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Shutting down 2018

| Posted by: Paul Donovan | Tags: Paul Donovan

  • The resignation of the US defence secretary is not normally a matter for markets. However, the resignation coincides with uncertainty over a near-term US government shutdown, which would be of limited economic impact. But that in turn raises concerns about a more meaningful US government shutdown next September. A September shutdown would really matter for markets.
  • Russian President Putin approves of the departure of the US defense secretary. Putin also approves of Brexit, it seems. The Irish prime minster has suggested that a border between Ireland and the UK could be avoided, even with a hard UK exit from the EU. That position might undermine attempts to win support for UK Prime Minister May's withdrawal agreement.
  • Japanese retail sales were weaker, and inflation was marginally lower than expected. There are downside risks to Japanese consumer price inflation in 2019, not because of market forces but because the government may lower mobile phone prices. When inflation is lower, non-market prices become more important.
  • This is the final call of 2018. Normal service resumes 7 January 2019. Have as prosperous a new year as circumstances allow, and to everyone who has tuned in over the course of this year – thank you for listening.