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Relative trade barriers against the US agreed

| Posted by: Paul Donovan | Tags: Paul Donovan

  • Television pundits will be pontificating on purchasing manager sentiment opinion polls, because today is PMI day. The gap between this data and reality is growing ever wider. The tendency of this data to overreact to the real world is getting ever stronger. It does give television anchors something to talk about at Davos.
  • Powell has been confirmed by the US Senate as next Federal Reserve Chair, starting 3 February. Powell is not an economist, but a lawyer. The head of the German Reichsbank in the Weimar hyperinflation was not an economist, but a lawyer. It is a good thing correlation does not equal causation.
  • Eleven Asian nations have agreed to the TPP trade deal (the UK is apparently queuing up to join). The deal will be signed early March. This is a preferential trade deal, which means that non-participants (like the US) will find it relatively more difficult to trade with the eleven member countries.
  • The dollar's slide against the euro is getting some attention. The dollar is far from being undervalued (on some models is still overvalued). Exporters in the Euro area will complain, because exporters always complain, but employment, production and volume of exports are unlikely to be affected.