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  • We can be pretty certain that yesterday's 4% US GDP number is wrong - because as the revisions to past data showed, GDP estimates are normally wrong. The trend is clear,
    however - the US is performing at or a bit above potential growth.
  • The growth data may have helped the hawkish elements of the Federal Reserve. As the arguments about tightening rest on uncertainties over structural change, the statement could offer only limited insight into how quickly rates will rise.
  • Japan saw real wages fall 3.8% yoy in June, with May revised down. Japanese consumers tend to perceive inflation as being higher than it is (thus real incomes lower). The wage picture must improve if Abenomics is to have any hope of success.
  • Euro area consumer price inflation is expected to show inflation, not deflation (because deflation was a Draghi-inspired myth at the Euro level). Elsewhere, Argentina has been declared in default to no-one's great surprise.

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