We must have discipline. Apparently.

Posted by: Paul Donovan

23 Oct 2019
  • France, Italy and three other Eurozone countries have been told to go home and do their maths homework again. Their budget proposals do not satisfy the European Commission. Does this matter? Sort of. The Teutonic cry of "we must have discipline" is still being heard in the Eurozone despite outgoing ECB President Draghi's desire for fiscal stimulus.
  • The interminably tedious EU-UK divorce process is not moving ahead because it is interminably tedious. UK Prime Minister Johnson won a vote in the House of Commons, but then reverted to normal and lost a vote in the House of Commons. The EU is signaling that an extension will be allowed. A general election seems relatively likely.
  • The impeachment hearings into US President Trump have created some more noise. However, markets are likely to remain indifferent. Relations between the White House and Congress can hardly be made worse by the impeachment process, and the 2020 elections are too far off for markets to consider the effect.
  • Assorted confidence opinion polls are due from the Eurozone and France, but being confidence data can be downplayed in terms of importance.  Sweden and the ECB offer interest rate decisions – this is Draghi's last meeting as ECB president.

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