The Traderszone Network

In the aftermath of the Brexit fiasco, the biggest fissure that emerged was not between the economies of the UK and Europe, nor between the stock markets of the UK and Europe, both of which have spiked on the back of another round of central bank liquidity promises, but between Angela Merkel, and the alcohol-afficionado who erroneously believes is the head of Europe, Jean-Claude Juncker.

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Part 2 of the Bank of Japan Tankan is out, this is the “Inflation Outlook of Enterprises”
Asking businesses for their outlook on the CPI
– One-year inflation forecast is now at +0.7% (from +0.8% in Q1)
This is the 4th consecutive quarterly downward revision in expectations from firms.

A legal challenge has been launched arguing the government would be violating parliamentary sovereignty if it activated Article 50 on its own
– The argument goes that doing so would render redundant rights established by the European Communities Act of 1972 …. in a nutshell, parliament gets to make this decision, not the prime minister
Says a lawyer from the firm representing the businesses: “The result of the referendum is not in doubt, but we need a process that follows UK law to enact it. Article 50 simply cannot be invoked without a full debate and vote in parliament.”

The Australian dollar got off to a rocky start on Monday on heightened political uncertainty at home while the sterling found a steadier footing.

Here’s a bit of a round up of weekend news from Europe
– Matteo Renzi, the Italian prime minister, says he is prepared to defy European union rules and pump public funds into the if it comes under severe systemic distress (EU rules are that creditors rather than taxpayers fund bank rescues)
An implication of Renzi’s move could be exclusion of Italy from ECB QE and a potential sovereign debt crisis

The US isn’t the only country to can crank up its sales of weapons around the world. As we have pointed out previously, Germany is also a relatively large exporter in the global arms trade.

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Back on Friday we got the Bank of Japan Tankan report for Q2
Today we get part 2 of the Tankan, the price expectations survey (company inflation outlook, officially the “Inflation Outlook of Enterprises”). Its unlikely to move forex rates much at all.