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Shutting down, shutting up

| Posted by: Paul Donovan | Tags: Paul Donovan

  • The US government is still shut down, with US President Trump setting off to Texas to start building (support not fences). The issue for investors remains the signal this sends about the future under a gridlocked Washington, although Fed Chair Powell warned that a prolonged shutdown would have negative economic consequences.
  • In the UK most people do not care if the government shuts down or not, if only they would shut up about Brexit. Today there is trade data, the monthly GDP report, and industrial and manufacturing production data. Japanese Prime Minister Abe urged a negotiated exit, in the interests of Japanese manufacturers.
  • Japan has admitted to under-reporting wage growth data in recent years. This matters because pensioners and others have received lower benefits (and thus have had less to spend). It may damage investor trust in Japanese data, assuming there was any investor trust in Japanese data. The general rule in economics is "don't trust the data", in any country.
  • US CPI may make it through the desert of the government shutdown today. Otherwise more Fed speakers will be adopting a metaphorical lotus position and offering Zen-like patience. Italy offers some production data.