Shifts

Posted by: Paul Donovan

02 Dec 2019
  • The week gets off to a fairly slow start. There is manufacturing sentiment poll data from Europe. Several of the figures are "final," which are almost always the same as the "flash" figures. Sentiment has overreacted to the downside in recent months, and is now shifting back to reflect reality. Real world data has also tended to be revised up in Europe of late.
  • The US ISM manufacturing sentiment poll covers a sector of dwindling economic importance, but which still provides politicians with political ammunition. The US does make things that export well – but intellectual property and Treasury bonds are not manufacturing.
  • UK Prime Minister Johnson will spend the day trying to avoid being photographed alongside US President Trump (US President Trump is not considered an electoral asset in the UK). Opinion polls over the weekend have shown the Conservative Party's lead over the Labour Party narrowing, but sterling has not reacted meaningfully so far.
  • The German junior coalition partner, the SPD, has voted for a new leadership team. One of the victors, Esken, immediately declared the grand coalition with the CDU to be "rubbish." This less-than-wholehearted endorsement may lead markets to speculate about political shifts.