Talking trade

Posted by: Paul Donovan

04 Nov 2019
  • US Commerce Secretary Ross was positive about a trade deal with China, and suggested that taxing US consumers of autos partially made in Europe may not be needed. It is worth noting that this was just the commerce secretary talking – the remarks do not carry the weight of a tweet on the Trump Twitter Feed.
  • US President Trump was sounding more upbeat on China, without focusing on EU trade. Because trade is the personal decision of the president (under commander-in-chief powers), the president's views are disproportionately important to the US approach.
  • Trade taxes and the uncertainty that trade taxes cause have resulted in a significant investment slowdown. More evidence about that is offered with US durable and capital goods data today. Friday's labor market data showed the consumer has good reason to support the economy, but investment remains below normal for now.
  • Assorted European sentiment data is due. This is final data, mostly, and is rarely revised much. It is a struggle to improve the accuracy of sentiment data. ECB President Lagarde - a lawyer not an economist – will be speaking in Berlin. Markets will likely focus on the tone of the remarks rather than policy detail.

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