It's so funny how we don't talk anymore
- Those engaged in the talks about talks about setting up a German coalition have stopped talking to one another. Chancellor Merkel remains a caretaker chancellor and will meet with the German president to decide what to do next. It is a good thing that politicians do not matter that much, economically.
- German domestic political uncertainty is unlikely to seriously impact the economy in the near term. However, the uncertainty is likely to diminish German leadership with Europe (perhaps giving greater emphasis to French leadership). This may have a bearing on UK-EU EU-UK divorce proceedings.
- There is an infestation of ECB speakers today, including ECB President Draghi amongst the crowd. The remarks are probably not that significant. There is little uncertainty about the near-term policy direction, and it is too soon to expect intelligent comments on longer-term plans.
- In the US, negotiations over the NAFTA trade deal continue. US exporters have already been put at a relative disadvantage by the US withdrawal from TPP (as a preferential trade deal, the TPP will give preferential treatment to those in the partnership). A breakdown of NAFTA is not expected, but uncertainty is a risk for businesses.