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Restoring "public trust and confidence"

| Posted by: Paul Donovan | Tags: Paul Donovan

  • US President Trump dismissed the head of the FBI. The dollar weakened a little in Asian trading. Ordinarily the dismissal would not matter to markets, but the move might be regarded as further evidence of presidential unpredictability (which markets dislike). It may impact relations with Congress, and relations with Russia; both have market relevance.
  • Chinese consumer prices were a little stronger than expected. Chinese producer prices were a little weaker than expected. Chinese consumer prices have no relevance outside of China. Chinese producer prices have limited relevance for Chinese export prices; Chinese export prices have limited relevance for foreign import prices; foreign import prices have limited relevance for foreign consumer prices.
  • US import and export prices are due and should show some consequences of dollar weakness. This should not affect non-commodity US import prices, but will raise US export prices in dollar terms.
  • ECB President Draghi is due to speak to the Dutch parliament. Markets are increasingly looking for a September announcement of an intention to taper quantitative policy. The Dutch parliament may be a receptive audience to any attempts to shift rhetoric in support of that view.