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Japanese money supply up. Wages down.

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  • The US has little major data due out today, although this week's weekly store sales data release encompasses the critical Thanksgiving period when the US consumer steps up to reveal their heavyweight fighting potential.
  • Australia's Reserve Bank left interest rates unchanged, as expected, and reiterated a concern that the currency was too strong. We have heard this before, and will doubtless hear it again, so the impact of such verbal intervention seems to be diminishing.
  • In the wake of a decline in Japanese capital spending, Japanese wages dropped again in October (though bonus payments rose). If Japanese companies are not prepared to spend profits domestically, on investment or employment, then the extreme increase in money supply is not likely to achieve much.
  • We have published a Global Economic Perspectives today looking at the vexed issue of electricity prices. Surprisingly we discover that electricity costs have no bearing on the pattern of international trade or the electricity intensity of imports and exports, suggesting that concerns about green taxes are overdone.
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