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Striking down austerity

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  • 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.

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