Now what?

Posted by: Paul Donovan

21 Jan 2019
  • In the interminably tedious process of separating the UK and the EU, the UK prime minister must present a new plan to parliament for what happens next. This is likely to look much like the old plan. Parliament can agree that it does not agree on any way forward. Markets are still inclined towards a positive view of the outcome.
  • The US government is still shut down. Markets are also shut down, for the Martin Luther King holiday. Markets will reopen tomorrow. It is unlikely the US government will reopen tomorrow. Democrats rejected US President Trump's compromise over the weekend.
  • China published GDP data for the fourth quarter. These numbers are not, generally, regarded by investors as having pinpoint precision and accuracy in assessing the economy. Investors still react although China's domestic demand is less relevant to the rest of the world than might be supposed.
  • German producer prices are due, and indicate pricing power in a European economy with strong labor markets. The two Bank of England speakers are likely to be drowned out by the cacophony of Brexit. Fed President Williams spoke at the end of last week but was so "on message" as to be completely uninteresting.

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