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Does 0.4% of a wrong number matter? Maybe

| Posted by: Paul Donovan | Tags: Paul Donovan

  • Italy has a budget proposal that forecasts a 2.4% GDP deficit. The deficit number will almost certainly be wrong. The GDP number will almost certainly be wrong. That will not stop some people trying to turn two wrongs into a debt crisis.
  • Euro area consumer price inflation data is due. Market consensus is for a 2.1% y/y rate. The ECB target is to be below 2%. The core number will be lower – but as ECB President Draghi made such a fuss about the headline number when that was the lower figure, presumably it also matters now it is the higher figure.
  • UK GDP is due to be revised (and will continue to be revised). The Bank of England is famously dismissive of the quality of the data, but it has political resonance with preparations to cut the EU off from the UK single market. Spanish GDP is also due for revision.
  • Japanese consumers showed some signs of life in the recent data, with retail sales higher than expected and consumer price inflation rising. Industrial production was less than expected, however. The US is offering their consumer data with personal income and spending numbers, and the PCE deflator measure of inflation.