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Stormy times ahead?

| Posted by: Paul Donovan | Tags: Paul Donovan

Chinese President Xi's economic speech recycled the January Davos remarks. China was cast as the grown-up in the trade debate; committed to multilateralism, reducing tariffs, and protecting intellectual property. The speech does not allow the Trump Twitter Feed to report "mission accomplished". If the US cannot spin a win, trade tensions are likely to continue.

The FBI raided the office of US President Trump's lawyer. US President Trump is somewhat upset. Directly this matters little. Committed Trump supporters and committed Trump opponents are unlikely to change views. However, with no Sino-US trade talks scheduled, the president's reaction suggests the raid may prove a distraction from important policy decisions.

US producer price inflation is due (a good measure of company pricing power). Core producer prices have been rising, suggesting companies can pass on some costs to their customers. Labor costs are rising and there are the new costs (for some) of the Trump trade tax.

The ECB's Nouy and Nowotny are both scheduled to speak. There was a clear effort by the ECB to signal economic strength yesterday. The Eurozone economy is likely to come off its recent highs this year as trend growth reasserts itself, but that is not especially troubling.