More trade talk

Posted by: Paul Donovan

04 Feb 2019
  • US President Trump was sounding optimistic about the prospects of a trade deal with China. The optimism was conveyed by a TV interview, so perhaps it lacks the authority of a tweet on the subject, but is consistent with the tone from the administration since December. The delayed state of the union address will also be monitored by markets.
  • The interminably tedious UK-EU divorce process saw the Japanese car-maker Nissan decide not to make a vehicle in the UK. The divorce was cited as one reason (although the assumption that it will be easier to export from Japan to the EU than the UK to the EU seems a little extreme). The decision was rapidly politicised.
  • Eurozone producer price inflation is due. This is not without interest as pricing power could become an important focus over the course of 2019 (producer prices are a better indication of pricing power than consumer prices). The US is providing rather old data in the form of factory orders and durable goods orders (from November).
  • Venezuela continues to be a source of uncertainty. Market attention is mainly focused on the implications for the oil price, which to date seem to be rather limited.

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