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Never mind the substance. Look at the tweets

| Posted by: Paul Donovan | Tags: Paul Donovan

  • The Trump Twitter feed effectively declared victory in the phony trade war with China. China's vague pledge to increase agricultural imports is logical. China has to import water (as a water deprived nation). It chooses to import water packaged up into soybeans. Little of substance has changed, but that seems not to be the point. The Twitter Feed is the point.
  • Italy's proposed government did not get a great reaction from the government bond market. The government is created to be against things, and that includes being against fiscal discipline. Italian bond yields obligingly rose yesterday.
  • Spain and Portugal also saw rising yields. Their governments have done nothing – presumably this is a general fear about anti-austerity movements. It is worth noting that a number of European investors were on holiday yesterday. As local investors tend to understand politics better than international investors, this may have exaggerated risks.
  • The data calendar has been mugged by the Bank of England, with four speakers (including the governor) on the agenda. The bank failed to raise rates in May, after a weak first quarter GDP figure was reported. The problem is that no competent economist believes the data, so there is speculation about when tightening may occur.