A walk along the clifftop pathway

Posted by: Paul Donovan

11 Oct 2019
  • The British and Irish governments have announced a possible pathway to a possible deal on the divorce. Could the interminably tedious process become terminally tedious? Different talks take place today – but any deal still has to pass the UK Parliament. Any deal would give some certainty, helping investment in the UK. All that would be left is the uncertainty of global trade taxes.
  • US President Trump said talks with China on trade went "very well." A limited trade deal would be positive, as a tax increase would be avoided. However, it seems unlikely that companies will rush to invest. That would need a very high level of confidence that any deal will last.
  • US import price data is due. This does not include trade taxes (trade taxes are applied to US companies and consumers after the goods are imported), but it shows whether exporters to the US have been cutting prices to offset the taxes. So far, the signs are that they have not.
  • There are ECB and US Federal Reserve speakers due today. Both central banks are clearly divided on policy. The ECB divisions do not seem to make a difference to Draghi's policy. The Fed divisions do seem to matter.