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Politics and the short term

| Posted by: Paul Donovan | Tags: Paul Donovan

  • Markets reacted negatively to US President Trump's comments about ending the NAFTA trade deal and shutting the US government. Subsequent more conciliatory remarks, read from a teleprompt, may reassure investors that those around the president do not necessarily share the same views.
  • Normally, politicians do not have much impact in the short term – do I have a job, and can I afford to buy what I want to buy are the critical questions. However, ending NAFTA would raise prices for lower income Americans, and a government shutdown would hit jobs and spending power.
  • The Jackson Hole summer camp for central bankers gets underway today, with Fed Chair Yellen's speech tomorrow the main focus. ECB President Draghi offered a philosophical defense of why ECB President Draghi is always right about policy, in remarks yesterday.
  • Spain and the UK offer revised GDP growth data today. Nominal growth in Spain is of some interest, as being more relevant to debt sustainability. The composition of UK growth will be looked to as a guide to where the EU exit may be causing some damage. There is some more US housing data due.