Don't worry. Be happy (ish)

Posted by: Paul Donovan

25 Mar 2019
  • The publication of notes on the Mueller investigation into US President Trump's Russian relations is not likely to be a major market event (the investigation itself was not a major market event). The failure to exonerate the president over obstruction of justice might lead to more investigations, tying up White House time; the policy impact from that is likely to be limited.
  • The UK-EU divorce continues, because of course it does. Parliament still looks unlikely to pass the government's withdrawal agreement. Today, there is a vote on whether to hold indicative votes.
  • Thailand's general election saw the pro-army party do better than predicted. The complicated process of forming a government could take some time.
  • Germany's ifo business sentiment opinion poll is due, after weakness in the PMI version last week. Since 2010, German manufacturing output has risen (month-on-month) almost 60% of the time the PMI fell.
  • On some measures, the US yield curve inverted on Friday (briefly). Markets worry this signals a recession – though the yield curve is not a predictor in other countries, and economic theory does not support the idea especially strongly. With global labor markets the strongest in four decades, a recession seems very unlikely this year.

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