Prejudice, passion, and politics
- US President Trump has declared he is the "least racist person" following reports of remarks made last week. The situation has economic and political consequences that matter to investors. Economically, anything that shifts socially acceptable behaviour towards prejudice will undermine economic performance.
- Politically, investors may focus more on the US mid-term elections. US mid-term elections tend to rely on a party motivating its own supporters to vote, rather than converting floating or opposing supporters. Democrats may be more impassioned in the current climate. However, opinion polls often struggle to accurately capture this effect, adding uncertainty.
- There has been some opposition to the provisional German coalition deal over the weekend, with several members of the SPD suggesting that the deal does not offer enough concessions. The full party will have to vote on a detailed agreement if a grand coalition is to be formed.
- European trade data is due today. In a world of complex global supply chains, a mercantile approach to national data would normally be less relevant. However, recent tensions over NAFTA have, perhaps, increased the potential risks of being an obvious trade surplus area.