Follow Paul Donovan

Drowning in debt

| Posted by: Paul Donovan | Tags: Paul Donovan

  • US Vice President Pence warned countries not to take Chinese loans and "drown in a sea of debt." (The most successful US export is US Treasury bonds, which are a different sense of the word "debt.") The APEC summit broke up without a communique, lowering expectations for a G20 China-US agreement on trade. The art of the deal is starting to look like a toddler's crayon drawing.
  • US Fed President Williams is due to speak. Williams represents a voice of economic reason on the Fed. The near-term outlook is unlikely to surprise – the Fed would be loco not to raise rates in December. But there is uncertainty about how best to tighten policy in 2019.
  • Japan's trade balance was more negative than expected. Exports and imports rose after earlier supply chain disruptions, but imports rose more strongly. The picture is consistent with broadly stable global trade.
  • The interminably tedious process of separating the UK from the EU continues. The governing Conservative Party does not yet have the votes to challenge the prime minister. The leader of the opposition does not know how to vote in the (unlikely) event of a second referendum. Overall, nothing certain of any substance has happened.