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Payrolls and pain

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  • The US employment report is forecast to come in relatively good, with a 200,000 non farm payrolls and a small decline in unemployment to 7.4%. That should keep alive the debate about when the fed scales back quantitative policy.
  • The ECB seems to be tilting in the other direction. Draghi's press conference yesterday certainly prepared the ground for further accommodation, noting the spread of economic weakness (Germany) and that monetary policy might be more effective now.
  • Japan has seen yet more market volatility, with officials not really responding particularly strongly. However there are reports of an announcement of possible changes to the government pension fund asset allocation, which may contain volatility for now.
  • Non-US data flow is relatively light. There is UK trade, and German and Spanish industrial production - overshadowed by the US employment report. A credit rating agency put Brazil on negative outlook - overshadowed by nobody caring.

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