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Sentimental slush

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  • Business sentiment data is the main highlight for the day ahead - though as always this comes with the caveat that some indicators have shown a tendency to overreact to the underlying economic situation.
  • Euro sentiment should show ongoing economic expansion, though nothing especially dramatic is expected. The divergence in the details is more of a focus for policy makers, but the overall expansion should help dispel deflation concerns.
  • UK CBI sentiment data is likely to be overshadowed by the minutes from the Bank of England. With forward guidance now decently interred, and expectations that the Bank may lead the tightening cycle for the world's major central banks, the minutes will be of interest to investors.
  • Chinese flash sentiment data offered no surprises to the markets (technically it shows contraction. The Chinese economy is not contracting). Australian inflation numbers were lower than expected, pushing the Australian dollar lower.

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