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NAFTA negotiations

| Posted by: Paul Donovan | Tags: Paul Donovan

  • US President Trump has said that the US should leave NAFTA if it cannot be renegotiated, and that the "gains" from a renegotiated NAFTA could pay for the big, beautiful wall with Mexico. Most economists would regard such "gains" as imaginary. This raises the question of whether an imaginary wall could be built, funded by imaginary gains.
  • US retail sales and consumer price inflation data are due. Full employment should support the retail sales data. There is evidence of growing pricing power from companies, but this will not necessarily translate into consumer price inflation given consumer prices contain a relatively high proportion of non-market prices.
  • News that South Korea may ban trading in cryptocurrencies caused prices to drop faster than you can say "tulip bulb." Korean citizens' enthusiasm for cryptocurrencies means that country is at greater economic risk when the bubble bursts.
  • The Euro area offers up final French consumer price inflation alongside Spanish consumer price inflation. The former leader of the UK Independence Party has suggested that there should perhaps be a second referendum on the EU. Whether this is motivated by a desire for national certainty or a desire for personal publicity is not clear.