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  • Portugal gave a timely reminder to markets of the presence of risk, and the specific challenges Euro area banks pose to the Euro area economy. If markets become more volatile, that volatility can create contagion via capital requirements for other banks.
  • The calmer tone to Asian financial markets gives hope that the current problems can be confined to Portugal, but the ECB's challenges clearly remain. Consumer price inflation from Spain and Germany will underscore divergence within the Euro monetary union.
  • Japanese economics minister Amari was saying that monetary policy was up to the Bank of Japan, before telling the Bank of Japan what it should do (be more dovish, essentially). The Wall Street Journal has an article suggesting ordinary Japanese are starting to question the illusion that is Abenomics.
  • The US has two dovish leaning Fed speakers - Evans and Lockhart - whose remarks are likely only to show the range of opinion on the FOMC, and thus the need for a risk premium to reflect uncertainty.

Listen to the audio version of this briefing.