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Confidence and credit

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  • European leaders had an informal dinner last night. It produced a bill for European taxpayers, which is all it was expected to do. Ahead we have M3 money supply data which will jut underscore the ECB's problems with the money transmission mechanism in the Euro area.
  • Euro business and consumer confidence is due (the headlines should be pretty stable to very slightly positive). In the wake of the election results the potential for divergence of sentiment is perhaps going to be the investor focus for the future.
  • Newswires are carrying speculative reports that China may selectively ease credit policy, indicating it must be a slow news day. It does not matter if it is true or not - "China" and "easing" in the same paragraph will provoke a market response.
  • The US is achieving a Zen like state of tranquillity and not really doing very much new in economic terms. The strength of durable goods data was enough to get a market response yesterday. Lockhart of the Fed gave middle of the road comments on policy overnight.

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