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A fun-packed week

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  • The economics profession will be working with the diligence of Bob Cratchit up to the very moment of the holidays, for this week has the FOMC meeting (decision Wednesday) and the heads of government meeting in Europe (Thursday and Friday).
  • The Fed is expected to signal a scaling back of quantitative policy, but not actually undertake that scaling back until January. The European meeting will, it is to be hoped, agree plans for a proper banking union for the Euro area - time is running out to get this approved.
  • Japan's Tankan survey of business sentiment was stronger on the headline (the weak yen helping), but softer in the details (outlook somewhat more modest, and capital spending plans reduced). China's manufacturing sentiment was softer on the headline, but due to destocking (which is less of a threat).
  • Sentiment in the Euro area should point to an aggregate economic expansion. However the main point of interest may be the degree of divergence within the Euro area, and in particular the extent to which the economies of German and France diverge.

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