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Onwards

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  • Mega Wednesday showed surprisingly little change to the economic outlook. The Bank of Japan did not change inflation forecasts. European banks intend to stabilise lending (and deflation became a more remote prospect). The Fed scaled back quantitative policy again.
  • The surprise in yesterday's data was a weaker than expected Q1 US GDP print, though the details were not as weak. The Fed chose to see this as weather related, and concentrated on the momentum. The Chicago PMI was strong yesterday, ahead of an expected gain in the ISM today.
  • The UK is offering credit data including bank lending for mortgages. With the Land Registry house price index stronger than expected (and now showing a rising house price:GDP ratio), the Bank of England may be more focused on housing related issues.
  • Europe will be off, celebrating International Labour Day by not working. Labour (and not working) remains a key social issue in Europe, and has helped the rise of extremist parties. May Day rallies may offer an outlet for protest, which might matter to markets.

Listen to the audio version of this briefing.