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A certain lethargy

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  • Markets await the Fed tomorrow (with a certain sense of lethargy. It would be nice if they could just get on with the ending of quantitative policy). We have Conference Board consumer confidence today, forecast soft at 83.5.
  • Israel unexpectedly cut interest rates to 0.5%, citing the "effect of security events" on Israeli GDP. The impact of the current situation on the world economy outside of Israel is limited in the absence of energy price moves.
  • Japan had mixed data: unemployment, up but better jobs: applicant data; household spending up but weaker retail data. The latter may indicate consumers are forced to spend more on higher priced essentials, having less free cash to spend on non-essentials.
  • UK consumer credit and mortgage data is due. Ultimately house prices (a media focus) should not worry a central bank per se, but excessive leverage arising from higher house prices should worry a central bank.

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