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The Greco-German Groundhog Day

| Posted by: Paul Donovan | Tags: Paul Donovan

  • Friday's US employment report was seemingly unaffected by the weather, and has finally convinced markets that the Fed will join other central banks in tightening policy (in the US case, monetary policy) in June. Economists have been convinced of this for some time, of course.
  • The Eurogroup of finance ministers meets, with Greece's reform proposals likely to be rejected and therefore no cash to be given. The Greek finance minister is saying wages and salaries will be paid but makes no promises about anything else (like debt holders). The Greek Prime Minister is threatening a referendum.
  • Chinese exports in February were far stronger than expected, though impacted by the lunar new year. The figures were more impressive as the strength of the dollar will have reduced the value of exports to Europe and Japan. The data hints at a relatively healthy pace of demand in the rest of the world.
  • Japan may be the exception to the "healthy demand" rule, with GDP revised lower for the end of last year, slowing momentum into the start of 2015. Japanese exporters took advantage of the weak yen to increase profit margins not market share, and by doing so have not directly contributed to GDP.