Removing uncertainty (sort of)

Posted by: Paul Donovan

17 Dec 2019
  • The NAFTA2 (USMCA) trade deal is back on. Mexico and the US agreed what was already agreed. The cycle of crisis, solution, crisis, solution continues. One might think the crises were manufactured purely so that politicians could show voters they can solve crises.
  • Congress is removing another area of uncertainty with bipartisan bills to stop a government shutdown. No politician wants a government shutdown so close to Christmas (or the US presidential election). The House votes on the legislation today.
  • UK Prime Minister Johnson is vowing to make the interminably tedious Brexit process terminable. Final exit by the end of 2020 will be put in law. Sterling fell in response. Is this really the end? No. The government can change laws if it wants. If the UK does leave on schedule, there will still have to be post-exit negotiations.
  • Eurozone trade may get some attention (it has been a focus of the Trump Twitter Feed). US industrial production data is due – but this remains a relatively small part of the US economy. Localisation may change things in the future, but for now the US does not make that much (except Treasury bonds. The US is good at making those).

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