Time for trade (again)

Posted by: Paul Donovan

12 Nov 2019
  • The Economic Club of New York can be pretty wild – full of illicit experimentation with behavioral economics, etc. That will be put aside for US President Trump's remarks there tonight. The focus, of course, is on trade.
  • Whatever the tone of the remarks, the effect on markets is likely to be short term. We are just a tweet away from a policy change, and the next communication on trade could reverse market assumptions. There are also a couple of Fed speakers on the agenda.
  • The British pound strengthened on news that the Brexit Party will not put up candidates in Conservative-held seats. The Brexit party has never won a seat in the UK Parliament, but previously it was seen as potentially costing the Conservative Party seats under the British electoral system.
  • The German ZEW survey of economic experts is due out. As a survey of economists, it deserves more respect than other surveys, but it is still just a survey. The market focus this week is whether the German economy had two consecutive quarters of negative growth – a meaningless concept that does not matter to anyone living in the real world. UK labor market data is also due and should stay firm.

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