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Will Trump be Trump?

| Posted by: Paul Donovan | Tags: Paul Donovan

  • US President Trump has announced sanctions against Chinese and Russian companies for their alleged dealings with North Korea. This sort of policy does not require congressional approval. The move is not necessarily a surprise, but may raise tensions with North Korea and to a lesser extent, China.
  • Trump also holds a rally in Arizona, which is expected to focus on the issue of immigration (also an area where presidential authority has little congressional oversight). Investors focusing on broader policy will want to see whether Chief of Staff Kelly has exerted any moderating influence.
  • ECB President Draghi speaks today – having already promised to be boring in terms of public comments. However, there has been some widening of the spread between Italian and German government bonds as expectations of the ending of quantitative policy accommodation coincide with Italian political noise.
  • Eurozone purchasing managers' business confidence indices are due. The dilemma for an economist is whether to waste time correcting the inevitably incorrect reporting of these measures. The data reflects not reality, but the reported perceptions of a group of individuals which have a poor correlation with economic reality.