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Fake economic news day

| Posted by: Paul Donovan | Tags: Paul Donovan

  • It is fake economic news day. US advanced second-quarter GDP data will be published. The data will be wrong. We know it will be wrong because it is always wrong, and always much revised. Markets will not care. Traders like shiny, new things. This is shiny, new data. Markets will react, even though economists tell them the data will be revised many, many times.
  • French advanced second-quarter GDP data has already been published. It too will be subject to revision. Growth in France was hampered by the fact that French workers were inclined not to work – GDP measures what is produced, and people on strike do not produce much.
  • The incredibly tedious process of separating the EU from the UK continues. EU negotiator Barnier rejected the British government's proposed customs solution. This has probably increased risks of a more disorderly divorce; negotiations are reaching the limit of what the UK government will concede.
  • US President Trump is threatening "large sanctions" against Turkey. It is not clear what "large sanctions" are, but it is unlikely to be good news for the economy. The Turkish lira has been weak, with the failure of the central bank to raise rates not helping.