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The aftermath

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  • The aftermath of the employment report that was bad on the headlines but good on the details leaves room for markets to indulge in a broad spectrum of expectations. The Congressional testimony of Yellen (Tuesday and Thursday) should keep expectations of a steady taper, but with stable monetary policy.
  • Europe is exhibiting signs of "blame the foreigner" again. The French industry renewal minister is calling for a weaker Euro, presumably in the mistaken belief that a weaker Euro will right the many economic wrongs of the Euro area. The Swiss narrowly voted for curbs on immigration over the weekend.
  • The Tokyo gubernatorial election saw a victory for PM Abe's anointed candidate, who is in favour of restarting the nuclear power plants. Consumer confidence weakened again, however, perhaps reflecting the damage of higher energy prices and poor wage expectations.
  • The data calendar is pretty quiet - some industrial production figures from parts of Europe, and that is about it. The US debt ceiling was raised and simultaneously met on Friday, so the US government is living off special measures for the time being.

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