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Insecure investors?

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  • Tartan tracking - Bank of England governor Carney  suggested that Scotland could not have a monetary union with sterling as an independent country. Concerns over separatism as a trend may have contributed to the underperformance of Spanish bonds yesterday.
  • Some risk markets reacted to an academic paper from the San Francisco Federal Reserve suggesting that expectations of US rate increases were too conservative. While we agree with the sentiment, the fact that something like this could provoke a reaction suggests a significant degree of investor insecurity.
  • Bank of Japan deputy governor Iwata has joined the "talk down the yen" strategy, suggesting a weaker yen would be good for Japan's economy. A weaker yen would be good for Japanese exporters' profits. The economy only benefits to the extent that those profits are put to work in Japan.
  • The data calendar is relatively light. French and Spanish industrial production data is unlikely to offer a flattering contrast for France - investor concerns within the Euro area have shifted towards France in recent months. Portuguese and Greek inflation figures are also due.

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