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Cash from clunkers

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  • In testimony to the efficiency of the US government, the Congress avoided a default with hours to spare (well, more than one hour to spare). There was the dull clunk of the can hitting the road sometime in January (shutdown) or February (debt ceiling) but we must not expect too much.
  • The backlog of data should start to make its way out, though the government has only just reopened so it may take a little while. The Fed's Beige Book noted tensions in the tourism industry from the shutdown, but kept the economic assessment unchanged and also noted stronger business loan demand.
  • UK retail sales are due with employment at an all-time high, household cash flow is not that bad, and should be moderately supportive of consumption patterns.
  • The Euro area has a Spanish bond auction in the wake of changing perceptions about the risks of downgrades. Germany sees the negotiations for a grand coalition resuming, but it is early in the proceedings (by the standards of past coalition negotiations) to be expecting a result.

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