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Paul Donovan - Update

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  • The Bank of Japan decided to conduct policy with a stance of masterful inactivity (at least as far as changing policy is concerned). In a sense there is nothing more monetary policy can accomplish, but we still expect more accommodation to be offered.
  • The German government is expecting 2% growth in 2015, with the Euro area (its main export market) providing support. This optimism chimes with ECB commentary, which has been emphasising that there is no deflation risk in Europe.
  • UK industrial production is due, and while not a major part of the UK economy it is something that attracts political attention. The BCC smaller business sentiment measure showed broad strength, including in export data.
  • The US is also offering up small business sentiment, with the (perhaps somewhat politicised) NFIB survey. Anglo Saxon small businesses have put more than normal emphasis on labour hiring as a vehicle for expansion, which may be worth monitoring.

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