's industrial production fell the most in two years in July. It decreased by 1.5 percent from the previous month after increasing 1.1 percent in June.
 

Noteworthy is that production of capital goods decreased by 3.6 percent, the production of consumer goods decreased by 2.6 percent, the production of intermediate goods decreased by 0.8 percent while energy production was up by 2.6 percent in July 2016 and the production in construction increased by 1.8 percent.
 

All this doesn’t bode well, especially after Germany's Ifo Business Climate Business confidence indicator clearly worsened in August and the business climate indicator for the Euro area as a whole declined markedly in August.

Because of all this, while not forgetting the political uncertainties that are plaguing the Euro area, Thursday's ECB monetary policy decision and especially ECB’s President Mr. Draghi press conference could become (hopefully) interesting.   

Etienne "Hans" Parisis is a bank economist who has advised global billionaires and governments on the financial markets and international investments. To read more of his articles, GO HERE NOW.