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Author: Adam Button
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We knew a delay was coming but didn't know the end date

Many reports have virtually confirmed that Japanese Prime Minister Abe will announce a delay in the planned 2 percentage point rise in the consumption tax to 10%. We didn't know how long the delay would last.

The tax hike was slated to go into effect in April 2017 but it's now been delayed more than two years until Oct 2019, according to Nikkei. They report Abe told senior members of the LDP on Saturday night.

Meanwhile, the idea that governments will monetize debts is gaining traction and Japan is sure to be the first to the party. Odds are this hike never takes place at all.

As for the market reaction, a delay has been widely speculated for months and scattered reports over the past two weeks showed it was imminent. The larger event on the economic calendar to start the week will be Japanese retail sales for March, which are due shortly after the open.

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Author: Adam Button
14

A paradigm shift is under way on deficits

What happens in a world where government spending doesn't matter? If you can print your own money, you can issue unlimited. The only risks are inflation and a decline in the currency.

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Author: Adam Button
11

This feels like a vote against a Brexit

The top trade of the week had a distinctly pro-European vibe The clock is ticking down towards the Brexit referendum but a non-stop scaremongering campaign promising a punishing recession and untold job losses has spooked voters who were dabbling with the idea of protest vote.

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Author: Adam Button

ForexLive Americas FX news wrap: Yellen says a hike is probably coming

Forex news for US trading on May 27, 2016: Markets: - S&P 500 up 9 points to 2099 - Gold down $8 to $1212 - WTI crude down 20-cents to $49.49 - US 2-year yields up 4 bps to 0.91% Most people thought Yellen's appearance on Friday would be a dud but she delivered a clear-ish message that a rate hike is coming.

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Author: Adam Button
2

The key quote: Exactly what Yellen said on Friday

The wording wasn't the most elegant but the meaning was clear "It's appropriate, and I've said this in the past, I think for the Fed to gradually and cautiously increase our overnight interest rate over time and probably in the coming months, such a move would be appropriate," Yellen said on Friday.

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Author: Adam Button
2

S&P 500 weekly close is the highest since November

Big week for stock markets The S&P 500 finished at the highs of the day on Friday, climbing 9 points to 2099. That's the highest weekly close since November and a fraction away from the highest weekly close since July 2015.

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Author: Adam Button
6

Euro set to close below key level but another level looms

EUR/USD sags to the finish line Barring a last minute jump, the euro will finish the day near the lows and at the worst level since March 16. Perhaps more importantly, it will close below the 61.8% retracement of the March-April rally. That puts the entire move in jeopardy and points to a return to 1.08.

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Author: Adam Button
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CFTC Commitments of Traders: Dollar bulls return, AUD longs bail

Weekly positioning data from the CFTC for forex futures as of the close on May 24, 2016: - EUR short 38K vs 23K short prior week - GBP  short  33K vs. 38K short prior week Yen and Australian dollar longs jumped ship and euro shorts jumped.

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Author: Adam Button
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The failure of antibiotics will have world-changing repercussions

Today is a watershed day health science The discovery of antibiotics is one of the greatest human achievements of all time. In 1928 Alexander Fleming discovered penicillin and it's saved hundreds of millions of lives since.

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Author: Adam Button
1

Your latest signal that hedge funds own governments

Connecticut gives $21 million to Bridgewater Associates Ray Dalio's Bridgewater Associates threatened to move his offices out of Connecticut to New York and, in response, the Connecticut government cut him a cheque for $21 million,

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Author: Adam Button

Striking Verizon workers reach deal -WSJ

39,000 striking workers to go back on the job The WSJ that an east coast strike of Verizon workers is close to ending after an 'agreement in principle' was reached.

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Author: Adam Button

Doubtful Yellen begins on time

Bernanke is doing an intro She's slated to start at 1:15 pm ET (1715 GMT). Bernanke is in the midst of a little intro at the moment. The webstream below is garbage. Harvard gets an F in Webstreaming 101.

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Author: Adam Button
4

Baker Hughes US rig oil count 316 vs 318 prior

Weekly oil drilling rigs from Baker Hughes - Fresh low since Oct 2009 - Prior was 318 for oil rigs (no change from the week before) - Natural gas rigs +2 - Prior was 85 for natural gas rigs The pace of the decline in oil rigs has slowed. That's understandable given the rebound in oil prices. The market expects US production to fall to around 8 million barrels per day from 8.9 mbpd currently but with oil near $50, there are risks they could put drilling rigs back to work.

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Author: Adam Button
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Watch Bernanke and Yellen speak live now

Yellen to take questions following a speech from Bernanke The event started a few minutes late but it's underway now. Yellen is scheduled to speak at 1:15 pm ET (1715 GMT) but Bernanke will speak first so things could run late. She is scheduled to take questions from a moderator for about 30 minutes.

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Author: Adam Button

EUR/USD consolidates near weekly low - orders

EUR/USD down 61-pips to 1.1133 The euro narrowly fell below Tuesday's low of 1.1127 to the worst level since March 16. Bids: - 1.1128 - 61.8% retracement of March-April rally Offers:

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Author: Adam Button
1

Watch Yellen; sell JPY rallies vs EUR - Credit Agricole

Credit Agricole ahead of Yellen Looking ahead it will depend on to drive sentiment further. However, even if she decides in favour of a more hawkish rhetoric it must still be noted that any tightening of monetary policy will depend on incoming data and will be gradual in nature. As long as improving US growth prospects compensate for higher rates overall sentiment does not need to weaken sustainably. Last but not least it must be noted that it is no certainty that Yellen will make any strong remarks with respect to monetary policy prospects.

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Author: Adam Button
5

Nigerian oil production continues to plummet, may be at 22-year low

Rebels sabotaging oil supplies Nigeria is pumping as little as 1.1 million barrels per day, Platts reports. That would be a 22-year low. The nation has the capacity to pump at least 3 million barrels per day but outages and sabotage.

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Author: Adam Button

European stocks flatten out but finish the week up big

Closing changes for the main European bourses: - UK FTSE - flat - German DAX +0.1% - French CAC -0.2% - Italy MIB -0.2% On the week: - UK FTSE +1.6% - German DAX +3.7% Despite the gains, most indexes are still rangebound.

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Author: Adam Button

New York Fed boosts Q2 GDP forecast to 2.2% from 1.7%

New York Fed NowCast The GDP tracker from the New York Fed increased for the third week in a row. "Positive news came from new single family houses sold and manufacturers' new orders of durable goods," the report said.

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Author: Adam Button
1

Canada reports a jump in March deficit to narrowly avoid fiscal year surplus

Government spending rose ahead of fiscal year-end The Canadian government was blatantly trying to push up spending in March in order to avoid reporting a balanced budget for the year. The reason is that the new government, led by Justin Trudeau, wanted to avoid the optics of inheriting and squandering a balanced budget.

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Author: Adam Button
1

US dollar higher ahead of Yellen. EUR/USD falls to weekly low

Dollar strengthens across the board A solid bid continues to slowly boost the US dollar. EUR/USD broke 1.1150 then touched a weekly low of 1.1126 (breaking Tuesday's low by a pip). Yellen speaks later but continued talk of European demand for dollars ahead of the weekend is doing the rounds.

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Author: Adam Button
1

Falling inflation expectations a key subplot in U Mich survey

Fed closely watching inflation survey Chairman Curtain said in an interview after the release that consumers aren't concerned about inflation. He said he was surprised by the drop in 12-month inflation expectations to 2.4% from 2.8% in April. That's the lowest level since 2010.

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