Summary
- The US Federal Reserve minutes suggested interest rates would rise "fairly soon". There does not appear to be enough preparation to indicate March, and we believe soon means June. Interestingly, the Fed is clearly considering an acceleration of its quantitative policy tightening program.
- US Treasury Secretary Mnuchin suggested that a strong dollar was a sign of confidence in the US economy under President Trump. That statement may cause problems in the future, as international investor concerns about policy uncertainty suggest the US may struggle to finance its USD 2.7bn per day borrowing requirement at today's dollar level.
- German revised GDP is due today – of course there are more revisions to come. Revisions to data are getting larger as a rule. The UK government might indulge in some Schadenfreude if German data were revised weaker; the UK lost the "fastest economy in the G7" title to Germany after its own data revisions yesterday.
- Central bank speakers are on the agenda. Lockhart is marking a decade at the US Fed, Kaplan of the Fed is also speaking, as is the ECB's Praet. The ECB has preannounced policy and the Fed has given us plenty of information, so these comments are likely to be just background noise.
