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The end of easing?

| Posted by: Paul Donovan | Tags: Paul Donovan

  • US growth weakened on the headline (in line with expectations) but showed strength in the detail. Perhaps the most telling feature is the media reaction. Rather than putting a negative spin on the headline, the tone has been positive. We probably have the FOMC to thank for that.
  • Japan declined to ease central bank policy any further. The issue of additional quantitative policy is controversial as a good case can be made that it is doing more harm than good to the domestic economy.
  • Euro area harmonised inflation is due, and as oil base effects ooze out of the data we should return first to positive inflation and then to over 1% inflation. The German data surprised the market on the upside yesterday.
  • The US is offering labour market data with the quarterly but comprehensive employment cost index, and personal income and spending numbers. The spending data is accompanied by the Fed's favoured inflation measure, the PCE deflator.