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It's so funny, how we don't talk any more

| Posted by: Paul Donovan | Tags: Paul Donovan

  • US Trade Representative Lighthizer was supposed to meet with Japanese Economy Minister Motegi yesterday, but was too busy. "Busy doing what?" is the question. Busy making a list of foreign goods to tax, perhaps? The meeting is supposed to take place today, along with another meeting with EU Trade Commissioner Malmstrom.
  • The US Business Roundtable said almost two thirds of US chief executives were cutting back on investment or hiring as a result of Trump's trade taxes. This needs to be treated with caution. The data is just a survey. Moreover, people know that surveys like this have political influence, and they may answer questions to achieve their desired policy goals rather than to reflect reality.
  • ECB President Draghi noticed that inflation is not terribly low in the Eurozone – in fact it is "relatively vigorous". Draghi talked about core CPI yesterday. When headline inflation was lower, headline inflation mattered. Now core inflation is lower, core inflation matters. Nonetheless, "relatively vigorous" inflation is a challenge to negative interest rates in 2019.
  • There is noise around the EU-UK divorce. Ignore it, perhaps it will go away. German Chancellor Merkel is speaking, as are assorted ECB, Bank of England and Riksbank speakers.