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Reality bites

| Posted by: Paul Donovan | Tags: Paul Donovan

  • Yesterday saw a sharp drop in the US New York Federal Reserve's opinion poll on business sentiment. The convergence of overinflated sentiment data with economic reality is overdue. Industrial production data today should confirm an economy operating around trend.
  • The Turkish lira has remained fairly stable in the wake of the weekend's referendum, which gave a narrow margin in favor of an executive presidency. As is increasingly common in modern politics, an urban/rural divide was on display with major cities voting against.
  • Markets are now looking ahead to the French presidential election on Sunday, with polls showing slight gains for Macron and Le Pen. The top four candidates are (just about) within the margin of error of getting a place in the second round. Polls indicate Macron defeating any second round contender.
  • The situation in Korea (or rather, in Korea and on Twitter) has so far had limited impact on financial markets. The Korean won and equity market remain stable. Meanwhile in Japan, the government has proposed two relatively dovish economists to join the Bank of Japan.