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Politics and protectionism

| Posted by: Paul Donovan | Tags: Paul Donovan

  • The Chinese National People's Congress is expected to abolish presidential term limits, allowing President Xi to go on and on. In Germany (which has no Chancellorate term limits), Chancellor Merkel is to go on and on. Merkel's continuation in office was achieved with just below 240,000 votes. Markets are not likely to react.
  • Italy's general election has produced political uncertainty. Political uncertainty is not unheard of in Italy. Exit polls (which have a large margin of error) suggest a rise in support for anti-establishment parties. The market favored response will be a grand coalition. First investors must wait for the actual results, then investors must wait for the lengthy coalition negotiations.
  • The Trump Twitter feed signals no exemptions from the new tax on steel and aluminum. Ultimately the tax is paid by US consumers, but a more comprehensive tax means a bigger burden. Visibility is important. The tax on solar panels was not especially visible. US consumers do not buy solar panels very often. A tax on aluminum beer cans could be more visible. US consumers buy beer more often.
  • There is no data of importance today. Purchasing mangers' sentiment opinion polls are released in Europe and the US.