Sic Transit Gloria Globalization

Posted by: Paul Donovan

29 Oct 2019
  • The reversal of globalization has been accelerated by trade uncertainty. The OECD is reporting further significant declines in companies' international investment. This is logical in the face of trade uncertainty. Multinational companies are unlikely to invest in supply chains when the basis of global supply chains is being challenged.
  • UK Prime Minister Johnson lost another vote in Parliament yesterday. Markets are not surprised. It just meant it was a Monday. The plan to exit the EU this year has been scrapped, along with the commemorative coins to mark the occasion. The UK seems to be moving towards a December general election. Market focus will switch to opinion polls, although UK voters have been switching between parties like never before.
  • US House Speaker Pelosi has announced a Thursday vote on impeachment procedure. This makes the process more public. However, investors are only likely to care if the impeachment process is seen influencing the 2020 election results. Gridlock in Washington is already priced into markets.
  • Japanese inflation (for Tokyo) showed the first impact of the sales tax increase, but was generally muted. UK consumer credit, Italian producer price inflation and a US consumer sentiment opinion poll are on the release calendar.

Explore more CIO Daily Updates