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Chicken Little goes to China

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  • The Fed minutes were a relatively lengthy backtracking from Fed Chair Yellen's assertion that there would be six months between the end of quantitative policy and the start of monetary tightening. Markets (perhaps unwisely) have chosen to take this as a dovish signal.
  • The sky is falling in Asia, or at least Chinese exports are falling. Except that they are not falling. Chinese trade data was weak, but adjusted for last year's over-reporting the figures show a steady pick up in Chinese exports, consistent with circa 3.5% global GDP growth.
  • Bureaucrats in Brussels will doubtless be celebrating as Greece returns to the bond markets. Unions in Greece marked the occasion by going on strike. Markets are presumably betting that any future restructuring will be for public-held not private-held debt.
  • Consumer price inflation is due from several Euro area economies (Greece and Portugal are expected to produce negative figures, but the Euro area is not). The result of yesterday's Bank of England meeting will be revealed to a completely indifferent world.

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