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Europe cut off from UK

| Posted by: Paul Donovan | Tags: Paul Donovan

Japanese consumers showed themselves to be less than enthusiastic in retail data overnight. With the spring pay round approaching, this might be interpreted as a lack of confidence in wage gains. Japanese consumers believe consumer price inflation will be high, and this may also impact their shopping prowess.

US Fed President Evans is speaking again. Evans has been rather vocal of late, and there is unlikely to be anything new in the comments. Rosengarten and Williams of the Fed also speak, and may add more insight – there is at least some novelty value in their comments.

Fed Vice Chair Fischer has suggested that another two rate hikes would be about right. More relevant for the markets is what else happens, or might happen, this year. Quantitative policy tightening is being discussed, and Fischer is believed to be a strong advocate of action in this area.

UK PM May has posted her Article 50 letter to the EU, informing them that they are to be cut off from the UK. The details may give a sense of the direction of negotiations, but this is the start of a lengthy process; it would be unwise to emphasize today's theater.