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| Posted by: Paul Donovan | Tags: Paul Donovan

  • Foreign exchange dealers have become experts in French politics (how many foreign exchange dealers can speak French is a moot point). The aftermath of the French presidential debate has seen the euro strengthen as opinion polls (those ever-reliable predictors of the future) suggested Macron outperformed Le Pen.
  • The UK government has given 29 March as the date when Article 50 will begin the long goodbye from the EU. UK inflation is due and should show some of the consequences of sterling weakness. However, companies have absorbed some of this in profit margins, allowing UK inflation to rise less than expected.
  • German inflation pressures continue to build, with producer prices rising strongly yesterday. German and Euro area inflation has tended to surprise to the upside in recent months, under local labor market pressures. International forces (beyond commodity prices) are not especially relevant to the story.
  • US fourth-quarter current account data is due. Traditionally, this has not been important, but objectively reducing the deficit could be considered a measure of whether "Make America Great Again" has succeeded. Economists would argue that the current account is no signal of greatness, but politics has elevated its importance.