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The perils of playing with policy

  • The US economy showed a domestic private sector that was doing pretty well - and the weakness of the headline might perhaps remind Congress of the perils of playing with fiscal policy too abruptly (hope springs eternal). The Fed was sounding a little more upbeat on the economic outlook.
  • UK consumer confidence rose, especially with regard to the economic prospects (access to credit and relatively low unemployment may be helping). The Bank of England's Weale was sounding very dismissive of nominal GDP targets for policy setting.
  • The credit rating agency S&P has warned of the risks of implosion in the Australian economy if investment in mining were to slow. Of course, one could also state that the US economy would implode if consumers forgot how to use a credit card - it does not mean that it is necessarily going to happen.
  • The Euro area offers consumer price inflation, which is unlikely to agitate investors too much (the consensus is for a stable yoy rate). France and Germany offer some indications (and maybe a contrast) of the health of consumer spending. The US also gives income and consumption data.

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