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Timing is everything

  • US consumer credit was a little stronger than the market had anticipated (though credit card lending remains soft). In contrast, however, the NFIB survey of small businesses reports concerns about credit access still linger. Fed policy does not appear to be hitting all parts of the economy equally.
  • The Nikkei reports that the Bank of Japan is unwilling to set a time period for achieving any new inflation target it may adopt. Given the lack of success it has had in keeping inflation over 0% (a target since 2001) this might be a wise approach.
  • French government officials have denied speculation of a further sovereign credit downgrade (at this stage the medium term impact of an additional downgrade is probably pretty minimal).
  • UK trade numbers are due, trailing in the wake of some softer German export data. This reflects the weak nature of domestic demand in the Euro area economy (which, though of declining importance as a trade partner to the UK, is still significant as an export location).

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