UBS On-Air: Market Moves UBS On-Air: Paul Donovan Daily Audio 'Aprés nous, le déluge?'
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Sep 9, 2025 The looming resignation of the French Prime Minister highlights alarming political instability, reminiscent of Italy's tumultuous 1990s. With five prime ministers in under two years, questions arise about governance and debt management. The U.S. is bracing for a critical revision of the Employment Report, which may influence Federal Reserve policies. Meanwhile, a controversial economic survey points to polarization, yet surprisingly, consumer spending in the UK shows resilience against economic headwinds.
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French Political Turnover Is Striking
- France has had five prime ministers in under two years, signaling rapid political turnover.
- Paul Donovan suggests parallels with 1990s Italy but warns parallels must be complete to be meaningful.
Employment Momentum Trumps Levels For Fed
- The US benchmark revision of employment may reveal past reporting errors due to low survey response rates.
- Donovan emphasizes momentum in employment growth matters more for Fed policy than raw level revisions.
Focus On Recent Momentum, Not Single Revisions
- Treat recent employment revisions cautiously because real-time data increasingly rely on estimates.
- Monitor recent momentum rather than one-off level changes to anticipate Fed reactions.