I’d like to come back for a moment on the just released Fed "Beige Book," which gives us the usual anecdotal evidence of the state of the U.S. economy, which can be useful when the economic data aren't terribly clear. 

The Beige Book painted an overall picture that was OK: labor markets are doing fine, the inflation picture is not too alarming, etc.

What was noteworthy was that there were several comments stating that the uncertainties of the November election may by weighing on some business decisions.

We all know that political uncertainty has an influence, and that is not especially unusual, but what is perhaps unusual this time around, is the extend of uncertainty given the nature of the current presidential race and the radical different alternatives that are being presented.

For investors it could be worth keeping in mind that less reliable indicators like sentiment data may be disproportionately influenced by political risk.

In this context, anecdotes of worries may be a reason to downplay data like the just released August 2016 Non-Manufacturing ISM report on business that came in at 51.4, down from 55.5 in July, which was a substantial and unexpected downward move. 

Over in the EU, European finance ministers meet today.  I think this meeting will accomplish very little… 

Anyway, there will be discussions among 27 finance ministers and 28 central bankers at a minimum, about Greece as well as on the Italian bank issues and so on. 

The Austrians are promising to make noises about the consequences the UK’s EU referendum, but nothing is likely to be done that actually matters to anyone in the real world. 

For investors it is worth keeping in mind that much of the EU agenda for the next 2 years, and probably well beyond, will likely to be tight up with protracted negotiations about the U.K.’s exit from the European Union, which of course, will not allow much go for initiative taking and innovation. 

Besides that, and in the real world where things do happen, Chinese consumer prices came in lower than expected. This however has little international bearing as Chinese consumer prices are mainly food prices and China is not a major exporter of food. 

As an aside, global food commodity prices are rising and as shown by the FAO Food Price Index for August that just hit a 15-month high, but for a country like China, commodity consumer prices are only a fraction of the total consumer price, of which labor cost is the most important component. 

Producer prices, which are slightly more relevant in an international sense, were slightly higher than expected in China, or rather, the rate of decline was not as large as expected, but it was a marginal difference and not enough to get worked up about. 

Besides all that we got the latest Greek inflation data, which is often overlooked, but that may be worth examining as part of the comparing contrast story for inflation within the Euro area.

After Greek Producer Price Inflation (PPI) decreased by 7.3 percent y/y in July, Consumer Price Inflation (CPI) rose to 1.7 percent in August, from 1.3 percent in July, driven by food and energy costs, which is a dire combination for Greece that under such a scenario never will be able to recuperate.

Please keep in mind that the Euro area annual inflation (CPI) is expected to be at 0.2 percent in August 2016, unchanged from from July.

Divergent inflation rates are indicative of divergent economic and particularly, divergent labor market experiences.

So, while the Greek inflation is not likely to interest markets in and of itself, the broader trends of Greek inflation, in a European context, are of relevance in considering the political pressures that are swirling around the Euro area at the moment, which of course is important to investors who have euro related investments.  

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.