Reminding us what we already know

Posted by: Paul Donovan

08 Oct 2019
  • The World Bank and the BIS have been telling markets what they already know. The World Bank said there are downside risks to growth from trade tensions. The BIS said that central bank quantitative policy distorts markets. The BIS does remind investors that bond markets' economic signals have been undermined.
  • The US has placed eight Chinese technology companies on its "entity list". They now need to be licensed to access US technology exports. Ahead of Thursday's US-China trade talks, the timing of this may worry investors, as reducing the chances of even a partial trade deal.
  • US producer price inflation is due. This should include the effects of past US trade taxes. However, some of the damage is felt in squeezed profit margins. Supply chains have also diverted to avoid the US trade taxes. The results are likely to be more visible in PPI details rather than the headline.
  • Japanese consumers showed slightly stronger-than-expected spending. German industrial production for August is not expected to be good, in the wake of factory orders data. The UK has unit labor cost figures, which are important but are likely to be drowned out by the eternal tedium of the EU-UK divorce.

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