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  • The UK reported weaker (nominal) retail sales data from the BRC, led by weaker food sales - although some of this may be due to price discounting. Industrial production is expected to accelerate a little.
  • French industrial production is expected to contract in contrast, although the contrast with the UK is not especially pertinent; it is the contrast to other parts of the Euro area that matters. Interestingly French economic weakness has come in spite of the relative resilience of domestic bank lending.
  • Italian final first quarter GDP is expected to be negative, occasioning no surprise to anyone, as bond yields reach record lows. Greece will display one of the rare instances of deflation in the Euro area.
  • China selectively cut its reserve requirement ratio yesterday, in another instance of the steady dripping of stimulus onto the economy. The measure itself is not that pertinent (we do not see the reserve requirement constraining growth) - the commitment to keep stimulating is pertinent.

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