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  • US housing sales were softer than expected, but the inventory data and price rises suggest that this owes more to a lack of supply than to a lack of demand. With nearly a third of homes purchased using cash, it seems unlikely that mortgage rates are a meaningful constraint.
  • The Bank of Japan is promising to keep on printing in support of Abenomics. Meanwhile the government's annual report is waxing lyrical about the benefits of a consumption tax hike next April (a decision on whether to press ahead with that is due in the autumn).
  • Chinese Premier Li indicated that the growth rate will not be allowed to fall below 7%. This makes political sense �€“ the new politburo is unlikely to want to risk rising unemployment with associated social tensions. Equally, however, they will not want asset bubbles forming.
  • Europe can continue to relax as Portugal's government clings to office. The Bundesbank monthly report indicated support for the idea of a Euro banking union, although the political will to pursue this still seems to be sadly lacking.

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