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A wasted weekend

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  • The weekend produced nothing on the US debt ceiling or the government shutdown. Markets are still assuming a resolution (no panic in Treasuries) while not exactly happy with politicians inability to do anything (equity futures are weaker).
  • Noyer of the ECB suggested with some insight that a US fiscal "accident" might not be a good thing for the rest of the world. He also suggested that the ECB might retain its accommodative policy for longer â€Â“ the US problems do transmit to the Euro via financial markets, which could justify greater accommodation.
  • Chinese food prices pulled up headline CPI (again).Food price inflation in south east Asia has been above headline inflation persistently in recent years, raising political concerns and increasing the risk of government interference in food procurement.
  • The Eurogroup meet, though experience suggests it would be foolish to expect anything relevant to emerge from its deliberations. Euro area industrial production data is unlikely to give much upside surprise, as regional data has tended to disappoint.


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