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Mixed signals

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  • Japan's base money continues to surge, a testimony to the achievements of Abenomics. Unfortunately Japanese wage growth continues to decline (the key measure down 0.2% on the year), a testimony to the limits of Abenomics.
  • Australian interest rates were left unchanged overnight, as expected, with the accompanying statement from the RBA not significantly altered either. However, the central bank has seemingly signalled that it has no concerns should the Australian dollar fall further.
  • The second quarter BCC survey of business sentiment in the UK showed clear strength, with improvements in both exports (aided by US growth, no doubt) and domestic demand. However, as with all sentiment surveys there should be some caution in interpreting the strength of the results.
  • The data calendar is relatively quiet in both Europe and the United States. Geopolitics might intrude on financial markets, with the army's ultimatum to politicians in Egypt possibly attracting some attention.

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