Trade - should we trust the tweets of optimism?
- Trade talks between China and the US start in earnest with markets wanting to see tariffs (a tax on equities) either reduced or at least not increased. The US prosecution of a high profile Chinese company hangs over the discussions. The Trump Twitter Feed has praised taxes on US steel consumers, but there have also been tweets of optimism about a China deal.
- The US Federal Reserve is not expected to change policy. We do get a press conference (there will now be press conferences every meeting). Markets want to understand the pause in tightening. Yesterday's drop in consumer confidence is unlikely to worry the Fed much – that seems more political than economic.
- The interminably tedious EU-UK divorce continues. The UK government must renegotiate with the EU. The EU says it will not renegotiate. The UK parliament does not want a no-deal exit. There is no automatic delay mechanism, but there are votes in two weeks which might impose an automatic delay mechanism.
- French December consumer spending hints at "gilet jaune" protest impact. Did consumers go online to avoid rioters (and will that be captured in the data)? German inflation data should show consumer prices rising in line with the ECB target.