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Puppy training

  • G7 politicians were playing with the currency market like it was a puppy. One politician would call "come here" to FX dealers, and then five minutes later another politician would call "no, come here." We had better hope they have put plenty of newspaper on the floor. If FX dealers get overexcited, accidents will happen.
  • And now we face the prospect of the G20 at the end of the week. The G20 is like the G7, except that taxpayers' money is wasted from a larger number of countries in flying everyone off for a weekend mini-break.
  • The US recorded its first fiscal surplus in half a decade in January, although Americans rushing to pay taxes before tax rates went up may have had something to do with it. The State of the Union spent a fair amount of time focusing on the fiscal side of things.
  • The Bank of Japan starts its two day meeting, but with the leadership changing next month market expectations for this are low. The Bank of England offers its inflation report, and comments on funding for lending will be of interest. The US has retail sales - we expect a weak headline, but a solid core.

Listen to the audio version of this briefing.