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Blame Europe

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  • The Fed' Beige Book took the somewhat unusual path of mentioning slow hiring from firms with exposure to Europe - globalisation has its downside, it would seem. Defence companies were also reported as being sluggish in hiring (blame Capitol Hill for that perhaps?).
  • The general tone of the Beige Book was consistent with a slow, steady pace of recovery in the US, which is in line with our above consensus but below trend call for the US economy this year. We get the Euro Monthly Bulletin today.
  • Spain has an auction result, which will obviously be something markets will want to focus on. We believe that moral suasion backed by threats will keep domestic demand OK for Spanish debt over the short term, but the finite resources of the domestic investor base will eventually force a bail out request.
  • US initial jobless claims numbers and housing starts data are both due - and again should signal the slow and steady recovery. We also have the Philly Fed regional business confidence data on the calendar.

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