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Who runs monetary union breakups?

| Posted by: Paul Donovan | Tags: Paul Donovan

  • Merkel and Hollande meet in Berlin, in the wake of "constructive" talks with Tsipras of Greece over the weekend. A solution should be the base case, but, it is as well to remember than monetary unions normally die because of bank runs. Bank runs are irrational not rational, popular not political, emotional not economic.
  • Manufacturing sentiment comes out from various corners of the world economy today. The Chinese are expanding (their manufacturing PMI says so). The Europeans are expected to expand (their PMI holding stable in positive territory). The US is expected to expand.
  • Away from the somewhat flaky data of manufacturing sentiment the Germans are offering up consumer price inflation. Although the number is still low in absolute terms (the lingering effects of the oil price decline) the data has surprised positively this year - which raises political tensions around ECB policy.
  • US personal income and spending data is due. The spending data is noteworthy as international trade and domestic employment have been suggesting a more robust consumer than retail sales figures have indicated. The core PCE deflator, the Fed's favoured inflation figure, is also released with the numbers.