Saudi and the potential for shifting international flows
- The ongoing developments in Saudi Arabia have limited consequences for the international economy so far. The move in the oil price is noise around the current trend, and not significant enough to have meaningful international economic consequences.
- Media reports that the assets of the arrested may be seized and used to finance domestic investment is more significant. This would be an out of assets, into imports trade for Saudi. Assets would be sold, and the proceeds used to pay domestic wages (spent on imported consumer goods) or fund investment (imported capital goods).
- US President Trump has left Japan (nothing of note accomplished on trade) to move to South Korea. Trade is likely to be a focus here as well. Market are less likely to be interested in comments regarding North Korea, in spite of the probable media focus.
- UK BRC retail sales data was weak (although online spending increased market share). The BRC are blaming the consumer for daring to spend on domestically produced services (e.g. a day out) rather than on goods (possibly imported). Euro retail sales are scheduled for release.