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Drama (political not market)

| Posted by: Paul Donovan | Tags: Paul Donovan

  • The Italian political drama continues, with the two "anti" parties suggesting coalition negotiations are in the "final stretch". A leaked document suggested they were working towards a larger fiscal deficit and the ECB cancelling the Italian bonds it bought under quantitative policy. The latter is easy, as the ECB bought no Italian bonds (the Bank of Italy did). The leak was denied by the parties, but may raise some concerns.
  • North Korea has cancelled ministerial meetings with South Korea "indefinitely". This is unlikely to affect the summit with US President Trump, as North Korea has been trying to get a US president to agree to such a summit for years. The Turkish lira had a rather bad day yesterday, following some unorthodox economic ideas from Turkish President Erdogan.
  • Japanese first quarter GDP was weaker than expected, with the consumer doing nothing and business investment falling. The normal suspects of bad weather and bad seasonal adjustment are being cited.
  • There are a couple of central bank speakers scheduled – the Fed's Bostic and the ECB's Praet. Eurozone final CPI for April can be politely ignored. US industrial production might have mattered if the US made very much nowadays, but they really don't.