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Everything's tremendous (apparently)

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  • Senator Reid has said that the two sides in the (Senate) debate over fiscal policy have made "tremendous" progress. "Tremendous" progress does not mean a deal has been done or that the US has a functioning government, but what has happened is "tremendous" and we should not forget that.
  • Markets remain as they were regarding the situation as a binary outcome (economic survival or the abyss), and pricing in the idea that Congress is likely to opt for the survival of capitalism and avert a default. There is no real US data, of course, only the Empire State confidence survey.
  • Europe has French CPI inflation, and a trio from the UK CPI, PPI and house price inflation. The UK data is probably of more interest as energy pricing (CPI and PPI) has become a political issue, and there are concerns about the risks of a housing bubble.
  • Japanese industrial production was revised down a little, but it is old data and a minor change. The RBA in Australia released the minutes of their last meeting, which seemed to retain an easing bias to their general tone without being especially strong or urgent in that bias.

Listen to the audio version of this briefing.