Once the European debt crisis is resolved one way or another the focus will shift to the UK and the US.
California announced Thursday it’s deficit is 10% higher than anticipated. There are 45 US states in the exact same situation as the Southern Euro nations.
MOPE can only forestall the inevitable for so long.
Finnish foreign minister says “We have to face openly the possibility of a euro-break up”…
but Finnish Europe minister insists Finland is “100% committed to the euro“
Paul Donovan, managing director of global economics at UBS, says:
Finland’s foreign minister suggests the euro area should prepare for break up – at least, that would be the sensationalist interpretation of his remarks. What he actually said is that it is sensible to plan for every contingency. It does however imply that Finland has not yet planned for this particular contingency.
It is Friday and there are few data releases to contend with. As such, it seems fertile ground for market speculation on random topics. Today’s favoured topic would appear to be Spain and EFSF assistance – though with Spanish two year yields resolutely below 4%, the need for assistance is not pressing.
US Michigan consumer confidence data is due [at 1.30pm BST], and forecast to weaken. One problem with sentiment data is whether it reflects what people feel, or what people think they should feel when the media keep telling them how awful everything is.
Generally this week’s US economic data has continued to provide a mixed picture of the economy. There are signs of some modest economic improvement in some areas (labour markets, housing) but some moderation elsewhere. It is not really a backdrop that suggests the Fed will rush to do quantitative policy.