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Brexit Groundhog Day (version 3,216)

| Posted by: Paul Donovan | Tags: Paul Donovan

  • The interminably tedious process of separating the UK and the EU may have an exit date. The UK is suggesting that a last minute deal might occur on 21 November. The EU has not endorsed this, and so we go back to where we started. Sterling rallied to levels not seen for two whole weeks.
  • The Bank of England is supposed to make policy against the backdrop of this nonsense. The monetary policy committee is likely to do nothing (masterfully) today. Comments on policy in the wake of a hypothetical deal and of fiscal stimulus will be of interest.
  • China hinted at stimulus - the politburo is paying "great attention" to the economy and may be "pre-emptive" in policy. It probably amounts to a bit, but not a lot of support for the economy. China's leaders do want China to slow (just not too much at once).
  • The US offers productivity data (everything economists cannot explain bundled into one package). This is calculated using unreliable GDP data. Unit labor cost data is calculated using the productivity data. It is all a bit of a wild guess. Nonetheless, with firms complaining of rising labor costs, markets may use this for Fed policy guidance.