The US president does not like higher oil prices
- US President Trump tweeted rather angrily about oil yesterday. The US president does not like higher oil prices. The authority of the US president over the oil market is such that oil prices rose marginally in European trading yesterday.
- A higher oil price transfers money from oil consumers to oil producers. OPEC spends its income in Europe rather than the US, so money flowing from the US to OPEC tends to end up in Europe. However, not much money flows from the US to OPEC in the glorious era of US fracking. The low taxation and frequent purchase of oil in the US means that US consumers do notice higher oil prices.
- Germany reported significantly stronger factory orders in May. There was not really a soft patch at the start of the year – this was an optical illusion. Underlying data has signalled trend or above-trend growth. Data like this proves economists right – which should surprise absolutely no one.
- The Bank of England governor, legions of ECB members, and the US Federal Reserve minutes all appear today. However, central bankers keep telling us precisely what they intend to do with policy in the future. It has rather ruined the element of surprise.