Trade trends, protests, and politics
- Financial markets continue to be worried about trade tensions, and the threat of further US taxes. US consumers have largely ignored the tax increases so far because the early trade taxes have been relatively easy to evade. The strength of US labor markets offers support (low job creation may owe more to a lack of labor supply than a lack of demand).
- Chinese trade data showed weakness in exports. The US was not the main cause. Europe had a greater slowing of imports. Exports to Japan improved, suggesting a fourth quarter rebound after natural disasters hit the third quarter. Third quarter Japanese GDP was revised lower.
- Protests in France may weaken economic activity – French retailers estimate EUR 1bn of sales were lost over the weekend although some sales may be diverted online or to different times. French retail sales have been relatively strong until mow (Germany and Italy have been weaker).
- OPEC's promise to cut oil production has supported oil prices, but the price move is not enough to have major economic consequences yet. Political events in US (the departure of White House Chief of Staff Kelly, and the ongoing Russian affair) are unlikely to influence markets as they are unlikely to change policy outcomes.