Time to trade?

Posted by: Paul Donovan

16 Apr 2019
  • EU Trade Commissioner Malmstrom has urged a trade deal with the US by 1 November. The EU wants a trade deal that covers industrial goods only. The French objected as EU rules state that trade deals can only be done with countries that have signed up to the Paris climate accord. EU rules exist to be broken (the French are well aware of that).
  • US industrial and manufacturing production numbers are due. The US is a declining manufacturing power. Nonetheless, the US is around 15% of major economy manufacturing output, more than twice German production. The US is relatively biased to consumer rather than investment good production, which may support the figures.
  • UK labor market data should show ongoing strength. The UK Office of National Statistics published its new early warning data yesterday – based on observations, rather than opinion poll surveys. The data showed stable activity and little evidence of panicked stockpiling ahead of any of the EU-UK divorce dates.
  • A couple of Fed speakers are due – there does seem to be a widening range of views on the FOMC. Vice Chair Clarida stressed the failure of the labor share of the economy to rise in recent years; that may be about to change.

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