Follow Paul Donovan

Striking down austerity

  • Markets have been disappointed with the US employment data, and some wild talk of "summer slumps" has already emerged. Economists are unlikely to be so panicked by a single, and somewhat mixed economic number.
  • Portugal's courts ruled that four of the nine government austerity measures were unconstitutional, which means that around 20% of the austerity program has been lost. The government has been trying to reassure over the weekend, but the Portuguese bailout is now vulnerable.
  • The Nikkei Shimbun reports that the Bank of Japan will start it's bond buying program with JPY1.2tn of purchases this week. Meanwhile there are reports of a Japanese bank purchasing a European bank's US real estate lending - Japanese banks may be more interested overseas than at home.
  • German industrial production data is scheduled - with German exports very dependent on European demand, production may very well be impacted by the Euro problems. US Fed Chairman Bernanke is scheduled to speak on bank stress tests.

Click here to listen to our latest daily economics briefing.