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When things get worse

| Posted by: Paul Donovan | Tags: Paul Donovan

  • The Argentine peso and the Turkish lira have continued to weaken in foreign exchange markets. They are, however, weakening at a somewhat slower pace than has been the case recently. The markets are still not expressing confidence in policy solutions, however.
  • The US trade deficit is likely to increase – because most of US President Trump's policies are calculated to increase the deficit (tax cuts to higher income consumers who tend to buy imports will lead to more buying of imports). The Trump Twitter Feed has not commented on the report in advance, which reduces the chance of a "better number" – unless someone stole the report from the president's desk.
  • In the glittering wonder that is the Euro, we have the release of the composite PMI opinion poll of business sentiment. Let's pretend it isn’t happening and see if anyone notices.
  • There are a couple of central bank speakers. Praet of the ECB and Bullard of the Fed are both making comments. At the margin Bullard may be more significant with the whole "one or two rate hikes this year" debate, but Bullard is reliably on the dovish end of the Fed spectrum.