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Why Scotland may only be for the brave

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  • One poll in Scotland put the pro-independence vote ahead (for the first time this year). A second poll continued to show the pro-union view leading. Sterling has already reacted to the former, weakening in Asian trading.
  • A risk in Scotland, in our view, is that there is a Québécois scenario - a narrow rejection of independence that leaves open a risk of a further vote. We believe this would have implications for banking, gilts, direct investment into Scotland (from overseas and the rest of the United Kingdom), and sterling.
  • The IMF's Lagarde has declared that the Euro is not overvalued (comments that will not win her much support amongst Euro area politicians, who prefer blaming the currency to blaming themselves). China's trade data showed reasonable levels of international demand for Chinese exports, but weaker Chinese imports.
  • The US is only offering consumer credit data - interesting but not a major release. Friday's labour market data should be viewed as a correction to bring the payrolls figures back in line with the trend, but the details do at least hint at the idea of a tight labour market.