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There are the known knowns, and then…

| Posted by: Paul Donovan | Tags: Paul Donovan

  • Bond markets continue to weaken as investors assess the known known of Trump's proposed fiscal stimulus and its attendant deficit and inflation consequences. The growth consequences of this remain supportive for the equity markets.
  • The known unknowns of Trump's policy are the next areas of focus – cabinet appointments and trade policy in particular. Markets are keen to seize on any sign of conventional behavior from Trump as a positive development, because conventional behavior is more predictable (and markets like predictable).
  • Final German consumer price inflation is due. Consumer price inflation can raise popular concerns in Germany – and the likely move over 2% in 2017 may be a feature of the election campaign. EU trade ministers meet on the TTIP trade negotiations, in a possibly futile gesture.
  • US preliminary University of Michigan consumer sentiment for November will be hard to read. Politics messes up economic survey evidence. The Conference Board measure showed that consumers whose profile was similar to Trump supporters were negative on sentiment when their candidate was behind in the polls.