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Europe's deflation is showing (in part)

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  • Markets continue to digest the aftermath of the US payrolls report â€Â“ which is reported in the media as being weak (economists would add many caveats to that statement, relating to the tendency for the BLS to revise, and the adverse weather).
  • The US data is soft enough to prevent expectations of a more aggressive Fed tightening, but not enough to prevent a scaling back of quantitative policy in our view. We have Lockhart of the Fed scheduled to speak today.
  • The Euro area data calendar is woefully quiet, although there will be consumer price inflation figures from Portugal and Greece. Both countries are expected to exhibit deflation â€Â“ which might be seen as competition enhancing and debt threatening (though CPI is the wrong measure for either consideration).
  • Asia is quiet with japan on holiday, although political events in Thailand may attract attention. Opposition protestors are deliberately seeking to disrupt the economy with a blockade of central Bangkok.

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