Have you tried turning it off, and turning it on again?

Posted by: Paul Donovan

28 Mar 2019
  • In the interminably tedious UK-EU divorce, the following has happened. The UK prime minister will resign if the government deal succeeds, and will stay if it fails. The UK opposition leader backs a referendum if in opposition, but opposes a referendum if in government. Parliament rejects everything. Turning the process off and on again seems sensible (i.e. a long delay to the exit seems increasingly likely).
  • US January trade data yesterday showed a drop in imports from China. Hopes of a trade deal were rising in January. Why would US companies pay trade taxes in January if they could delay imports, and hope to pay no trade taxes in a few weeks. US-China trade talks continue today.
  • US fourth-quarter GDP is revised again today. Markets pay more attention to (worse quality) initial releases and less attention to (better quality) revised data, but the picture should still be of an economy operating around trend with inflation a little below 2%.
  • German and Spanish consumer price data is unlikely to attract too much attention. Eurozone business sentiment opinion polls are released. ECB President Draghi mused on the damage of negative interest rates yesterday, without suggesting an end to negative interest rates.

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