Follow Paul Donovan

The end is nigh

| Posted by: Paul Donovan | Tags: Paul Donovan

  • The European Central Bank meets. It is time for ECB President Draghi to start a rehabilitation program to overcome a worrying addiction to easing. We could see a change in the ECB statement, recognizing Euro area economic normalization. This is not the end of quantitative policy easing, but the end may be near.
  • Japanese first quarter growth has been revised. This is not a surprise. Growth estimates are wildly random guesses, and subject to frequent revision. Unusually, growth was revised lower – mainly due to inventories. Euro area growth is to be revised later today.
  • Today is not just about economics. Former FBI director Comey testifies to Congress. The greater the political outrage, the greater the importance to markets. Political outrage is time consuming – time spent being outraged is time that cannot be spent on fiscal policy or on providing leadership.
  • Final opinion polls in the UK General Election show a Conservative lead of between 1% and 12%. UK opinion polls are not treated with that much respect. A parliamentary majority of fifty seats or more would probably be regarded as a Conservative success. A hung Parliament or a small majority would probably weaken sterling.