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The British are coming

| Posted by: Paul Donovan | Tags: Paul Donovan

  • The US Federal Reserve acknowledged that British influences are growing within the US – uncertainties over the UK's EU referendum having a bearing on the decision to leave policy unchanged. The financial sector may not be as integrated as in 2007, but contagion is a valid concern.
  • Concern about the US labour market was also expressed – perhaps an irrational level of concern, as it is not clear whether there is a problem with demand or supply. Inflation expectations were acknowledged to be all over the place depending on whether you look at markets or consumers.
  • UK retail sales and the Bank of England meeting are likely to be ignored. An opinion poll published yesterday indicated a large drop in support for "remain" in Scotland (though still a majority in favour), with views on independence more balanced.
  • Euro final CPI is not expected to show anything terribly interesting. US CPI inflation may creep up a little on the core measure – most measures of inflation in the states are around or above their twenty year averages.