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New politics, same old economics

| Posted by: Paul Donovan | Tags: Paul Donovan

  • Anti-establishment politics may be staging something of a comeback. Japan's governing LDP saw a significant loss of seats on the Tokyo provincial elections. Prime Minister Abe's approval rating has also been falling recently, and these two events have raised speculation about yet more economic stimulus.
  • US President Trump has been demonstrating "new presidential" politics with tweets directed at the media. The question for investors is whether this damage's Trump's standing with Republican voters or with Republicans in Congress (either would impact the prospects for legislative success). 
  • Qatar has been given a further 48 hours to respond to demands from the Saudi Arabians and others, with Qatari officials being relatively strong in the language of opposition. The oil price has continued to rise in Asian trading (although Chinese economic data may have contributed).
  • Today is manufacturing sentiment data day. It would be nice if markets could declare independence from this data, but despite its proven track record of overreacting, that is unlikely. The data is high frequency, which gives the media something to talk about, and superficially detailed, which allows for many spurious correlations to be Tweeted.