One point of interest and lots of uninteresting noise

Posted by: Paul Donovan

26 Feb 2019
  • North Korean President Kim arrived in Vietnam ahead of a dinner with US President Trump tomorrow. Markets are not interested. When tensions were high there was some slight interest, but this is just noise.
  • Consumer confidence is due from Germany, France and the US. Markets should not be too interested. The US has a political bias in consumer sentiment – the rise in confidence from late 2016 was due to Republican optimism (presumably political, not economic). The question is whether that Republican optimism now fades.
  • The UK population is wild with disinterest over the interminably tedious EU divorce protest. Media reports suggest that UK Prime Minister May will discuss delaying the exit and ruling out a no-deal exit with the Cabinet. The opposition Labour Party is backing a referendum (knowing this will not pass Parliament).
  • Markets do not seem to care about tweets on trade policy – the Trump Twitter Feed has diminishing marginal returns as a soft trade deal is priced in. Fed Chair Powell (a lawyer, not an economist) testifies to Congress. Any reminder that rates can go up would be of interest to markets. Former Fed Chair Yellen (an economist, not a lawyer) offered a fairly blunt criticism of US political leadership.

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