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Populism is popular again

| Posted by: Paul Donovan | Tags: Paul Donovan

  • US opinion poll volatility gives something for everyone in financial markets. The risk is that investors' existing views are reinforced and opposing views are dismissed through selectively referencing news. The Mexican peso weakened; there is a degree of homogeneity to traders' backgrounds which may influence their views.
  • The Canadian-EU-Wallonia trade deal was signed over the weekend, ending one aspect of political populism. In Iceland, the populist Pirates party denied the government a majority without winning enough support to form their own government. Spain, however, has managed to get a government in place.
  • US income and spending data is due, along with the personal consumer expenditure deflator (the Fed's inflation focus). The headline PCE deflator should increase, and the core measure is expected to come in exactly in line with its 20-year average.
  • UK credit data is due, including mortgage lending figures. Euro area Q3 GDP is not likely to influence markets much (given it masks divergence at a national level). German retail sales may attract some attention as German pay increases boost consumer spending power.