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Da mihi castitatem et continentiam, sed noli modo

| Posted by: Paul Donovan | Tags: Paul Donovan

  • Catalonia's regional parliament has asked for independence, just not yet. Bank deposit moves should be monitored in the next few weeks. As with Scotland's earlier independence referendum, a successful independence bid would almost certainly mean leaving the monetary union. The cost of moving bank deposits out of Catalonia is low. The cost to bank depositors of leaving the monetary union is high.
  • The US Federal Reserve publishes minutes of its last meeting, and three speakers crowd the agenda. Investors look for a December rate hike. Beyond that, three Fed vacancies and a Fed Chair in limbo create uncertainty about policy. 
  • The UK has Prime Minister's Questions in the House of Commons. Normally, this is just an example of amateur theatricals. However, PM May has refused to indicate a preference in a hypothetical second referendum on EU membership – although indicating that there was no chance of a second referendum. The EU is also suggesting no deal by December means no deal. 
  • German Chancellor Merkel has indicated possible acceptance of the idea of a euro area finance minister. The additional condition "as long as they are German" was not spelled out, but former German finance minister Schaeuble is, of course, available.