Striking home?

Posted by: Paul Donovan

05 Dec 2019
  • France is not working (today). A general strike is scheduled. Does this matter? The direct effect of strikes is usually short lived. There may be noise, as with the recent US General Motors strike. Technology means fewer people are affected by the disruption, as working from home is a thing. The political challenge to French President Macron is something markets may care about.
  • OPEC meets as Saudi Arabia says it is time to it stopped cutting production to offset other economies' overproduction. The oil price is not seen as a major economic issue in 2020 – other commodity prices may be more relevant – but it matters to specific countries.
  • The US is offering its trade balance. Billions of dollars have been wrenched from US companies and consumers in trade taxes, and yet Americans still buy things partially made overseas. This means Americans enjoy a higher standard of living than they would otherwise (financed by the export of US Treasuries).
  • US durable and capital goods numbers are vulnerable to the investment slowdown caused by trade uncertainty. The German factory orders data remained negative year-on-year, though not as negative as feared. Eurozone retail sales should show the European consumer is spending.

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