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National economics and economic nationalism

| Posted by: Paul Donovan | Tags: Paul Donovan

  • China's economy grew 6.9% in the second quarter, because of course it did. The Chinese government wants growth of around 6.7%, and markets see no reason to question data released by the Chinese government. The data fits the story of general global growth, but China is not a driver for that growth. 
  • It is "Made in America" week. US President Trump says so. Of course, economic nationalism hurts lower income groups and lowers trend growth over time, by diverting resources to areas where there is no comparative advantage. Healthcare will be the other focus this week as the Senate struggles to pass the Trumpcare reform.
  • UK-EU talks (or EU-UK talks) resume today. The focus is the rights of citizens. This topic is not directly relevant to markets (though may matter personally to some market participants) but does serve as a signal. An early agreement here may revive hopes of mature, rational discussions.
  • Inflation data in the Eurozone is due out, in the form of consumer price numbers. As with recent US data, in a low inflation world statistical weirdness can have a very visible impact on the headline number. The US Empire State sentiment opinion poll is also due.