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Sanctions

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  • The EU and US have escalated sanctions against Russia in oil technology, finance and arms (not the sale of French ships, those sales are exempt). The main consideration outside of Russia is less direct exposure (which is limited) and more the impact on international politics.
  • The US FOMC is expected to be a bit of a "filler" policy decision - another USD10bn reduction in quantitative policy, but this is not yet the time for clear signals on interest rates. US Q2 GDP should reverse the Q1 weakness.
  • Euro area bank lending comes under scrutiny with the bank lending survey. This matters because Draghi's crossing the monetary policy Rubicon was in part motivated by a desire to ease credit lending standards.
  • German consumer price inflation is due and worth a glance - look for the role of food prices, which are mainly labour cost driven but have allowed inflation to weaken hitherto. This does not seem a sustainable position in the months ahead.
 
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