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Real news at last

| Posted by: Paul Donovan | Tags: Paul Donovan

  • North Korea's latest missile test has not had any lasting impact on financial markets. This is normal – markets almost never price in extreme risks. US President Trump had suggested the use of trade sanctions to encourage China to pressure Korea – but has begun a trade protection process against China anyway (over aluminum).
  • US GDP is due to be revised today (it will be revised many times in the future). Markets tend not to pay much attention to revisions, preferring instead to reflect inaccurate first release data. The Euro area has consumer price inflation from Spain and Germany, but the ECB's near-term policy path is sufficiently secure as to reduce the relevance of this data.
  • You cannot move today without tripping over a central banker rushing in the direction of a microphone. Uncertainty about central bank policy is relatively low at the moment, however. The US Fed's Beige Book is due (ahead of the December FOMC, expected to raise rates). Fed Chair nominee Powell offered some dovish comments yesterday.
  • Media reports suggest a deal of deliberate vagueness has been done for the UK alimony payments to the EU. The Irish question remains (as does the Irish government, which avoided a no-confidence vote).