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Florence and the machine

| Posted by: Paul Donovan | Tags: Paul Donovan

  • UK Prime Minister May is to deliver a speech in Florence in the ongoing EU-UK/UK-EU divorce proceedings. The speech could be an impassioned appeal to the unity of nations. More likely, it will be a recitation of a list of proposals around EU citizens' rights and money. Markets are not likely to react too much to something that is just a mechanical detail in a negotiation process.
  • The President of North Korea called the President of the United States "mentally deranged". Markets did not react to this assessment. The President of North Korea also threatened an H-bomb test – markets reacted a little, but not very much.
  • In China, one of the credit rating agencies – it does not matter which – downgraded China's sovereign credit rating from something – it does not matter what – to something else. None of this matters to markets. We do not expect a debt crisis in China.
  • Opinion polls on business sentiment are due in the form of various purchasing managers' surveys. The correlation of these indicators with economic reality has weakened noticeably in recent years. The French are also offering final second-quarter GDP data.