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Wall Street & The White House Agenda

@ The White House

In the morning, the President and the Vice President will receive the Presidential Daily Briefing in the Oval Office.

@ Wall Street

There was little time for Wall Street to react to President Obama's jobs proposals, as Eurozone fears dominated the close of the week. The announcement of the departure of Chief Economist Stark from the ECB underlined the unhappiness in Germany about the ECB's purchases of sovereign debt, something that was never envisaged when the ECB was created.

Unfortunately, the failure of politicians to come to grips with the sovereign debt problem has left ECB support as the only game in town for now. 

So the Eurozone crisis rolls on with no end in sight. The president's plan itself was a bolder-than-expected attempt to inject fiscal stimulus into an ailing economy, but implementation is another question.

We expect existing stimulus (the 2% payroll tax cut and emergency unemployment insurance benefits) to stay in place, but not much more than that.

Consumer and producer prices and industrial production for August will also be on the docket. Producer prices, held down by lower energy prices, should post just a small gain.  Consumer prices will get a small kick from higher (seasonally adjusted) gasoline prices; core inflation should again come in at 0.2%. Finally, production will be down on a drop in utility output and in light vehicle production.