Political moves may not move markets
- US President Trump's plans to move the US embassy to Jerusalem seem likely to inflame Middle Eastern tensions. The decision does appear to have been diluted (it will take place over several years, and the US is not denying Palestinian claims to Jerusalem as a capital).
- This is an instance of political rather than market importance. While the news might conceivably encourage some Middle Eastern repatriation of US assets, conservative Middle Eastern investors have already been doing that. Middle Eastern sovereign wealth fund assets have been repatriated with the low oil price. This would not be a new trend.
- Media reports say that the UK foreign secretary has challenged the PM over possible solutions to the Northern Ireland questions. This is leading to rather dramatic media headlines. Ultimately, however, it is in everyone's interests to do a deal. Logic may not play much of a role in the EU, but self-interest does.
- The data calendar offers US unit labor cost and productivity data. The US has areas of very high productivity, but recent job growth has tended to be in low productivity areas. The unit labor cost data, as a reflection of inflation pressures, may be of note.