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Polarising politics strikes again

| Posted by: Paul Donovan | Tags: Paul Donovan

  • Fed Chair Yellen did not add much to investors' information on policy and the economy. Her appearance was an opportunity for partisan point scoring by politicians.
  • Should investors care? Yes, because the increasingly polarised nature of politics in the US and elsewhere makes pricing in possible outcomes more and more difficult. Polarised politics is an investment problem.
  • The ECB has announced it will accept Greek debt as collateral in exchange for cold, hard cash. Greek bonds are not yet part of the quantitative policy program. Preliminary PMI sentiment data is due out today.
  • The UK EU referendum has no official exit polls, but an opinion poll is expected to be conducted today and published after 2200 UK time. Turnout will be closely watched, and first results should come in at 0030 UK time on Friday.