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The Valentines Day GDP Massacre

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  • Japanese GDP was worse than expected in Q4 2012. Japanese GDP was worse than originally reported in Q3 2012. Japanese net exports were worse than expected in Q4 2012. Prime Minister Abe is likely to get very agitated by all of this.
  • Euro area GDP data is due. We await the numbers not with eager anticipation, but with a somewhat leaden sense of doom. France has already reported weaker than expected numbers (government spending was the strongest part of the data).
  • Germany, Netherlands and Italy are all expected to show Q4 2012 contractions. The banking system is unlikely to offer support to Euro area domestic demand, and fiscal policy is constrained. US domestic demand may offer some hope via net exports.
  • Today's calendar has former Italian PM Berlusconi speaking, but with an opinion poll blackout ahead of the election there is a limit to markets' ability to assess the impact of his remarks. We have some Fed comments, and no doubt there will be something on the G20 from some official somewhere.

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