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There are trade tensions. The IMF says so.

| Posted by: Paul Donovan | Tags: Paul Donovan

  • The IMF has published a series of forecasts on the world economy. These forecasts will be wrong (because economic forecasts are not supposed to be precise). Markets are unlikely to care, as the IMF is always late to the forecasting party, but it gives the media something to talk about.
  • The US secretary of state and the Chinese foreign minister have been exchanging unpleasantries in public. There would seem to be a shortage of beautiful pieces of chocolate cake in Sino-US relations at the moment. China has reportedly indicated that it will not offer trade concessions without a "stable political climate" in Washington.
  • The trade tensions are not new information for markets. However, the risk that US President Trump taxes all Chinese exports to the US would create a negative economic and market reaction. Meanwhile, the Germans are publishing trade numbers today – German trade having been a target on the Trump Twitter feed.
  • The Italian budget is likely to be in focus with the finance minister and the central bank testifying to the Italian parliament on the fiscal outlook. The disagreement between Italy and the EU over fiscal policy direction is showing little sign of being resolved any time soon.