Questions that need answers
- OPEC has agreed to cut production. It has not agreed how much to cut production. "How much" is a moderately important question for investors. The core OPEC group meets today to talk numbers. Economically a higher oil price may pressure for a slightly stronger US dollar, but ease fiscal pressures on Gulf states.
- China has pledged to quickly implement policy changes on trade, in the areas where there is a consensus with the US. "What areas is there a consensus with the US" is a moderately important question for investors. The arrest of a Chinese technology executive in Canada, for extradition to the US, may raise tensions in the broader realm of trade negotiations.
- US trade data is due and is unlikely to show any reduction in the deficit. The details will be overlooked by markets, but excite economists searching for reactions to trade taxes. US productivity and unit labor cost numbers are relevant for the Fed. Yesterday's Beige Book noted that labor shortages were starting to impact economic activity.
- German factory orders numbers say nothing about the health of the economy because of the auto sector distortions. They may say something about how quickly the auto sector can sort itself out.